by Ed East, Global CEO and co-founder of Billion Dollar Boy
On 1st February, YouTube announced updates to its Partner Program including a new revenue sharing policy for creators. The update means creators will earn a 45% share of the revenue from ads viewed between videos in the Shorts Feed, replacing its predecessor – the $100 million creator fund.
In essence, each month the total revenue from ads in the Shorts Feed is accumulated and used to reward both the content creators and to cover the cost of music licensing. If a creator uploads a Short, all of the revenue associated with its views goes into the Creator Pool.
Of the total amount in the Creator Pool, YouTube will then either split 45% of it amongst all eilgible Creators, based on respective views. Or, the revenue associated with views of Shorts content featuring music will be split between the Creator Pool and music partners based on the number of tracks used.
What’s the industry buzz about?
There’s been a real buzz about the new model. We’re increasingly receiving enquiries from agencies and brands about it, as more and more creators begin exploring and even prioritising YouTube and its Shorts format.
That’s because the earning potential for creators from YouTube’s new revenue sharing model looks set to eclipse that of competitors, with YouTube Shorts content consistently generating good viewing figures – up to 1.5 billion views per month. It’s reminiscent of TikTok’s approach, where it’s seemingly easier to go viral. That will massively appeal to creators, especially with the potential to earn a slice of the 45% share of ad revenue generated.
YouTube is also lowering the eligibility threshold to earn from its Partner Program, making it easier for creators to monetise their content – both long and short form. Creators with over 1,000 subscribers, and 10 million Shorts views over the preceding 90 days will be able to earn from Shorts ad revenue.
It feels that YouTube is really putting its money where its mouth is when it comes to creator content, and creators should and will feel encouraged by that vote of confidence.
How could it disrupt the market?
Although it remains to be seen for certain whether payouts to creators from YouTube’s new revenue sharing model will exceed payouts from equivalent models at competitor platforms such as TikTok Pulse, the early signs are positive. It’s certainly a more sustainable approach than YouTube’s predecessor – Creator Funds – which often placed a cap on how much creators can earn.
YouTube’s new Partner Program is also more sustainable than TikTok Pulse because it better incentivises creators to post content on the platform. With an unlimited total pot of revenue available, it’s likely to encourage more Shorts content creation because as the number of views on Shorts grows, so will the payouts. The amount you earn is also performance-based, incentivising creators to invest more time and focus into their YouTube Shorts content to increase their share of the revenue.
Whereas, TikTok Pulse is only available to creators producing “the top 4%” of content across different categories. As a result, the number of creators benefiting from Pulse will be far fewer and, therefore, creators are less incentivised overall to post content to the platform for the ad revenue potential.
I remain bullish on TikTok. It’s where we recommend our brand partners to increasingly reach new audiences through highly engaging content. It remains one of the most popular platforms and the number of social buyers on the platform is growing – that makes TikTok a hugely valuable asset to brands.
That said, TikTok is coming under increasing pressure, in particular with a potential nationwide ban in the US leaving some creators and brands jittery about future investment in the platform. And now YouTube is launching a more competitive revenue sharing model to attract more creator content.
It’ll be interesting to see how the other platforms react. But it already seems likely that TikTok will need to open out its Pulse program and increase accessibility to be competitive with YouTube. Meanwhile, don’t be surprised to see Meta launch a similar model if YouTube’s Partner Progam updates prove to be successful.
History shows us that eventually people follow the money, and it seems with this new revenue sharing model landing that the money can be found on YouTube – for now.