YouTube Does A TikTok: Shorts Creators Will Now Get Share Of Ad Revenue

Zinger Key Points
  • YouTube to put ads on shorts and share revenue with creators
  • The revenue sharing plan will come into effect in early 2023
  • Ad-generated revenue will also cover the cost of licensing music for shorts, says YouTube

Alphabet Inc’s GOOGL GOOG video streaming platform YouTube announced “new ways” for its Shorts creators to make money on Tuesday.

What Happened: The Sundar Pichai-led company said in a blog post that beginning early 2023, Shorts-focused creators can apply to its YouTube Partner Program (YPP) as long as they meet a threshold of 1,000 subscribers and 10 million Shorts views over 90 days.

Elaborating on how it plans to fund creators, YouTube Vice President of Creator Products Amjad Hanif said in the blog that in early 2023, current and future YPP creators would be eligible for ads-generated revenue sharing.

“From the overall amount allocated to creators, they will keep 45% of the revenue, distributed based on their share of total Shorts views. The revenue share remains the same, no matter if they use music or not.”

The ads-generated revenue will also “help cover costs” of licensing music, according to Hanif.

See Also: How To Buy Alphabet Inc (GOOGL) Shares

Why It Matters: “Instead of a fixed fund, we're doubling down on the revenue sharing model that has supercharged the creator economy and enabled creators to benefit from the platform's success,” said Hanif. Previously, YouTube announced a $100 million Shorts Fund.

Shorts, launched in Sept. 2020, is YouTube’s answer to TikTok, operated by China’s ByteDance. Shorts creators have the ability to add music from a library of songs.

TikTok, the leader in the short-form video segment, saw its daily active users rise 13% year-over-year to nearly 48 million in 2021. Pichai revealed earlier that Shorts had 5 trillion all-time views and more than 15 billion views each day.

Price Action: On Tuesday, Alphabet Class A and Class shares closed 2% lower at $101.14 and $101.83, respectively, in the regular session and rose 0.1% and 0.2% each in the after-hours trading, according to Benzinga Pro data.

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