YouTube bringing changes to shorts in order to compete with TikTok

YouTube is sharing a smaller proportion of sales with Shorts creators

YouTube has come up with a new way for creators to make money on its short-form video format called shorts. The move is in line to tackle the heavy competition the video platform faces from apps like TikTok. The Google-owned video app announced that it would introduce advertising on its video feature Shorts and provide video creators with 45% of the revenue. This is comparable with its standard distribution of 55% for videos outside of Shorts, and TikTok's $1 billion fund for paying creators.

The 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 introduced Shorts in late 2020. These were minute-long videos that attract more than 1.5 billion monthly viewers. In April, YouTube created a $100 million fund to attract creators to make bite-sized 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 much larger and more sustainable method to lure than the fund and something TikTok has yet to match. YouTube is sharing a smaller proportion of sales with Shorts creators to offset its significant investment in developing the feature, Vice President Tara Walpert Levy said.