The largest opening the secret in short form video has nothing to do with the algorithm. The secret is that you can’t get rich on TikTok, because even the most viral creators make an insignificant portion of income from the platform itself.
TikTok is still hugely dominant over the imitative short-form video feeds that competing social media giants have developed in recent years, like Instagram Reels and Snapchat Spotlight. However, according to the report from The New York TimesNew YouTube Shorts are prepare to announce an ad revenue sharing model that could revolutionize short-form video and help TikTok make money – literally.
Revenue Share is over, Creator Fund is over
YouTube is said to be the first platform where creators can make a living by posting interesting content on the internet. In 2007, just three years after YouTube was founded, the platform announced its Partner Program, offering creators 55% of the revenue earned from ads served before or during videos. their.
But TikTok pays creators through its Creator Fund, a $200 million fund announced in the summer of 2020. At the time, TikTok said it planned to expand that fund to 1 million dollar in the United States over the next three years, and twice as much internationally.
It sounds like a lot of money, but by comparison, YouTube paid creators more than 30 billion dollars advertising revenue for the past three years.
One big reason TikTok and other short-form video apps haven’t announced a similar revenue-sharing program is because it’s hard to figure out how to split ad revenue equitably across the generated short-video feed. algorithmically will be more difficult. You can’t embed an ad in the middle of a video – imagine you’re watching a 30 second video with an 8 second ad in the middle – but if you put an ad between two videos, who gets the revenue share? Did the creator have the video appear directly before or after the video? Or, the creator whose video you’ve previously watched in the feed also deserves a cut, because their content encourages you to keep scrolling?
Jim Louderback, former CEO of VidCon, said in a chat with TechCrunch this summer: “We’re still in the early days of how we make money from these things, but I’m one person. optimistic and I think the industry will figure that out. . “They’re going to have to, because otherwise the creators are going where the money is.”
But YouTube may have figured it out. The company is expected to announce a Partner Program-like ad revenue sharing model on Tuesday at its Made on YouTube event. If the rumors are true, YouTube Shorts creators will receive 45% of ad revenue – a smaller cut than what they do on YouTube videos, but a significant upgrade over the amount they pay. meager payments from the Creators Fund. As Louderback said, creators run after money.
The problem with making money on TikTok
You can’t get rich on TikTok? What about Charli D’Amelio, who started posting dance videos in her bedroom in high school and then performed 17.5 million dollars in 2021? But that money doesn’t come from TikTok itself. Instead, she and her sister Dixie D’Amelio have made their fortunes through big brand deals, a reality show and risky investment. Even Youtuber MrBeast (Jimmy Donaldson) who made more money than any other creator by doing 54 million dollars last year, can’t seem to make good money on TikTok.
That’s because TikTok’s Creator Fund model simply doesn’t work. The Creator Fund is a pool of static money that is divided each day among users of the TikTok creator program based on the number of views they receive – but since the pool is not growing, that means when TikTok is bigger, creators make less money.
Longtime internet creator Hank Green said in a Creator Fund video that he initially made about 5 cents per thousand views, but the number of creators on the show has outstripped the growth of the show itself. So over time, his bounty drops to about 2 cents per thousand views. At that rate, a very impressive 10 million views per month would set you back $200, which isn’t exactly the amount to pay rent.
Of course, TikTok can be life-changing for creators who build audiences on the platform. Charli and Dixie D’Amelio may not make millions from the TikTok app itself, but they wouldn’t have had the opportunity to work on their own fashion line and reality show without their TikTok star.
The father of these TikTok stars, Marc D’Amelio is the CEO of the family businesses, like Brand D’Amelio.
