Launching in 2017, TikTok completely changed the social media landscape — especially among Gen Z users, who enjoy it so much that the app has even replaced Google as their search engine of choice.
YouTube has been fighting back as best it can with its own short-form video app, titled Shorts, since its launch in 2020.) Just this week, YouTube announced a major new part of its strategy to oust TikTok. Previously, the threshold for creators to join Short’s “Affiliate” program – which pays 45% of ad revenue from videos viewed by users – was 1,000 subscribers and 4,000 hours of content watched in the last year. YouTube has adjusted these standards to allow more shorts-specific creators to participate.
Now, any shorts creator who has accumulated 10 million views in the last 90 days is eligible to participate in the program. There are also a few additional incentives. The Shorts system appears to give YouTube creators more freedom to add music to their videos without affecting their compensation.
Though TikTok has certainly proven its worth as a repository for the latest dance crazes hitting the nation, not to mention the recipe for homemade NyQuil chicken (don’t actually make that!), a thing the company has NOT yet mastered , is a real income split with its creators. TikTok currently pays out through a “Creator Fund,” but this approach has proven unpredictable in terms of payout timing and unfair in allocating the money.
Although TikTok has expanded the money pool available to developers from $200 million to almost $1 billion since the fund’s inception in 2020, it has also increased the number of developers in the pool. As the number of creators registered for the program increases, each creator will receive less money. In a video released in early 2022, online personality Hank Green revealed that he initially made about $0.05 per thousand TikTok views, but that dropped, he said, to about $0.02 per thousand views, when the program was expanded. That equates to about 10 million TikTok views, earning around $200 a month, hardly the kind of reliable income that will inspire a creator to quit their regular job.
That’s not entirely TikTok’s fault. The app’s fast-paced, chaotic feed poses many existential challenges for a traditional advertising and revenue-sharing company. It’s impossible to embed an ad in the middle of a fast-paced TikTok, and placing ads between videos begs the question of which creator is making the revenue: the ones that came before the commercial breaks, or the ones immediately after?
Big TikTok creators often try to move their audience away from the app to generate income from endorsement deals or side hustles to stay afloat.
TikTok unveiled a new revenue-sharing program called TikTok Pulse in May that will likely get ahead of those challenges. So far, it’s only available to the top 4% of creators – individuals with more than 100,000 followers. Pulse program members earn 50% of the advertising revenue generated by their videos, but this has yet to trickle down to the vast majority of the app’s users.
The new move gives YouTube additional appeal to creators, especially those with existing audiences. It can also prove to be a valuable incentive for current YouTubers who haven’t experimented with shorts yet to play around with the system and potentially develop a new revenue stream for themselves without having to start over on a new platform. Only time will tell if the YouTube program will halt the growth of TikTok, which continues to dominate the public’s attention and imagination. –Lon Harris
Nominate LA’s top startups for our 2022 Startup Awards!
Help us shine a spotlight on Southern California’s best startups and founders – submit a nomination for the 2022 dot.LA Startup Awards! The winners in the six categories will be announced at our annual summit on October 21st. Sign up for the summit here. Browse the categories and nominate a startup or individual before the submission closes on Friday, October 7th. Questions? Email [email protected]
