YouTube Shorts: TikTok Killer?

YouTube’s Shorts turns 4 this year. As a relative latecomer to the world of shortform video, has it fulfilled its destiny as Alphabet’s TikTok killer? An attempt to own shortform video across social media? Or is it merely just another platform in the creator landscape?

In a world where attention spans are dwindling and content consumption is becoming increasingly fast-paced, YouTube Shorts is of course a major player in shortform video. With its bite-sized videos lasting no longer than 60 seconds, YouTube Shorts aims to capture the fleeting attention of viewers and provide them with thumb-stopping entertainment on the go.

While Shorts is a relative newcomer (launching in September 2020), it's not exactly breaking new ground. TikTok has achieved global domination over the last five years (growing from 271M users in Q4 2018 to 1.6BN users in Q4 2023). It is firmly established as the dominant shortform video platform, leveraged by artists to build, engage and grow a following.

TikTok is good for virality and discovery, and has been the music industry’s fever dream for the last few years in terms of finding new artists. Instagram’s Reels delivers a more curated experience and focuses on quality visuals, being Meta’s attempt to captivate audiences and advertisers alike with shortform video. Snapchat is popular with a younger demographic and focuses on privacy.

With its vast user base and extensive library of content, YouTube has the potential to make a significant impact in the shortform video space. But a TikTok killer? User demographics suggest otherwise. TikTok users are younger, with the largest cohort being aged 19-25 years old. The majority of YouTube users are in the 26-32 range, and YouTube also skews more male.

Adoption of Shorts and recent events

Since launch, Shorts has experienced an impressive surge in popularity. The platform's user base has played a significant role in driving its adoption, rapidly embracing this new format, with creators and viewers alike flocking to explore its potential. In 2021, Ed Sheeran - one of YouTube’s most watched and followed artists - premiered exclusive previews of his = album with 14 unique Shorts, which was an undoubted coup for the emerging format.

With over 2 billion monthly active users, YouTube has a massive audience ready to explore and engage with any new feature. Additionally, YouTube's robust infrastructure and recommendation algorithms have helped promote Shorts to users, ensuring its visibility and reach.

Earlier this year, there was a large open goal facing Shorts, with perhaps a once-in-a-generation opportunity to inflict serious damage on its competitors - TikTok especially. TikTok’s licensing deal with Universal Music Group was allowed to expire - for 3 months on records and 2 months on the publishing side - meaning that music from artists and songwriters signed to the largest major music company on the planet could not be officially used by one of YouTube’s biggest competitors.

This provided not only a (short-term) tactical advantage, but it’s historically prescient - it wasn’t so long ago that the music industry was bemoaning the ‘value gap’ that YouTube itself was creating. It’s got to be said that relations between the wider industry and YouTube are markedly better in the here and now, and indeed how that harmony was brought about is a valuable institutional memory for those at Alphabet, as it no doubt provided a narrative framework for how the TikTok licensing situation was eventually resolved - a further competitive advantage.

TikTok is also facing calls for bans, breakups and sell-offs in various jurisdictions around the world, and is indeed even outright banned in India. A number of territories prohibit government employees from using the app (either completely, or restricted to personal devices only). By contrast, the only major markets experiencing ongoing YouTube restrictions include China and Iran.

With YouTube's vast resources and established audience, Shorts has quickly become a formidable competitor in the race for short format supremacy and is a credible challenger to TikTok’s dominance. 

Monetisation

YouTube introduced various monetisation options for Shorts, including the YouTube Shorts Fund, a $100M fund dedicated to rewarding creators for engaging and original content. This incentive has not only attracted established creators but has also encouraged aspiring talent to join the Shorts community.

However, as time has passed, questions have arisen regarding the actual payouts to creators and how they compare to the initial promises made during launch. Evidently, there is a gap between expectation and reality, but consider the broader context and one of the main challenges associated with monetising shortform content - short videos typically generate lower ad revenue compared to longer videos, making it more challenging to offer substantial payouts to creators.

YouTube acknowledged the concerns raised by creators and has stated that the payouts are based on various factors, including the number of views, engagement, and overall performance of Shorts.

