YouTube's next move in the race to beat TikTok

YouTube giving more creators more opportunities to make money in an apparent attempt to compete TikTok.

The Google-owned company announced at Tuesday’s Made on YouTube event that it is lowering the bar for creators to make money on the platform by introducing revenue sharing to Shorts, its TikTok-like video-sharing service where videos can to be up to 60 seconds. YouTube said it plans to give Shorts creators 45% of the revenue generated by the ads that play between videos starting in early 2023.

“Short video is obviously a really popular format. So it feels like every platform is moving in the same direction,” says Mark Bergen, author of Like, Comment, Subscribe: Inside YouTube’s Chaotic Rise to Global Domination.

YouTube it is reported first announced these changes internally during a September 15 staff meeting, with VP of product management and creator products Amjad Hanif citing the development as the “biggest expansion” YouTube’s monetization program has undergone in several years. Tech industry experts say the move appears to indicate YouTube is seeking to retain creator loyalty as China-owned TikTok’s popularity grows rapidly.

For its part, YouTube says the option to monetize short-form content has always been part of its long-term plan. “The announcements we’ve made today are the first of their kind and establish a new model for the due and critical compensation of creators of short, mobile-first videos,” said a YouTube spokesperson. “This is a huge area of ​​investment for us and we look forward to seeing how it helps the community thrive and grow.”

Read more: Why So Many YouTube and TikTok Stars Want to Sell You a Shirt (and Maybe a Burger)

The battle against TikTok

With over two billion monthly active users, YouTube is the top performing online streaming platform. But TikTok’s popularity is becoming increasingly clear. TikTok’s average monthly active users increased by 234% in the second quarter of 2022 compared to the same time period in 2019, while YouTube’s only grew by 29%, according to data from the measurement platform. Sensor Tower applications.

“What TikTok has done is kind of take YouTube’s recommendation system and Facebook’s feed features, which have been criticized for prioritizing engagement and addiction, and put them together into one really compelling service,” says Bergen.

TikTok has also taken off seriously among Gen Z users. A A Pew Research study published in August found that while YouTube is still the most popular social media platform among American teenagers, TikTok is steadily gaining ground. The survey found that 95% of US teens use YouTube and 19% are on the platform “almost constantly”, compared to 67% who use TikTok and 16% who use it “almost constantly”.

Instagram and Snapchat are next in the rankings, with 62% and 59% of teens, respectively, saying they use the platforms.

“TikTok is the platform of choice for young people,” he says Margaret O’Mara, a technology industry historian. “And that’s the growth market that all these platforms are chasing.”

YouTube’s strategy mirrors recent updates Facebook and Instagram parent company Meta has made to its platforms to compete with TikTok. Since introducing Reels in 2020, Instagram has touted the short-form video feature as an answer to TikTok. But the company has experienced a number of failures in service growth. The Wall Street Journal reported earlier this month, according to Meta’s internal research, Instagram users cumulatively spend less than a tenth of the time per day on Reels that TikTok users spend on TikTok.

According to Journal, part of the reason for this is that Instagram is struggling to recruit people to create content. This is the exact problem YouTube seems to be trying to hedge its bets against.

Lowering the bar for creators to make money on the platform is a significant move that reflects how the social media influencer ecosystem has grown and changed, O’Mara says.

“Even ten years ago, this whole world was different, and YouTube could kind of act like an old Hollywood movie studio and have a stable of stars that it nurtured and showcased,” she says. “Now the new creators that seem to be getting a lot of attention and very quickly are on TikTok. YouTube wants to appeal to this group of creators.

What YouTube’s announcement means for creators

Previously, YouTube creators only earned money if they had at least 1,000 subscribers and audiences watched at least 4,000 hours of their videos. Now creators with 1000 subscribers and 10 million views of Shorts in 90 days can also earn from their content.

At Tuesday’s event, YouTube VP of Americas Tara Wolpert Levy said the company wants YouTube to be a “one-stop shop” for creators. “Our belief is that you should be able to make a living in any format,” she said.

TikTok introduced competition to YouTube in a way it had never felt before, says Bergen. “It forced YouTube to pay more attention and provide resources to creators in a way that it hadn’t done before,” he says.

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Write to Megan McCluskey c [email protected].

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