YouTube to give Shorts creators 45% of ad sales

YouTube disclosed a new way for creators to make money on short-form videos, as it faces escalating competition from TikTok.

The Google-owned video streaming service announced that it would introduce advertising on its video feature Shorts and give video creators 45% of the revenue. That compares with its standard distribution of 55% for videos outside of Shorts and TikTok’s $1 billion fund for paying creators.

The internet’s dominant video sharing site has struggled to compete with TikTok, the app that got its start hosting dance and lip-sync videos and has subsequently burgeoned to 1 billion monthly users.

YouTube responded in late 2020 with YouTube Shorts, minute-long videos that attract more than 1.5 billion monthly viewers.

In April 2022, YouTube created a $100 million fund to entice creators to make bite-sized videos in its bid to hang onto talent. Youtube’s new revenue-sharing plan, first reported by the New York Times, is meant to be a bigger and more sustainable lure than the fund and something TikTok’s yet to match.

YouTube is sharing a lesser proportion of sales with YouTube Shorts creators to offset its significant investment in developing the feature, Vice President Tara Walpert Levy said.

Google generated $14.2 billion in YouTube ad sales during the first half of this year, up 9% from the same period in 2021.