It’s worth bearing in mind that other shortform video platforms such as TikTok have also faced criticism regarding their monetisation strategies. The nature of shortform content presents unique hurdles when it comes to generating revenue, and platforms are continuously exploring solutions to address these challenges.

The Competitive Landscape

YouTube Shorts has a number of advantages over its competitors for your bite-sized attention:

• Vast user base: with over 2 billion monthly active users, YouTube provides a built-in audience for Shorts creators. This extensive reach allows creators to potentially gain more exposure and engagement for their content.

• Established infrastructure: YouTube has a robust infrastructure that supports seamless video streaming and content discovery. The platform's recommendation algorithms are highly effective in suggesting relevant Shorts to users, increasing the chances of relevant content discovery and engagement.

• Creator tools and features: a range of creative tools and features that empower creators to produce high-quality content is another advantage (other platforms have their own toolkits for creators). From video editing options to music integration and filters, creators have the flexibility to experiment and enhance their Shorts. Additionally, YouTube's monetisation options, such as the Shorts Fund, provide financial incentives for creators to continue producing engaging content.

But of course there are some areas in which they are weaker than others:

• Late to the party: YouTube Shorts entered the shortform video landscape after the established success of platforms like TikTok and Instagram Reels. This late entry means that Shorts has to compete with incumbent brands who have already captured a significant portion of the market. Gaining traction and attracting users away from these platforms is a challenge.

• Limited duration: Shorts have a maximum duration of 60 seconds, which can be seen as a limitation for creators who want to tell more complex or detailed stories. Platforms like TikTok and Instagram Reels offer longer video durations, allowing creators more flexibility in their content creation.

• Discoverability Challenges: While YouTube's recommendation algorithms are powerful, the discoverability of Shorts can still be a challenge. With the vast amount of content available on YouTube, it can be difficult for new creators to cut through and gain visibility. This can make it harder for emerging talent to gain traction and grow their audience.

• Monetisation Opportunities: While YouTube offers monetisation options for creators, the actual payouts for Shorts have been a topic of discussion and disappointment among some creators. The monetary rewards may not be as substantial as initially anticipated, which can impact the motivation and financial viability for creators on the platform.

The YouTube Ecosystem

The success of YouTube Shorts can have both positive and negative implications for viewership on the main YouTube platform.

Shorts has the potential to attract a new segment of viewers who prefer short and snappy content. By offering a quick and engaging experience, Shorts can capture the attention of users who have limited time or prefer bite-sized entertainment. This influx of viewership can lead to increased engagement and overall growth for the YouTube platform.

On the flip side, the success of Shorts may divert viewers' attention away from longer-form content on the main YouTube platform. If users spend a significant amount of time consuming Shorts, they may have less time and inclination to explore longer-form content on the main platform. This could potentially impact viewership and engagement metrics (and therefore, ad revenue) for traditional YouTube videos.

If Shorts continue to gain traction and attract a substantial viewership, YouTube may prioritise the development and promotion of shortform content. This could lead to a shift in content strategy, with creators and YouTube itself focusing more on producing and promoting Shorts. The platform may invest in tools, features, and resources specifically tailored to enhance the Shorts experience.

The success of Shorts may also prompt YouTube to adapt its algorithm and recommendations to accommodate the growing popularity of shortform content. The platform may fine-tune its algorithms to ensure that Shorts receive adequate visibility and promotion, while still maintaining a balance with longform videos. This could impact how content is surfaced and recommended to viewers, potentially influencing their viewing habits.

YouTube might explore ways to integrate Shorts and longform content to create a seamless viewing experience. This could involve incorporating Shorts within the main YouTube platform, allowing users to easily transition between short and long videos. By integrating the two formats, YouTube can cater to different viewer preferences and maximise engagement across both types of content.

Monetisation Strategies may also be reviewed and refined as Shorts gain popularity. YouTube could explore additional monetisation options specifically tailored to this format, including ad formats optimised for Shorts, sponsorships, or even dedicated monetisation programs similar to the Shorts Fund. These strategies would incentivise creators to produce more Shorts and contribute to the growth of the format.

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