YouTube to give Shorts creators 45% of ad sales to challenge TikTok

YouTube unveiled a new way for Shorts creators to make money off their short-form on Tuesday in a bid to fend off competition from TikTok. 

The Google-owned video streaming service said that it would be introducing advertising to YouTube Shorts and creators would received 45% of the revenue. For video content, YouTube pays creators 55% of the ad sales. Meanwhile, TikTok has a $1 billion fund meant specifically for creators. 

For a long time, YouTube has dominated the video streaming space, something that its older competitors like Vimeo never came close to doing. However, since TikTok hit the scene in 2018 following its merger with musical.ly, another Chinese social media app, it has grown quickly and increased in popularity. It now has 1 billion monthly users. 

In response, YouTube released it’s own version of TikTok, called Shorts, which are minute-long videos. Subsequently, Shorts has attracted more than 1.5 billion monthly viewers.

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Earlier this year in April, YouTube created a $100 million fund to attract creators to its new platform and to stop its existing creators from jumping ship. The New York Times reported that the new revenue-sharing plan was an attempt by YouTube to act as a more sustainable lure than the fund for creators, and something that TikTok has yet to come up with. 

However, the reason that Shorts creators will receive 45% of the ad sales compared to the 55% that video creators receive is to offset the “significant investment in developing the feature” the Vice President of YouTube, Tara Walpert Levy told Reuters. 

In the first half of this year, YouTube has generated $14.2 billion in YouTube ad sales, up by 9% for the same time period last year.

However, the second quarter ad sales report showed the slowest growth since YouTube began disclosing this data three years ago.