“I read about how TikTok is working on a ad sharing model and that would be great for the creative economy,” Marc D’Amelio told TechCrunch via email. “TikTok has built a great platform and changed the lives of tens of thousands of creators by providing them with a platform to share their creativity with the world. It would be an amazing next step if so many of these creators could turn their creativity into full-time jobs. “
D’Amelio is referring to TikTok Pulse, a program announced in May that allows brands to pay to place their ads next to the top 4% of videos on the platform. For the first time, this allows creators to earn 50% of the ad revenue generated through that particular program. Currently, the program is only open to creators with over 100,000 followers, who also make the platform’s top 4% of videos. But YouTube Shorts’ potential ad revenue share program could further democratize access to this type of income.
“I think TikTok is great in terms of awareness. Whether you’re a brand or a creator, it’s a great place for people to get to know you,” Louderback said. “But when it comes to conversions, whether you’re a brand that wants to sell products or a creator who wants to sell Patreon [subscription] or merchandise, YouTube could in many ways be a better platform. “
As creators build their audiences on TikTok, the platform won’t last long.
“I would say I don’t rely on it anymore,” Tyler Gaca (ghosthoney) told TechCrunch in June. “When [the Creator Fund] first launched and first founded, I was in that phase where I made seven videos a week and it helped cover some of my bills. “
But when payments from the Creative Fund became less reliable, Gaca turned to podcasting and other writing projects for a more sustainable income.
“Creator Funds don’t really help much anymore,” he said. “But that’s because I’m not active, I think.”
Some creators can successfully leverage their TikTok following to sell products or join them on other lucrative platforms, but that’s no guarantee.
“With my funk band Scary Pockets, we ramped up our presence on TikTok pretty quickly and gained 100,000 followers on TikTok within three to six months,” said Patreon CEO and co-founder Jack Conte , who also plays in several bands, told TechCrunch. “We were pumped about it until we realized, wait, this really doesn’t mean much to us. Like, we can’t send these people to Spotify. It’s hard to get them to buy merchandise or join members.”
Conte attributed this to the fact that TikTok’s algorithm is too confusing.
“Sometimes you post a video and it gets a million views, and sometimes you post a video and it gets 100 views,” Conte told TechCrunch. “That’s the nature of that algorithmically sorted ecosystem. It essentially reduces a creator’s ability to build connections with their followers. “
Given these challenges, running a creator’s business can feel unsustainable – but given the amount of value creators create for these platforms, that shouldn’t be the case.
“It seems to me that every content creator I talk to shares the same fear that one day everything will fall under your feet,” Gaca tells TechCrunch. “So I found myself in the first place [on TikTok] definitely overworked myself, like doing one-minute comedy skits with costume changes and setting changes, seven days a week. It was great to build an audience, but then I had a big crash and got burned.”
Image credits: TechCrunch
This is YouTube Shorts’ best chance to surpass TikTok
Over the past few years, the efforts of the major social platforms to keep up with TikTok’s explosive popularity have been amusing.
To attract creators to its platform, Instagram even offers to pay big bonus to post viral Stories – in November one creator told TechCrunch they were offered $8,500 for 9.28 million Instagram Stories views. But users still don’t seem to want a TikTok-like experience from Instagram. Instagram even had to roll back some TikTok-like changes into your app after users (including Kylie Jenner and Kim Kardashian) expressed such a deep distaste for them. Instagram head Adam Mosseri said that Instagram is slow behind YouTube and TikTok in metrics important to creator satisfaction, a recent report from The Information shows.
Although Instagram’s parent company, Meta, has poured a lot of resources into building Stories, internal documents leaked to the Wall Street Journal revealed that Instagram users only spend a total of 17.6 million hours a day with the product. That’s less than ten percent of the time TikTok users spend on the platform, accumulating 197.8 million hours per day.
Meanwhile, over 1.5 billion logged in users watch YouTube Shorts every month, but the company hasn’t shared engagement metrics for these users. TikTok reaches 1 billion monthly active users about a year ago.
If it can sustain this ad revenue share model, YouTube Shorts now has a chance to prove itself as the best way for short-form video creators to make a living. Better yet, we know that social apps like to copy each other. If YouTube Shorts’ new monetization structure can get other platforms to find their own revenue sharing models as soon as possible, we’re in for another boom in the creator economy. create.
