China-based social media application TikTok has started a new era in social media. The high interest of users in TikTok has led it to focus on short video formats on its rival platforms. Instagram Reels and YouTube Shorts are the clearest example of this. However, short videos don’t seem to have worked well for YouTube, the world’s largest online video platform.
Speaking to the Financial Times, a senior YouTube executive said that Shorts videos were disrupting YouTube’s biggest source of revenue—advertising. Moreover, many people in the company’s senior management staff think so. In fact, according to YouTube employees, YouTube may enter into a major financial crisis due to the Shorts feature it has introduced to rival TikTok.
So why do YouTubers think so?
Ads are YouTube’s number one source of revenue. The company was earning very high advertising revenues when only long videos were uploaded. But that changed with the launch of Shorts. YouTube ad revenue recovered in the last quarter, but fell in the previous three quarters. Advertising revenues on an annual basis are also in a downward trend. This is exactly what worries YouTube executives.
Google continues to work on what it will do to make more money from Shorts. However, no concrete steps have been taken in this regard. On the other hand; According to research by the Financial Times, as shorts videos continue to be popular, creators are moving away from long videos, which has a multiplier effect in lowering YouTube’s ad revenue. We will wait together to see the future moves of the platform.
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