As TikTok’s market share grew, YouTube introduced a new mechanism for producers to monetize short-form videos. The streaming service, which Google owns, revealed on Tuesday that it would start running ads on its video feature Shorts and give video producers 45% of the money. This contrasts with TikTok’s $1 billion fund for paying producers and its usual payout of 55% for videos other than Shorts. Kris Collins, a former hairstylist who now runs the YouTube channel Kallmekris, praised YouTube for allowing revenue-sharing for Shorts.

“Other platforms are focused on getting people their 15 seconds of fame, which is great,” she said. “But YouTube is taking a different approach. They’re helping creators make stuff in multiple formats.”. The most popular video platform on the internet has had difficulty competing with TikTok, an app that began by offering dance and lip-sync videos before ballooning to 1 billion monthly users. In response, YouTube released Shorts in late 2020, minute-long videos that get more than 1.5 billion monthly users.

In an effort to retain talent, YouTube established a $100 million fund in April to encourage creators to produce short films. The New York Times broke the news of the new revenue-sharing arrangement, which is intended to be a greater and more enduring enticement than the fund and something TikTok hasn’t yet been able to match. In order to make up for the huge investment it made in creating the service, YouTube is splitting the proceeds of sales with Shorts producers less.

In the first half of this year, Google made $14.2 billion from YouTube ad sales, an increase of 9% over the corresponding time in 2021. However, since the data’s publication started three years ago, the most recent quarterly ad sales showed the slowest rise. Financial analysts have stated that TikTok is a factor in addition to global economic considerations.