YouTube Shorts Monetization: How To Earn Ad Revenue With Short-Form Videos

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Making money on YouTube just got easier, as the video platform has introduced a new process for monetizing Shorts, its TikTok competitor.

As of February 1, YouTube has started sharing ad revenue with eligible Shorts creators. The new initiative, which makes up part of the revamped YouTube Partner Program, was first announced last September.

By allowing creators to earn money from ads that are viewed between Shorts content, YouTube is shaking up the status quo when it comes to short-form video monetization. On TikTok, only those with over 100,000 followers can join its Pulse ad revenue share program. Worse still, creators are reporting “extremely low” payouts. Meanwhile, Instagram remains hesitant to share ad dollars with Reels creators. With YouTube’s latest move, its rivals will certainly feel the pressure to offer better monetization pathways for creators.

Here’s a quick guide on how YouTube Shorts monetization works, and what you need to do to start earning.


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How does YouTube Shorts ad revenue sharing work?

YouTube Shorts are short-form videos that are up to 60 seconds long. While it doesn’t make sense to run pre-roll ads before each individual Short, YouTube has come up with a promising plan to help Shorts creators earn ad revenue. Here’s how it works:

1. Shorts ad revenue gets pooled every month

According to YouTube, “revenue is shared on ads that are viewed between videos in the Shorts Feed.” That means viewers will only see an ad after watching a certain amount of Shorts. Every month, revenue from these ads will be pooled and used to reward Shorts creators. That money will also help cover costs of music licensing.

2. YouTube then calculates the Creator Pool

More specifically, the ad revenue is allocated into the Creator Pool based on views and music usage across all monetizing Shorts. If a creator uploads a Short without music, all revenue associated with its views goes into the Creator Pool. However, if they upload a Short with music in it, then YouTube will split the revenue associated with its views between the Creator Pool and music partners based on the number of tracks used.

For example, if you upload a Short featuring one track, half of the revenue associated with its views will go to the Creator Pool, while the other half will be used to cover the costs of music licensing.

3. Creators get allocated ad revenue in the Creator Pool

Next, ad revenue in the Creator Pool is distributed to creators based on their share of total views from all monetizing Shorts in each region. For example, if a creator gets 5% of all Shorts views uploaded by monetizing creators, they’ll be allocated 5% of the revenue in the Creator Pool.

Note that your payout will be determined by your share of total Shorts views, and your revenue share won’t change whether or not you use music in your videos.

4. Creators get 45% share of their allocated ad revenue

Finally, creators will keep 45% of their allocated ad revenue. So, if a creator is allocated $1,000 from the Creator Pool, they will be paid $450.

Still got questions? To better understand how Shorts monetization works, watch this video where creators Colin and Samir interview YouTube employees about the new initiative:

How to start monetizing YouTube Shorts

Step 1: Join the YouTube Partner Program

To start monetizing Shorts content, creators will need to join the YouTube Partner Program (YPP). The program allows revenue sharing from ads being served in your long-form videos, or next to your Shorts. Eligible creators can also access other monetization features on YouTube, such as channel memberships and merch shelf.

Who is eligible?

Previously, only creators with over 1,000 subscribers and 4,000 watch hours in the last 12 months were eligible for the YPP. But here’s the good news: YouTube has added a second eligibility option to enter the program. Shorts creators can now apply for the YPP if they have 1,000 subscribers and 10 million Shorts views over 90 days.

Note that you’ll have to meet either eligibility options for Shorts or long-form video. The public views for Shorts in the Shorts Feed won’t count towards the 4,000 public watch hours requirement.

As of October 2022, valid public Shorts views for creators not already in the program count towards eligibility for the YPP.

Currently, the program is only available in select regions. See the full list here.

So, how do I join the program?

If you meet the eligibility requirements, you can sign up for the YPP by following these steps:

  1. Sign in to YouTube on a computer.
  2. Click your profile picture at the top right, then click YouTube Studio.
  3. In the left menu, click Earn.
  4. Click Start to review and Accept Base terms.
  5. Click Start to set up an AdSense account, or link an existing active one. You should then see In Progress in the Get Reviewed step.

Once you’ve submitted your application, YouTube will review your channel to ensure it follows its guidelines and policies. The processing time can be up to one month. To check the status of your application, go to the Earn section of YouTube Studio.

What do I need to do after being enrolled in the program?

YouTube has recently updated the YPP with a new modular contract structure, which includes the Watch Page Monetization Module (for long-form videos), the Shorts Monetization Module (for Shorts), and the Commerce Product Addendum (for fan funding features like channel memberships).

Whether you’re an existing member of the YPP, or you’re just signing up now, you’ll need to take the following actions to start monetizing Shorts:

  1. Sign in to YouTube Studio
  2. In the left menu, select Earn.
  3. Click Get started for each optional Module to review and accept terms. To monetize Shorts specifically, accept the Base Terms and the Shorts Monetization Module.

Both current and new monetizing creators will need to review and accept the new YPP terms. Note that if you don’t accept at least the Base Terms by July 10, you’ll be removed from the program and will need to reapply if you wish to rejoin it. 


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Step 2: Create engaging Shorts content

The work doesn’t stop after you get accepted into the YPP. In order to earn a substantial amount of ad revenue through the Shorts monetization initiative, obviously, you’ll need to consistently create quality Shorts content.

Need help creating engaging Shorts content? We’ve put together a list of best practices that may help you achieve viral success.

Start earning with YouTube Shorts

While results remain to be seen, by setting lower thresholds, YouTube’s Shorts ad revenue-sharing program seems to have the potential to benefit more creators than TikTok’s. As TechCrunch reports, only the top 4% of all TikTok videos can be monetized through TikTok Pulse. And according to Fortune, TikTok creators are only getting “negligible” payouts from the program, with some making less than $5 despite having more than 100,000 followers.

YouTube’s new initiative offers an opportunity for creators to diversify their income and make some extra money every month. Whether you’re already creating short-form video content, or you’re looking to branch out into the increasingly popular format, YouTube Shorts might just be the ideal platform to start.

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About the author

Teresa Lam

Teresa Lam is The Leap's managing editor and a writer with a focus on creative communities. She was previously features editor at Hypebae.
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