Alphabet Inc-owned YouTube has unveiled a new way for creators to make money on short-form video, as it faces intensifying competition from Chinese-owned rival TikTok, Reuters has reported.
The Google-owner's new streaming service announced Tuesday will 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 newswire noted
YouTube, the internet's dominant video site, has struggled to compete with TikTok, the app that got its start hosting lip-sync and dance videos and has subsequently burgeoned to 1 billion monthly users.
YouTube responded in late 2020 with 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 the bite-sized Shorts videos in its bid to hang onto talent. The 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 has yet to match, Reuters noted.
YouTube is sharing a smaller proportion of sales with Shorts creators to offset its significant investment in developing the feature, Tara Walpert Levy vice president, Americas for the firm said.
Alphabet generated $14.2 billion in YouTube advertising sales during the first half of this year, up 9% from the same period in 2021, though the most recent quarterly advertising sales reflected the slowest growth since disclosure of that data began three years ago.
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