By | September 16, 2022
YouTube wants to provide direct monetization for shorts, a major shift in the battle for short-form content

Could this be a killer blow to TikTok and its short video leadership?

It may sound like an extreme bet, but YouTube, via YouTube Shorts, is upping its pitch for short-form creative talent, with The New York Times reports that YouTube will soon add a new direct monetization option for Shorts, which would provide a clearer path for short-form content creators to monetize their clips alone.

According to NEW:

“YouTube will bring ads to Shorts, according to meeting and two people who know the situation. The company plans to pay creators 45 percent of ad dollars, according to one of the people. YouTube creators have traditionally received 55 percent of their money from the ads that play before and during their videos.”

According to the leaked internal audio, YouTube will also lower the barrier to entry YouTube Partner Programallowing more creators to monetize YouTube ads.

Currently you have to reach A total of 4,000 public watch hours on your channel in the previous 12 months to qualify for ads on your YouTube content, while you also need over 1,000 subscribers to pass the YPP cutoff.

These requirements likely don’t sit well with Shorts, where total watch time will generally be much lower, while lowering the number of subscribers would also open the door for more early-stage creators to build their presence in Shorts instead.

Combined, that could make YouTube Shorts a much more appealing prospect for short-form video creators. And when you also consider that the content of Shorts is now watched by 1.5 billion YouTube users per monthand has seen strong growth over the past year, the case for building on YouTube and monetizing your content would clearly be strengthened by this proposed expansion.

YouTube then also offers what in practice would be graded monetization. It’s hard to monetize short-form content, but YouTube pays billions of dollars to creators every year through its regular video upload partner program, where pre- and mid-roll ads can be inserted into longer clips.

It provides a direct link between the content and the related ad revenue, and if YouTube can attract more creators with initial revenue sharing through Shorts, it could see more of them also build their traditional YouTube channels and become big earners by translating their Shorts fame to an expanded presence on YouTube.

But how would YouTube do it? How can you attach specific ads to specific Shorts clips – because the clips themselves are generally only seconds long, so you can’t really ask people to sit through a 30-second pre-roll to watch a 15-second Shorts clip.

Right?

I suspect this has something to do with it:

Examples of YouTube ads

In recent weeks, a growing number of YouTube users have done just that caused concern about clusters of ads like this, where up to 10 non-skippable ads can be attached to a single video.

YouTube has answered to some of these complaints via Twitter, explaining that these “bumper” ads are only 6 seconds long, max – so while it may seem like a lot of individual ads, the actual playing time of these ad clusters is not significant.

But what if YouTube added more of these ads in preparation for the upcoming Shorts shift? What if people are seeing more of these clusters of “bumper” ads because YouTube has been working to build up its inventory of very short campaigns, so it can then attach single 5-second ads to specific Shorts in its app?

Perhaps that solves the direct monetization dilemma, as super short ads, linked to a specific video or creator, can actually then see direct revenue allocated to the individual account as well.

That seems to be where YouTube is headed – which would be a valuable addition to the Shorts ecosystem, providing direct revenue potential for Shorts users.

But again, if that’s the path YouTube takes, and it shows some promise, it will also open the door for TikTok and Meta (via Reels) to add the same.

If so, it might not be a differentiator for too long, but it’s still true that creators can make a lot more money on YouTube than they can on other apps.

As mentioned, YouTube took in $28.8 billion in ad revenue in 2021, with about half of that then being redirected to creators via the YPP revenue sharing program. TikTok, with its Creator Fund and other brand partnership options, doesn’t come close to this potential, while Meta, which can offer advanced monetization on both Instagram and Facebook via longer videos and other offerings, also doesn’t come close to touching this level of revenue potential for creators.

Providing alternative revenue streams, such as brand sponsorship via creator marketplace tools, offers some added value. But on YouTube, creators can get paid just for creating content. No individual brand offers or endorsements required – right now, YouTube is clearly the best option for video creators looking to monetize specifically for their creative talent.

Advertisements in Shorts would complement this, while helping guide the top stars to more lucrative career opportunities.

It may not be the death of TikTok per se, but history shows us that people will eventually follow the money.

Vine’s stars left for more lucrative opportunities (many will become millionaires via YouTube), while top-name game streamers regularly move platforms for exclusive content offerings, despite establishing large followings within an app.

Those shifts don’t always pan out. Popular streamer Ninja, for example, moved from Twitch to Microsoft-owned Mixer in 2019, in a deal worth up to 30 million dollarsbut in the end, Ninja couldn’t bring his fans over to Microsoft’s gaming platform, because different reasons.

Examples like this are probably why platforms are hesitant to overpay on exclusive contracts, and instead work to build self-sustaining monetization ecosystems from scratch, to attract more creators.

But again, any innovation can be copied, which can make it difficult to truly differentiate, other than offering increased revenue potential in other ways.

YouTube is leading on this front, and it will be interesting to see how direct monetization for Shorts adds to that appeal.


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