YouTube Shorts Monetization: How It Works and Potential Earnings

Article by Muhammad Adeel Qayum Shaikh28 Jun, 2024

YouTube Shorts have been around for a while. But recently they’ve begun to catch on with creators and viewers more and more.

According to HubSpot’s 2023 Video Marketing Report, these short-form videos get better engagement and offer a higher return on investment than any other kind of video content. With the growing popularity of Shorts, you can reach a broader audience and drive more interaction with your content.

How does YouTube Shorts monetization work?

YouTube uses a revenue-sharing model to compensate Shorts creators. It calculates earnings based on ad revenue generated from ads shown between Shorts.

Revenue from these ads is pooled together. From this pool, funds are allocated to music partners and Shorts creators. Creators receive payments according to the performance of their individual videos.

The revenue-sharing process is broken down into the following areas:

Ad sales
Revenue pooling
Initial fund allocation
Music fund allocation
Creator fund allocation
Fund payment

Here’s a closer look at each:

Ad sales

YouTube sells ad spots to brands and shows these ads between Shorts videos.

Revenue pooling

All ad revenue from Shorts goes into a single pool. This pool is shared among creators, unlike the traditional YouTube setup.

Initial fund allocation

YouTube splits the pooled revenue. Some of it goes to the creator pool, and some covers music licensing. If a video has no music, all its eligible ad revenue goes straight into the creator pool.

Music fund allocation

For videos with music, revenue is split. If there’s one music track, half the revenue goes to music usage and half to the creator pool. If there are two tracks, two-thirds cover music licensing, with the rest going to the creator pool.

Creator fund allocation

Creators get a share of the creator pool based on their Shorts’ views. So, if a creator gets 4% of all Shorts views, they get 4% of the creator pool funds.

Fund payment

Creators receive 45% of their allocated revenue from the creator pool. YouTube keeps the remaining 55%.

Note: Shorts that violate intellectual property rules or use unoriginal content can’t earn money. Also, videos with inappropriate or offensive content won’t generate revenue according to YouTube’s guidelines.

YouTube Shorts monetization eligibility requirements

To make money from YouTube Shorts, you need to join the YouTube Partner Program (YPP).

This program has two levels, each with different requirements and ways to earn money.

Fan funding access

This level lets you sell stuff on YouTube and use fan funding features like paid memberships, Super Stickers, Super Thanks, and Super Chat. To qualify, you need either:

500 subscribers, three public posts in the past 90 days, and three million valid public Shorts views in the past 90 days
500 subscribers and three public posts in the past 90 days, plus 3,000 valid public watch hours on long-form videos in the past 12 months (Hours from Shorts, ad campaigns, livestreams, deleted videos, private videos, or unlisted videos don’t count.)

Ad revenue and fan funding access

Those at this level earn from both fan funding and ad revenue, including from YouTube Shorts and YouTube Premium subscribers. To qualify, you need either:

1,000 subscribers and 10 million public Shorts views in the past 90 days
1,000 subscribers and 4,000 public watch hours on long videos in the last 365 days

Once you reach these numbers, apply to the YouTube Partner Program. Then wait for YouTube to decide on your eligibility.

Additional requirements:

You must have or get an AdSense account.
You need to live in a country where the program is available.
You need to have two-step verification turned on and advanced features enabled.
Your channel must follow all YouTube monetization policies.
Your channel must not have any active community guidelines strikes.

How to start monetizing YouTube Shorts

Once you’re part of the YouTube Partner Program, turning on Shorts monetization is easy. Here’s what to do:

Sign in to YouTube.
Click your profile picture at the top right and go to YouTube Studio.
From the left menu, select Earn.
If you’re eligible, you’ll see an Apply button. Click it. If not, click Get Notified to finish the process later.
Click Start to review and accept the Base Terms.
Link your AdSense account or set up a new one by clicking Start.
Wait for YouTube to review your application. This can take about a month.
Once approved, accept the Shorts Monetization Module via the Earn section in YouTube Studio.

Additional monetization options like Super Thanks and Channel Memberships can also boost your earnings:

If you want to activate Super Thanks, head to the Earn tab in YouTube Studio and click Supers. Click Get Started and follow the instructions.
For Channel Memberships, click on Earn > Memberships > Get Started.

Note: If you’re using the mobile app, the steps might vary slightly. Just open the YouTube Studio app and tap Earn at the bottom to start.

