Last year on February 1, 2023, YouTube announced the monetization of YouTube Shorts with a new ad revenue-sharing program. Shorts has been called YouTube’s answer to short-form content platforms like TikTok and Instagram Reels, and monetizing Shorts was a huge step forward, so much was made of the impact this would have on the creator economy as a whole.
Many wondered whether monetizing YouTube Shorts would be able to lure content creators away from other short-form video platforms. In this article, we’ll take a look back at YouTube Shorts’ first year of monetization, whether it’s really worth it for creators, and how creators can successfully use Shorts to grow their audience and revenue.
What we’ve learned since YouTube Shorts monetized last year
The biggest takeaway after a year of YouTube Shorts’ new revenue-sharing is that while you can definitely make money with YouTube Shorts, it pales in comparison to what you’d make doing long-form content on regular YouTube – and it’s not even close.
But with that being said, we’d say that, overall, the monetization of YouTube Shorts has been a success because many of the issues when it comes to monetizing short-form content aren’t specific to YouTube Shorts — it applies to short-form content in general – and it ultimately depends on the creator, their goals, and how they utilize short-form content.
Ads for YouTube Shorts pay a fraction of long-form content
This year, one of Viral Nation Talent’s creators earned as much as 21x more per view from their regular, long-form content than they did on YouTube Shorts.
To get a better understanding of the costs and revenue when it comes to Shorts vs. long-form videos, let’s explore two of the most important metrics on YouTube – cost per mille (CPM) and revenue per mille (RPM).
Cost per mille (CPM): The metric for brands and advertisers
CPM stands for “cost per mille” and it’s an advertiser and brand-centric metric that represents the cost for every 1000 impressions an ad gets. If a content creator has a high CPM, it means that brands and advertisers are willing to pay a premium to have their ads placed on that particular creator’s content.
Creators can look at niches with high CPMs to get an idea of the topics brands are willing to spend more on and draw inspiration from that. For example, “making money online” has one of the higher CPM rates – it averages $11.50 – so it has potential for creators looking for topics and ideas.
Now, let’s work with some real data!
Take one of Viral Nation’s very own creators as an example. We will keep them anonymous, but they’re what’s considered a ‘mega influencer’ on YouTube with millions of subscribers, and they’ve been relatively well-known on the platform for years.
This mega influencer, whose content typically ranges from 3-5 minutes in duration*, has the following CPMs:
- CPM for Shorts: $0.10
- CPM for long-form video: $1.57
*Note that content typically under 8 minutes is not eligible for mid-roll ads (midroll ads increase RPM because multiple ads are watched per view, and eligibility starts at 8 minutes).
This means that if a brand placed ads on a Short, and that ad got 3 million impressions, it would cost $300. But if a long-form video got the same number of impressions, it would cost $4,710.
One last thing to note about CPM is that it shows earnings before revenue sharing (i.e. it’s before YouTube takes its cut).
Revenue per mille (RPM): The creator-centric metric
RPM is a creator-centric metric that shows how much revenue the creator generated for every 1000 views, which means RPM has a direct impact on a creator’s earnings.
RPM is one of the single most important metrics to creators because it shows them what they’re actually making at the end of the day. On average, we’ve seen RPM for Shorts range from 5 cents to 15 cents, but let’s take a look at our creator’s RPM for a real-life example:
- RPM for Shorts: $0.06
- RPM for long-form video: $1.27
Comparing the RPMs, we can see our creator makes 21x more from their regular YouTube content than they do from Shorts. So if they had a Short hit 3 million views, the creator makes $180. But if 3 million people saw one of their long-form videos, the creator gets $3,810.
Remember when we said CPM shows earnings before revenue sharing? Well, RPM shows the revenue after revenue sharing, and this is the reason why you’ll often see CPM being higher than RPM.
But another important note is that YouTube’s fees are different for long-form video and Shorts as well. For long-form video, YouTube takes a 45% revenue share whereas for Shorts, YouTube takes a 55% share. This difference is largely because the monetization model for short-form content is more complex.
YouTube is still the place to be for that sweet ad money
But regardless of the ad payouts for Shorts, YouTube is still the place to be for creators looking to monetize their work because YouTube has one major advantage – it uses Google Adsense to display ads (since Google owns YouTube) while the other platforms do not, which is partly why YouTube is still the most reliable monetization platform for creators.
In fact, both TikTok and Instagram Reels offer very little in terms of native ad support (if at all), so for creators counting on ad revenue as their primary source of income, then YouTube is still king, whether you’re making Shorts or not.
Short-form content is harder to monetize
Some would go as far as arguing that the revenue from short-form content isn’t enough to really be worth it, at least if you’re a creator who wants to rely on ad revenue. Because there’s no question that monetizing short-form content is more complex than long-form video. But this issue isn’t unique to Shorts, either, because we’ve seen it on TikTok and Instagram, too.
Serving ads on short-form videos often relies on users binging multiple videos (or infinitely scrolling) during a single session so ads can be served in between the videos, whereas regular YouTube videos will often have an ad at the beginning and end of the video, in addition to mid-roll ads if the video is long enough to support them (typically 8 min or longer).
