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Humans and technology

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

The platform announced it’ll share revenue with makers of short-form videos. It wouldn’t tell us what portion of ad revenue is up for grabs.

September 26, 2022
viewport of a YouTube short with a young content creator. dollar signs are emanating from the background toward the viewer.
Stephanie Arnett/MITTR | Envato, Unsplash

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 appeared excited about this new way to turn 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. So, despite the fanfare of its rollout, we don’t yet know how much people have the potential to earn under this new system. 

The video giant has declined repeated requests from MIT Technology Review to clarify that.

When asked what percent of Shorts ad revenue will be in this creator pool, a YouTube spokesperson did not address the question. When pressed in a follow-up email, the spokesperson replied, “we don’t have further detail to share beyond what’s here,” referring to a blog post by YouTube announcing the new plan, which also does not disclose that information.

In short, it’s hard to gauge how transformative YouTube’s offer is—and how enticing it will be for TikTokkers.

To be sure, the company’s move will almost certainly still be an improvement over what has long been offered to creators of Shorts—and what is currently offered to TikTokkers. In recent years, the two platforms have used the same payment model: creator funds, which are detached from ad revenue and are static vats of money provided by the platform to be distributed among people making especially engaging content. But as a platform grows, that amount doesn’t necessarily keep pace—even as more eyes are watching, and more new creators are claiming a slice of the pie. That means that as a platform like TikTok prospers, the creators fueling that rise actually earn less. (Representatives of TikTok did not respond to a request to comment from MIT Technology Review.)

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. As the platform becomes more popular, all creator earnings could dwindle even further.

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. Instead, short-form creators have learned to hunt for brand deals instead of relying on meager payouts from platforms. Tying these payouts to the actual revenue short videos generate could mean steadier money for people who’ve managed to develop an audience this way.

Trying to draw a contrast, a YouTube spokesperson wrote in an email that the company is “moving away from a fixed fund and doubling down on the revenue sharing model because we’ve seen that it works, and it’s the one way to ensure that creators continue to benefit as the platform and community grows.”

But for now, all creators have from YouTube is the promise that they’ll get a little less than half of something unknown.

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