After announcing the expansion of its TikTok-like 'Shorts' option to all US users last week, YouTube has today announced the next phase in its expanding focus on short-form content, with a new 'Shorts Fund' that will see YouTube pay out $100 million to top Shorts creators to provide additional support, and motivation, for their efforts.
As explained by YouTube:
"Since Shorts is a new way to watch and create on YouTube, we’ve been taking a fresh look at what it means to monetize and reward creators for their content. We’re introducing the YouTube Shorts Fund, a $100M fund distributed over the course of 2021-2022. Anyone is eligible to participate in the fund simply by creating unique Shorts that delight the YouTube community."
That could be a big boost for Shorts content, while also providing additional motivation for YouTube stars to post to Shorts, instead of testing the waters on TikTok instead.
In variance to YouTube's regular monetization process, via its Partner Program, YouTube will offer this new Shorts funding to the Shorts clips that see "the most engagement and views" each month - so long as users "create original content for Shorts and adhere to our Community Guidelines".
Which is more akin to Snapchat's 'Spotlight' funding initiative, which sees it paying out $1 million per day to the best Spotlight clips.
That's already seen Snapchat pay out over $90 million through the Spotlight initiative in just under 6 months, but with over 125 million Snapchatters now using Spotlight, it may well be worth that initial expense. It could be harder to justify those costs over the longer term, but the idea would be that this initial funding will get Snap through to the next stage, when it can monetize Spotlight effectively, then it can use the funding from ads to build a more sustainable short video ecosystem.
Which is also how YouTube is approaching Shorts:
"The Shorts Fund is the first step in our journey to build a monetization model for Shorts on YouTube. This is a top priority for us, and will take us some time to get it right. [...] We’ll expand our Shorts player across more surfaces on YouTube to help people find new creators, artists and Shorts to enjoy. We will also begin to test and iterate on ads to better understand their performance."
So while direct payments for top Shorts content is a big initial outlay, eventually, YouTube will look to build an ads infrastructure on top of the current model, in order to feed into that monetization stream. So these initial payments, like Snapchat, are just to build interest - and likely, to put a stop on users migrating over to TikTok, while they establish more solid frameworks around the program.
Which is why every app is working to quell TikTok's growth wherever they can, using their reach and resonance to build alternative tools that offer their own TikTok-like experiences, which will, ideally, keep their users posting to their apps, and maintain that connection, as TikTok works to establish its own monetization tools.
Which is where YouTube can really win out. While TikTok has the attention of the short-video cohort, YouTube makes creators a lot more money, and can offer far greater revenue potential for those looking to maximize their efforts.
If TikTok can't offer the same, TikTok's top stars will eventually realize that they can make millions on YouTube instead - and if YouTube can also placate them with Shorts, which is also now monetizable to a degree, that could be a key step in YouTube eventually gathering up more TikTok stars, which may eventually pose some real problems for the short-form video originator.
Already, we've seen TikTok's biggest star, Charli D'Amelio enter a new content agreement with Snap. It won't take long for others to note the bigger opportunities on alternative apps as well.
Will that eventually become a real problem for TikTok?
It's impossible to say at this stage, but it does put a lot more pressure on TikTok to ramp up its own monetization efforts. Which, as noted, it is working on - but as YouTube continues to expand Shorts, which is up to 6.5 billion daily views already, and add more monetization options like this, the need for TikTok to provide real, significant income for its top stars will only become more pressing.
In addition to the new Shorts Fund, YouTube has also announced some new features that are coming to Shorts as it continues to expand the option.
First off, YouTube is adding a new option that will enable users to remix audio from other YouTube clips:
"Earlier this year, we previewed a new feature that will allow you to remix audio from videos across YouTube - which includes billions of videos - and we’re excited to share this experience is starting to roll out to everyone that has access to our Shorts creation tools soon. This means you can give your own creative spin on the content you love to watch on YouTube and help find it a new audience."
Remixing has become a key component of the TikTok experience, so it makes sense for YouTube to add similar, in an effort to maximize Shorts take-up.
In addition to this, YouTube's also adding auto-captions for Shorts, longer Shorts clips (up to 60 seconds in length), the capacity to add clips from your Camera Roll, and new, basic filters, like color correction, within the Shorts camera.
It may not seem like a major competitor for TikTok as yet, but YouTube is the clear online video leader, with huge audience reach capacity, and much more established monetization tools.
If YouTube can convince a few of the bigger TikTok stars to come across, and post to Shorts exclusively instead, that could turn the tide quickly - and direct payments, through this new program, could, at the least, prompt more of YouTube's own stars to stay home, as opposed to branching out to TikTok instead.