But this monetization model for Shorts breaks down if you’re like most people and constantly DM your friends with memes and funny posts. For some people, sending memes is even a love language but it’s a huge challenge when monetizing short-form content because when you send that Short or TikTok as a DM, it appears in isolation.
This means your friend was not scrolling on the platform, which means advertisers literally have nowhere to place their ads because nobody will sit through an ad that’s probably longer than the video itself.
Mid-roll ads are another advantage long-form content has over Shorts
For YouTube videos that are at least 8 minutes long, mid-roll ads are another option to further monetize your content as the name implies, mid-rolls can be served throughout the video and the longer the video is, the more mid-rolls you can place in it.
At the same time, creators should be careful that they don’t overdo the mid-roll ads to the point where it annoys their viewers and drives them away. We’ve even seen cases where a YouTuber was doing an ad break to promote their video’s sponsor, only to have the sponsored message get interrupted by a mid-roll ad! For creators doing manual mid-roll placements, they should keep in mind the viewing experience and try to avoid situations like that if they can.
If in doubt, YouTube considers a variety of factors to determine if it’s appropriate to show a mid-roll ad where the creator has manually inserted one. YouTube even offers an automated version that will take care of the mid-rolls for you if you don’t want to deal with it at all. But as a general rule, creators should aim to space out their mid-roll ads to once every 3-5 minutes.
It’s easier than ever to monetize on YouTube
In addition to monetizing Shorts last year, YouTube also lowered the eligibility requirements for its YouTube Partnership Program (YPP) back in June to make it easier for smaller creators to make ad revenue on the platform.
Instead of needing 1,000 subscribers in order to qualify, creators with 500 subs are now eligible and YouTube also loosened its requirements for minimum watch time hours and views.
5 best ways to use YouTube Shorts post-monetization
Even if the money isn’t there yet for Shorts, it’s not something that creators should write off. While many creators were already employing the following tactics prior to monetization, now that Shorts are monetized, the use case for Shorts has never been better.
1. Build and grow your audience with Shorts
There’s something about short-form content that just immediately captures our attention. It also gets some of the highest engagement, whether it’s likes, shares, or comments. This makes Shorts an effective way to build or grow an audience because the content is so inherently shareable. It can even introduce creators to completely new audiences, especially the younger TikTok generation.
Plus, watching a 60-second Short is a much easier ask than a 20-minute video essay, and if someone liked that Short enough to check out more of the creator’s content, then there’s a potential subscriber who never would’ve interacted with that creator otherwise.
2. Use Shorts as a hook for your long-form content
Creators can also use Shorts as intro ads to encourage people to watch their long-form content.
Typically, the Short gives a quick intro and rundown of the topic or idea before ending on a cliffhanger that leaves the audience wanting more.
A great example of this one-two punch comes from creator Caleb Simpson. He made a Short about a guy who lives in New York but pays zero rent. You’re probably wondering how that’s possible – and it’s because he lives in an ambulance. The premise alone immediately brings a flood of questions to mind, and Caleb even asks a few of them in the Short before encouraging you to watch the full video on his YouTube channel for all the answers.
When using a Short as an ad, it’s imperative to structure it so that viewers are motivated to watch it until the very end, and Caleb’s Short is a great example of how to do that. And then in Caleb’s long-form video below, which is almost 10 minutes long, you get a tour of the ambulance and learn a bit more about the guy who lives in it rent-free.
YouTube has also recognized the potential of using Shorts as hooks for longer content as it’s made it even easier to do with its new “Related Links” feature, which allows you to link Shorts to regular YouTube videos (such as the one you’re promoting) but it doesn’t stop there. You can also link to live streams, podcasts, products, and even other Shorts.
Time and time again, we’ve seen creators successfully leverage Shorts to fuel the growth of their long-form content because Shorts helped them build audience trust and primed them for their longer content. And now that Shorts is monetized, this strategy gives creators a secondary monetization opportunity as they make ad money not only off of the Short but also the long-form video it links to.
3. Repurpose content from other platforms
For creators already used to making short-form content for Reels and TikTok, it’s relatively easy to recut those videos and turn them into Shorts. And now that Shorts is monetized, it’s another potential income stream for creators.
Creators can also leverage insights from their TikTok and Instagram analytics in their content strategy for YouTube. The data from TikTok data can be especially helpful because TikTok has a huge range of niches and sub-niches that don’t exist on YouTube, so TikTok can be a great way for creators to gather data on audience preferences to find new content opportunities on YouTube.
While it’s relatively easy to translate a Short into a TikTok or Instagram Reel and vice versa, creators should be aware of the different runtimes for the platforms as well. Generally, TikToks range from 15 seconds to 3 minutes, but some TikToks can be as long as 10 minutes! Meanwhile, Shorts has a hard cut-off of 60 seconds, while Instagram Reels can be up to 90 seconds.
Creators should be aware of potential copyright issues when repurposing content for other platforms, but we’ll get deeper into this a bit later in this article.
