The company says it will start giving more revenue to popular creators as it tries to chase down TikTok.
Neal Mohan, chief product officer for YouTube, said on Tuesday at the annual creator event that the company will pay a portion of revenue from Shorts, distributed based on the videos that get the most views.
This is the first time real revenue sharing is being offered for short-term video.
It is not known how lucrative the opportunity will be for Shorts creators. Every month, it will pool together ad revenue from shorts. 45% of that amount will be paid to creators, who will get an undisclosed percentage.
Popular creators have been able to make money by running ads in their videos and keeping a portion of the revenue. The YPP was launched in order to allow that to happen.
The only way to make money in shorts was through a fund that was launched last year.
The threshold for applying to YPP will be 1,000 subscribers and 10 million shorts views over 90 days.
The Shorts Fund is a first step but creator funds can't keep up with the growth of short-form video.
TikTok has gained market share by providing an outlet for people to make short viral videos with music. In the second quarter, the rate of revenue growth was the lowest since the fourth quarter of 2019. The company said it was testing monetization models for shorts and that it was being challenged by changes in consumer behavior.
The same amount of money will be given to creators regardless of whether their videos include copyrighted music or not.
Mohan said that this allows them to remove the traditional complexity of music licensing.
Half of the revenue comes from ads that play before or during the video. There are ads in between the videos and in the Shorts feeds.
According to Mohan, Shorts has 30 billion daily views and 1.5 billion monthly viewers, which is the same as in April.
Jim Breyer was interviewed by CNBC.
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