YouTube wants to lure creators away from TikTok with cash, but it won’t say how much

YouTube wants to lure creators away from TikTok with cash, but it won’t say how much thumbnail

In 2007, YouTube made a decision that created a career out of what was previously just a hobby: the company announced it would give over half of the revenue it earned running ads on videos to creators themselves. Fifteen years later, that creator cut–55%–supports the nearly 400,000 people in the US working 40-hour weeks as YouTubers.

Now, YouTube is trying to pull off a similar revolution in how people are paid for making short-form videos–which, despite their wild popularity, have never earned their creators any share of the platform’s lucrative ad revenue. On September 20, the company announced it will for the first time share ad revenue with creators of YouTube Shorts, the under-60-second videos the company launched in 2020 to compete with TikTok.

It’s a big ploy to pull even more creators away from that rival platform; on TikTok, creators make less than a nickel per thousand views, on average, through a monetization scheme that has frustrated creators. YouTube’s promise is that, starting in 2023, it will divide Shorts ad revenue into two separate pools: one to pay video creators and one to pay record labels to use their music, because so much of short video is built on their copyrighted earworms. People who make Shorts will get 45% of that creator pool.

After the announcement, creators were excited by this new way to convert views into income. Media outlets, emphasizing the 45% figure, discussed pressure for TikTok to respond.

But one crucial question remains unanswered: creators will get 45% of … what exactly? As longtime YouTuber Hank Green pointed out in a Twitter thread, YouTube has been unclear about what percentage of the ad revenue from Shorts it will use to form these pools. We don’t know how much people could earn under this new system, despite all the hype surrounding it.

The video giant declined repeated requests by MIT Technology Review to clarify this.

When asked what percent of Shorts ad revenue will be in this creator pool, a YouTube spokesperson did not address the question. The spokesperson did not respond to my follow-up question. He said that he didn’t have any additional information beyond what was here. This was referring to a blog YouTube posted announcing the new plan.

In short, it’s difficult to assess how transformative YouTube is offering and how appealing it will be to TikTokkers. To be certain, the company’s move is an improvement over what has been offered to creators and editors of Shorts–and what is currently available to TikTokkers. The two platforms have used the exact same payment model in recent years: creator funds. These funds are separate from ad revenues and are static pots of money that the platform provides to people who create engaging content. However, as a platform grows, the amount of money doesn’t always keep up with it. Even though more people are watching and more creators are seeking a piece of the pie, this amount is not always constant. This means that creators who help TikTok grow actually make less as the platform prospers. Representatives of TikTok have not responded to MIT Technology Review’s request for comment. )

Earlier this year, for instance, Green revealed he went from earning 5 cents per thousand views in 2020 on TikTok to earning 2.5 cents per thousand in 2022, despite growing his following. All creator earnings could decrease as the platform grows in popularity.

TikTok says it started its creator fund to help people “turn their passion into a livelihood.” But diminishing returns from these funds make that impossible. Short-form creators are now able to look for brand deals rather than relying on small payouts from platforms. These payouts could be tied to the actual revenue that short videos generate, which could lead to steady income for those who have developed an audience.

A YouTube spokesperson stated in an email that the company is “moving from a fixed fund” and “doubling down on revenue sharing model because it works.”

The promise that creators will get a little less than half the unknown amount from YouTube is all that’s left for them.

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