4. Rapidly test content ideas and pick the best ones
Shorts are an excellent way to test new content ideas for viability before putting in hours (or sometimes months) of work on a long-form video. Creating a Short on a potential topic and then analyzing the results can remove some of the guesswork for creators when it comes to making long-form video content.
Using Shorts in this way gives creators a greater sense of certainty that the hours they invest into a long-form video will be worth it.
5. Use Shorts as a stepping stone to more money via long-form content
Shorts is a great way for short-form creators who are primarily on TikTok to branch out to YouTube and begin making some real ad money through long-form content.
Generally, creators on TikTok and Instagram make the majority of their money not through platform revenue, but through brand deals and merchandise instead, and it’s not even close. Typically, short-form creators on those platforms make up to 90% of their income from brand deals, with platform revenue making only 10% of their earnings.
Meanwhile, for long-form creators on YouTube, it roughly breaks down to 50% from in-platform revenue and 50% from brand deals.
But we’re not trying to knock the creators making money through brand deals on Instagram or TikTok. It’s just a different approach to monetization, and many of the creators eyeing a move to YouTube are doing so because YouTube’s ad revenue model offers a more reliable and predictable income stream that also generates passive income as the video continues to get views over time (especially if it’s evergreen). YouTube also allows for greater creative control because brand deals usually involve following a brand-approved script on a one-off collaboration with a one-time payout.
Common pitfalls and considerations for any content creator
Now that we’ve gone over short-form content and how Shorts’ new revenue-sharing model has fared over the past year, let’s explore some common pitfalls and important considerations for any creator.
Watch out for copyright issues when repurposing content
If a creator repurposes their content between platforms, such as taking a TikTok post and turning it into a Short, they should be aware of potential copyright issues if they used someone else’s music or sounds.
Typically, creators will tag the owner of the original sound or song if they use it in their own content, and it works similarly on both TikTok and Instagram. It’s an easy way for creators to not only give credit where it’s due, but it also helps creators avoid getting their content stricken (or even taken down) due to copyright infringement claims.
Let’s say that a creator is turning one of their TikTok posts into a Short. So far, there’s nothing wrong with that. But let’s imagine that the creator wanted some background music in that TikTok, and that they chose Doja Cat’s “Paint The Town Red” – probably one of the biggest TikTok songs in 2023.
If the creator didn’t save the original video (i.e. the version without Doja’s song on it), then the only version of the video they’d have is the TikTok post with the copyrighted music on it. This is why you’ll sometimes see posts that use a song from huge artists like Taylor Swift, Adele, or Doja Cat, only to have the music credited as ‘original audio’ from the creator themselves. And while it may not seem like a huge deal at first, it could potentially get the creator flagged for copyright infringement, which can affect the monetization of their channel. We can expect this issue to continue to evolve since Universal Music Group pulled its artists’ music from TikTok this week after being unable to reach a new licensing agreement with the platform.
Opportunity costs and burnout
While we often recommend that creators diversify across platforms as much as possible, there are also opportunity costs to consider. Sometimes, creators are hesitant to branch out because that means not only getting outside of their comfort zone, but also moving away from their primary monetary driver.
It can be scary and intimidating to try a new platform or different type of content, and it can be challenging for creators to ramp up and scale while still maintaining the quality their audience expects from them. This holds especially true for smaller content creators who are one-person shows, but for more established channels with a team of people, it’s not as bad.
There’s also the fact that there’s only so many hours in a day, and if creators are already feeling stretched thin, then pursuing a new content format could lead to burnout or feeling overwhelmed.
Advertisers and platforms are still figuring out how to monetize short-form content
Since the monetization of Shorts was so recent, brands are still in the process of figuring things out, and some brands are even hesitant to advertise on Shorts at all. Plus, for these types of brand deals, many brands are still relying on the playbook that they developed for sponsored long-form content, and we’ve seen that when it’s applied to Shorts, it isn’t always a perfect fit.
For long-form content, brands typically give creators a script, and will often require the creator to say certain things or feature their product within the first few seconds of the video. But that doesn’t translate to a 60-second Short very well because if a sponsored message is the first thing someone sees in a Short, it often affects the viewer’s trust while also killing the overall vibe of the Short before it even starts.
When it comes to short-form content, brands should give the creator more freedom in how they integrate the product or service. The video below is a great example of this:
Notice how in the Short, the creator tells you what an ice screw is before asking an intriguing question (i.e. Will this ice screw hold my weight?). Then, the video shows the creator placing the ice screw in a wall of ice, which further builds anticipation of whether it will hold him or not. And then, right before the climax where he actually tests the ice screw – that’s when he does the sponsored message.
It’s the same kind of thought process that American Idol uses where they go to commercial right before showing the judge’s reaction to get the audience to stick around through the sponsored message.
If he treated it the same as a long-form video sponsor and did the ad at the beginning, most people wouldn’t have stayed until the end and it would’ve killed the video.
This only underlines the importance of integrating the sponsors naturally, which also means brands have to trust the creators to work their product or service into the content in the way they know best.
