YouTube’s Looking to Provide Direct Monetization for Shorts, a Big Shift in the Short-Form Content Battle

Could this be a killer blow for TikTok and its short-form video leadership?

That might sound like an extreme take, but YouTube, via YouTube Shorts, is ramping up its pitch for top short-form creative talent, with The New York Times reporting that YouTube will soon add a new, direct monetization option for Shorts, which would provide a clearer pathway for short-form content creators to make money purely for their clips.

As per NYT:

“YouTube will bring ads to Shorts, according to meeting and two people familiar with the situation. The company plans to pay creators 45 percent of the ad money, according to one of the people. YouTube creators have traditionally received 55 percent of the money from the ads that play before and during their videos.”

According to the leaked internal audio, YouTube will also lower the barrier for entry to the YouTube Partner Program, allowing more creators to make money from YouTube ads.

Currently, you need to reach 4,000 total public watch hours on your channel in the preceding 12 months to qualify for ads in your YouTube content, while you also need over 1,000 subscribers to make the YPP cut.

These requirements likely don’t gel with Shorts, where the total watch time will generally be much lower, while lowering the subscriber count would also open the door for more early-stage creators to build their presence in Shorts instead.

In combination, that could make YouTube Shorts a much more appealing prospect for short-form video creators. And when you also consider that Shorts content is now viewed by 1.5 billion YouTube users per month, and has seen strong growth over the past year, the case for building on YouTube, and making money from your content, would clearly be strengthened by this proposed expansion.

YouTube also then offers what would effectively be graduated monetization. Monetizing short-form content is hard, but YouTube pays out billions of dollars to creators each year through its Partner Program for regular video uploads, where pre and mid-roll ads can be inserted into longer clips.

That provides a direct connection between the content and the related ad revenue, and if YouTube can lure more creators with initial revenue share via Shorts, that could then see more of them also build their traditional YouTube channels as well, and become big earners by translating their Shorts fame into an expanded YouTube presence.

But how would YouTube do it? How can you attach specific ads to specific Shorts clips – because the clips themselves are only, in general, seconds long, so you can’t really ask people to sit through a 30-second pre-roll to watch a 15-second Shorts clip.

Right?

I suspect this has something to do with it:

In recent weeks, a growing number of YouTube users have raised concerns about clusters of ads like this, where up to 10 unskippable ads may be attached to a single video.

YouTube has responded to some of these complaints via Twitter, explaining that these ‘bumper’ ads are only 6-seconds long, max – so while it may seem like a lot of individual ads, the actual play time of these ad clusters is not significant.

But what if YouTube has been adding more of these ads in preparation for this coming Shorts shift? What if people are seeing more of these clusters of ‘bumper’ ads because YouTube has been working to build its inventory of very short promos, so that it can then attach single, 5-second ads to specific Shorts in its app?

Maybe, that solves the direct monetization dilemma, because super short ads, connected to a specific video or creator, can actually then see direct revenue also allocated to that individual account.

That seems to be where YouTube is headed – which would be a valuable addition to the Shorts ecosystem, providing direct monetization potential for Shorts users.

But then again, if that is the route YouTube takes, and it shows any promise, that’ll also open up the door for TikTok and Meta (via Reels) to add the same.

In which case, it may not be a differentiator for long, but it does still stand that creators can make a lot more money on YouTube than they can in other apps.

As noted, YouTube brought in $28.8 billion in advertising income in 2021, with around half of that then being re-routed onto creators via the YPP revenue share program. TikTok, with its Creator Fund and other brand partnership options, comes nowhere close to this potential, while Meta, which is able to offer advanced monetization on both Instagram and Facebook via longer videos and other offerings, also still isn’t close to touching this level of revenue potential for creators.

Providing alternate revenue pathway options, like brand sponsorships via ‘creator marketplace’ tools, does offer some supplemental value. But on YouTube, creators can get paid purely for creating content. No individual brand deals or endorsements required – right now, YouTube is clearly the best option for video creators looking to make money specifically for their creative talent.

Ads in Shorts would compliment this, while also helping to guide the top stars into more lucrative career opportunities.

It may not be the death of TikTok, as such, but history shows us that, eventually, people will follow the money.

Vine’s stars left for more lucrative opportunities (many going on to become millionaires via YouTube), while top name gaming streamers regularly move platforms for exclusive content deals, despite having established, large followings in any one app.

Those shifts don’t always pan out. Popular streamer Ninja, for example, moved from Twitch to Microsoft-owned Mixer in 2019, in a deal worth up to $30 million, but in the end, Ninja wasn’t able to bring his fans across to the Microsoft gaming platform, for various reasons.

Instances like this are likely why platforms are hesitant to pay out too much on exclusive contracts, and are instead working to build self-sustainable monetization ecosystems from the ground up, in order to lure more creators in.

But again, each innovation can be copied, which may make it difficult to truly differentiate, other than offering expanded monetization potential in other ways.

YouTube leads on this front, and it’ll be interesting to see how direct Shorts monetization adds to that appeal.