Average earnings from YouTube Shorts

YouTube introduced its Shorts ad revenue sharing model last year to simplify music licensing and boost creator earnings.

Reports indicate that YouTube Shorts typically earn less revenue per thousand (RPM) views compared to longer videos. Generally, creators get between 1¢ and 7¢ per 1,000 views on Shorts. In contrast, longer videos usually earn between $1 and $20 per 1,000 views.

Let’s break down how you might earn from YouTube Shorts:

You upload a Shorts video in the US that gets a million views in a month.
That month, the overall Shorts views from creators in the U.S. is 500 million, and YouTube makes $300,000 from ads in the Shorts feed.
Out of these Shorts, 40% have no music, 20% use one music track, and 40% use two music tracks.
YouTube splits the ad revenue based on the type of Shorts content. If views are spread evenly, YouTube allocates:

100% of the revenue from videos without music to the creator fund
50% of the revenue from videos with one music track to the creator fund
33% of the revenue from videos with two music tracks to the creator fund

Here’s what that looks like:

YouTube puts $174,000 into the creator fund, and $126,000 goes to the music licensing fund.
Your million views account for 0.2% of the total monetized YouTube Shorts views that month. So, from the creator fund, you’ll get $174,000 x 0.002 = $348.
YouTube pays you 45% of your share, which amounts to $156.60.

More ways to make money with YouTube shorts

Join an affiliate program
Secure paid brand partnerships
Monetize livestreams
Sell subscription memberships
Sell custom products and merchandise
Repurpose your content

The YouTube Partner Program lets you earn ad revenue, but it’s not Shorts creators’ only option for making money. Try these ideas to boost your earnings:

Join an affiliate program

Affiliate programs pay you for revenue from clicks on your links, whether on YouTube or another platform. For example, the Shopify Affiliate Program works with influencers, educators, and content creators who teach their audience about entrepreneurship.

Secure paid brand partnerships

Paid partnerships offer another way to earn from your videos. Unlike YouTube ad revenue, you negotiate sponsorships directly with brands.

Brands might pay you to create content like product reviews or endorsements. To get these deals, you can set up a creator website, pitch to brands directly, or use influencer platforms to connect with interested brands.

Monetize livestreams

You can also monetize Shorts via Super Chat and Super Stickers. These allow fans to pay to send animated stickers or highlighted messages in a creator’s livestream.

Sell subscription memberships

Creators can enable channel memberships to earn monthly payments from fans in exchange for perks like exclusive content, emojis, live chats, and badges. To activate channel memberships, sign in to YouTube Studio, click on Earn, and go to the Memberships tab.

Sell custom products and merchandise

Another way to earn money is by selling your own merchandise online. Create branded items like t-shirts with your logo or launch a product line that fits your content niche. Use YouTube to make videos showcasing your products and announce new arrivals.

If you’re using Shopify to sell your merchandise, you can keep creating YouTube Shorts to highlight these products and attract more buyers. Continue to use engaging content to build brand loyalty and boost sales.

Repurpose your content

Repurposing YouTube Shorts on different platforms can grow your earnings by reaching more viewers. Say you have a video doing well on YouTube Shorts. Adjust it for Instagram Reels, TikTok, and Facebook Stories.

When folks on those apps see and interact with your clip, you make money from the same content across different places. This way, you can spread your videos everywhere, pulling in cash from multiple streams without making new clips for each one.

Ready to monetize YouTube shorts?

With short-form videos exploding in popularity, you can earn a decent income once you understand how to monetize YouTube Shorts effectively. Focus on creating engaging Shorts and use the advice in this post to maximize your earnings from YouTube.

YouTube Shorts monetization FAQ

How much do 1,000 views on YouTube Shorts pay?

The earnings for 1,000 views on YouTube Shorts can vary depending on your ads, location, and engagement. Creators usually earn between 1¢ and 7¢ per 1,000 views.

What’s the payout for one million views on YouTube Shorts?

Based on the average rates, you could make between $10 and $60 for one million views on YouTube Shorts.

Do you need 1,000 subscribers to earn from YouTube Shorts?

No, you don’t need 1,000 subscribers to earn from YouTube Shorts. The Shorts Fund lets creators earn money regardless of their subscriber count. However, you need at least 1,000 subscribers and 4,000 watch hours to join the full YouTube Partner Program.