Short-form video needs better monetization, creator funds aren’t the way to do it

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by Jacob Solomon Mar 24, 2023 News
Short-form video needs better monetization, creator funds aren’t the way to do it

The creator funds seemed to be a way for social media platforms to say "well done for your great content, here's your reward, we've got you"

That idea has been turned on it's head a few times.

The idea of unifying platforms and their creators has been a source of tension.

It's probably due to money. The creators didn't always feel like they were getting a fair amount of money for their work.

There were vague explanations from the platforms as to how the payouts were determined. After listening, the platforms started reexamining their creator funds and in some cases replacing them with more acceptable options that creators would be happy with.

The most talked about update is TikTok's Creativity Program Beta, which replaced the TikTok Creator Fund, and the expansion of the Partner Program, which replaced the Shorts Fund.

It's still true that creator funds are a band-aid over the fact that short-form video is not monetized as effectively as long-form video on the internet, so you need additional incentives for creators to support the newer product on your platform.

He's correct.

The problem is that the original funds were never part of the long term plan. They were knee-jerk reactions to the rise of the short-form format so the platforms could lock down more creators. When they were replaced was always going to be a question.

A work in progress for the platforms is what that replacement looks like. Meta has paused its own version of a creator fund for Reels in the US to focus on developing a revenue share deal. They don't seem to have a good way to reward people for their work. Chances are they won't revisit the creator fund whenever they do.

To get creators to make more content and keep them motivated to do so has been achieved by creator funds.

At the recent South by Southwest conference in Austin, Sean Kim admitted as much as he could. The creator fund was not created to enable creators to make money. It was a response to the competition. The creators' money was an unimportant part.

All of the funds have a cap regardless of how many creators they have. As platforms gained popularity, their share of the pots became smaller and smaller.

That doesn't mean creator funds don't work. feedback from creators on its creator solutions, including their unhappiness with the creator fund, led to the creation of the TikTok Creator Fund 2.

The first fund worked better than this one. As it is more exclusive, there should be less participants and more control. It is too early to say if the new creator program on TikTok has changed anything for the better.

Why creators aren’t making tons of cash from creator funds

People are spending more time watching shorter videos that don't make as much money as longer ones. It is difficult to make money from short videos that are too long to include a lot of ads.

Let's take a look at the video sharing site. If a creator makes a long form video that lasts 10 minutes, they can include an ad before the video, as well as one at the end. A lot of ads are making money from one video. By comparison, if that same creator posts a short video that is 30 seconds in length, YouTube can play an ad right before or in the middle because it is too short. Between four and five shorts will be where the ads will be placed.

The number of ads played per second is not that different from the number of ads that are short-form. It doesn't generate the same amount of revenue in the same way.

It makes sense that the creators are trying to make more money. For example, look at Tik Tok. Series allows creators to put paywalls around their long content. Spotlight Challenges give cash prizes for users who post the best videos on a particular theme. This is a time of experimentation.

Lindsey Gamble, associate director of influencer innovation at Mavrck, said that platforms are rolling out more creator monetization tools such as subscriptions and tipping, which give alternative routes for creators to earn money that are more recurring and do not eat into the platform's revenue too much. One of the challenges for platforms is to balance helping creators earn money with making sure they are doing right for their businesses.

The crux of the problem isn't directly addressed by these new monetary streams. More onus is placed on the creators themselves to fill the pay gap. creators aren't willing to rely on their fans to pay for their work

What can be done instead?

Phil Ranta said that revenue share on advertiser spend against a creator's content is the best solution to replace creator funds.

Which is understandable. Paying outs are tied to revenue share. The platforms are still paying for content even though they are not making money.

It was the reason why the shorts fund was removed from the partnership program. Since February, creators have been able to share in the ad revenue generated through eligible shorts. This deal is for the long-form content stream.

The wayYouTube has monetized creators is innovative and has been ahead of its time. The best business model that has ever existed is that creators are paid for their work and audience members are not required to pay.

To enable ad revenue share on other platforms, they need to have technological infrastructure and a plan about how they are going to allocate ad revenue to the creators.

Before a more permanent share deal is considered or put into place, creator funds have been like a stepping stone.