TikTok stands as No. 1 in the short-form content sector but YouTube Shorts may be following behind as it is using the app for a blueprint. Cheddar News explains more.

YouTube Shorts Looks to Compete with TikTok

Welcome back to closing bell and cheddar news everyone while google giving Tiktok a run for its money, google owned youtube looking to gain a leg up with Youtube shorts videos. The company's answer to Tiktok and instagram reels last week, it announced in ad revenue sharing program that gives creators of 45% cut of ad sales based on their views of videos. And while Tiktok is hugely popular at the moment, creators on the app do have trouble monetizing their content. Something that youtube has law long been known for. Well, joining me now is Cheddar News senior reporter Michelle castello Michelle. Great to see you. So Tiktok the market leader right now in the short form video, but why should it be concerned about the rise of some of these copycat competitors? Well, you know, I know we always talk about Tiktok when it comes to short form video as you pointed out. But a lot of these other platforms like instagram reels, Youtube shorts, which is owned by google or even Snapchat spotlight, they not only have the resources to scale and bill something quickly. They have also the learnings that they've learned from Tiktok and they know what does well on top of that. They have a lot of these relationships and mechanisms in place to make sure that when they are ready to monetize, they'll have those brand and advertising partners that trust that they have the right safeguards and gatekeepers on their platform to make sure that the content advertises on the right thing. Now. The third thing is really having that creative base that can create these viral clips, when, which we have seen go viral on Tiktok and we know that we've seen reports that instagram reels has struggled a little bit with that. But the idea really is that you have a lot of these platforms that are already catered towards creators and they have that base. They just need to turn on that little switch to make sure that everyone can make money on every front. So that's why Tiktok should be afraid. All those partnerships and relationships that already exist. Why is youtube shorts? The one to watch? Well, you know, this is really interesting. So Forest Actually did a recent study just looking at the popularity of platforms and how often people use these platforms on a weekly basis. And people said when it came to Instagram reels, about 9% of the people surveyed, so they use it about once a week. YouTube shorts really surprised me. About 17% used YouTube shorts once a week and Tiktok was at 23. So yes, Tiktok is still the leader, but about one out of four people use it, but YouTube shorts is not that far behind. And when you consider the fact that they have that huge base of users insider intelligence actually pegs about 2.5 times of more Youtube users in general than Tiktok users, which is about at 93 million. Um, there is a chance really to convert them. Now, there is some concerns overall, They do think that short form video is capitalizing on the time that people would spend watching traditional Youtube videos. But if Youtube can just shift that audience over to their shorts product, it does actu really make sense for them because they're going to still be making money on some sort of video products. So that's really why they're one to watch and they really do great when it comes to advertising. We know that google is a leader in advertising overall. I know sure. It's just announcing a monetization plan as well. Michelle, what can you tell us about that? So this is a really interesting move for short. So everyone knows that on Youtube, you can be a part of the Youtube partners program which ensures that not only do you have brand safe content that advertisers want advertise on, they also make sure at the same time that they can split revenue now last week, they said beginning in early 2023 Youtube short creators can get 45% of ad revenue based on the views. Now, one thing that's interesting about that is you do have to become a Youtube partner. Um, what you to be a Youtube partner, you need to have at least 1000 followers and you need to, I think have at least 10 million shorts views within 90 days. And so they'll split the revenue that way. Um, and this really gives a place for people to monetize, They know that youtube will pay out because they have paid their partners in the past now there has been some controversy about Youtubers losing money in the long run. But overall that system is pretty safe and pretty trusted by brands and creators alike. So I think this does give them an edge. Whereas Tiktok is still developing things like that. Well, Tiktok we know has been in the spotlight for a long time actually on security issues. I think some people a bit apprehensive wondering if it is, but what's the latest on that front and how can it give competitors an edge. Tiktok was actually really interesting recently, just this week, the U. K. Regulators are finding them, I think about $29 million for for violating child privacy laws. What they were concerned about is there's some certain Children's laws that were enacted recently in the UK that make sure that social media platforms or platforms in general really cater to kids. Make sure that parents know the rights they have and that data, especially their location data isn't being broadcast to other people. Now. Apparently, Tiktok and initial research by the I C. E. O. And the U. K. Was unable to do that. So they are being served with an intent of notice for this fine. Now Tiktok has 30 days to appeal that fine and that notice and that violation, I did speak to Tiktok and they said they are going to work and appeal that. But the concern really is the sharing of Children's data at this time, but it's not just the U. K. That's concerned about that. They were paying when the company was still musically in the by the F. T. A. That if the Federal Trade Commission FTC and they did have to pay a fine in a few years ago, the Netherlands also is going after Tiktok for violating Children's privacy. Tiktok is appealing it there too. So this is something across the board that is concerning people now that isn't to say that youtube hasn't had its issues with child privacy, but I think being based in the US and being a little bit more stringent with local laws has given them a little edge in that front and they aren't under the ire of so many investigators at this time, especially when it comes to those kid privacy laws. Do you think Tiktok Michelle is a bit of an anomaly here. Being able to break out in the social media space among some of these long established players like a meta and a google, we should know which are based here in the U. S. You know, I don't think that they are an anomaly. We do see this every once in a while and what I do question is will they get to the scale that we see of a facebook or instagram or youtube. So we saw this, I think once when we saw snap um and Snapchat really uh spark up. And the thing about them is they did build a strong advertising business for their company while they won't ever be one of the top two or even the top three. They do have a relatively um robust advertising business that can support that platform. We see this with challenges all the time like Pinterest as well. Um there was a lot of talk about a french company that runs be real for a little bit. So I do think that they are going to be a challenger because it is a new format for that we've seen. And even though there's copycats out there, Tiktok just seems to have their algorithm right. I do worry though however, that a lot of these regulation issues will hold them up especially because they're a chinese based company and there's a lot of concerns over data there. So that I think is the biggest problem, interesting. Alright, Thanks for our residents social media expert, cheddar news, senior reporter Michelle castel Leo