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YouTube and TikTok Are Amping Up the Creator Monetization Arms Race
Kristin Snyder
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
YouTube and TikTok are going head-to-head on new ways to pay their content creators.
YouTube Shorts will now incorporate an expanded array of ads on its short-form video feed, Business Insider reported Tuesday, which could potentially lead to Shorts creators receiving a cut of ad revenues. Meanwhile, TechCrunch reported yesterday that TikTok is beta-testing LIVE Subscription, a new model which allows fans to directly compensate creators.
YouTube Shorts, which previously showed limited ads from select advertisers, will now expand to ads purchased through YouTube’s main video platform. While creators won’t immediately benefit from the change, YouTube plans on analyzing the Shorts ads’ performance to determine how it will pay creators, BI reported.
Currently, YouTube Shorts’ $100 million creator fund only pays out top performers and is set to end later this year. While creators on YouTube’s main platform receive a 55% cut of ad revenues, BI reported that Shorts creators have thus far found monetization difficult.
"The Shorts Creator fund isn't anywhere near large enough to incentivize larger creators to stick around or generate unique content for the platform,” Shorts creator Nicholas Crown told the publication. “Without ad rev sharing, creators generating millions of impressions on Shorts often make pennies from the occasional pre-roll ad that runs through AdSense on a Short.”
TikTok’s LIVE Subscriptions, on the other hand, will give creators on the video-sharing platform a chance to earn direct payments from fans, while giving paying subscribers access to exclusive chats, emotes and badges. The feature will launch with select creators on Thursday, TechCrunch reported; while pricing has not yet been announced, LIVE’s is believed to be “comparable” to livestreaming platform Twitch’s $4.99 monthly subscriptions. Instagram is currently testing a similar creator subscription model.
With TikTok and YouTube stars gaining popularity, both companies are seeking to offer new monetization models that would keep those creators on their platform. Social media influencers, for their part, have looked to spread their content across multiple platforms—as evidenced by Snap poaching TikTok stars for its own original content. In turn, both Culver City-based TikTok (which is owned by Chinese tech firm ByteDance) and Santa Monica-based Snap have introduced new ad revenue initiatives for creators this year.
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Kristin Snyder
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
https://twitter.com/ksnyder_db
What Hailey Bieber’s Skincare Company Reveals About Influencer-Led Brands
08:58 AM | March 06, 2023
When Hailey Bieber launched Rhode skincare last June, the release was coupled with YouTube videos detailingeachproduct. Bieber has since fully integrated the skincare line into her content, bringing on other beauty influencers to discuss it and highlighting it in get ready with me videos on her channel.
Bieber’s efforts paid off—Rhode has since become one of the most talked about skincare brands online, and the products often sell out. At The Upfront Summit last week, Bieber joined OBB Media CEO and founder Michael Ratner, who produces her YouTube series “What’s In My Bathroom” and “What’s In My Kitchen,” to discuss how she has merged her content creation with her business endeavors.
“YouTube is a great home because, most importantly, we’re able to reach Hailey’s audience,” Ratner said, adding that they can “cut out the middleman” of a traditional streaming service.
Bieber isn’t alone in utilizing her online platforms to start a beauty company. Kylie Jenner launched Kylie Cosmetics in 2014, and the line consistently receives high social media engagement thanks to intentional influencer marketing. But even influencers without the celebrity status of Jenner and Bieber have become entrepreneurs. Beauty YouTubers like Michelle Phan and NikkieTutorials have turned their expertise into makeup companies, while TikToker Hyram Yarbro did the same with skincare.
So how does the content creator to skincare mogul pipeline work?
Oftentimes, outside companies approach influencers about launching their own brands. Beauty and makeup brand incubator Madeby Collective, for example, was seeking a Gen Z star to be the face of a new line in 2020, and TikTok darling Addison Rae was the obvious choice. After approaching the influencer, they gave her the title of co-founder and Chief Innovation Office before launching Item Beauty later that year.
Bieber is trying to shove Rhode to the front of a field that even she admitted is incredibly crowded. Despite this, Bieber didn’t have a compelling answer when moderator Kobie Fuller asked how Rhode can stand out.
“To me, Rhode is a whole world. It’s a world of me, essentially” Bieber said. “In order for people to understand my vision for the brand, they would have to understand me.”
Bieber has become known for her various “glazed donut” looks, which range from nail designs to her skincare line. Multiple TikTok and YouTube tutorials re-created these looks as the trends swept through online beauty communities. And it doesn’t hurt when the person manufacturing these trends can use these platforms to show exactly how she gets these results—and promote her brand along the way.
Still, closely tying one’s company to one’s public perception is risky. On the extreme end is influencer Jeffree Star, who launched his cosmetics company in 2014 and often used elaborate YouTube videos to promote products. His items sold out quickly. But accusations of racism and sexual assault caused sales to decline. The fallout extended beyond him—beauty company Morphe, which rose to popularity through collaborations with Star, recently closed all of its U.S. locations due to low sales. Dragon Beauty, a company launched by YouTuber Nikita Dragon, was put on hiatus last month following the influencer’s arrest.
To that end, Bieber is currently embroiled in her own internet drama, having lost over one million Instagram followers after seemingly re-igniting her feud with Selena Gomez. Obviously, this is not comparable to the situations with Star and Dragon. But it does point to how even a slight misstep can have ripple effects on an influencer’s business and the fragility of someone’s online reputation.
The panel didn’t touch on this topic, and it’s unclear how the scandal has impacted Rhode’s sales—but the brand has become tangled with it. When Bieber re-posted someone’s Instagram story about Rhode that included a song featuring Gomez, fans noted that she changed the song to the version without Gomez. In turn, Gomez fans are urging people to stop buying Rhode products.
Even without pushback from vitriolic fan communities, influencer-led brands have struggled in recent months. In January, Sephora stopped carrying both Rae and Yarbro’s products after sales slowed down. Now, expertsare wondering if this is the beginning of the end for influencer-backed brands. Some have managed to produce products that can stand on their own—ironically, Gomez’s makeup line Rare Beauty has become the gold standard in this area. But Bieber’s philosophy of creating “aesthetically pleasing products that work” isn’t all that different from her competitors.
Still, it’s unlikely that influencer-led brands will die out considering 92% of Gen Z adults make their purchasing decisions based on influencer recommendations. But influencers are finding that getting people to spend money is a more difficult task than getting them to watch a video. And when influencer-entrepreneurs like Bieber are unable to quickly articulate what makes their brands stand out, it’s understandable why viewers aren’t buying what they’re selling.Read moreShow less
Kristin Snyder
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
https://twitter.com/ksnyder_db
Upfront Ventures Summit: The Chainsmokers Journey From Music to Venture
02:16 PM | March 02, 2023
Clark Studio
On Thursday, Upfront Ventures hosted its 2023 Summit and music icons Alex Pall and Drew Taggart of The Chainsmokers hit the stage, not to perform, but instead to discuss their venture journey.
The duo launched MantisVC, a Marina Del Rey-based early stage tech venture fund in 2019.
Pall and Taggart shared the stage with WndrCo’s managing partner Jeffrey Katzenberg to dive deeper into what their music career has taught them and how it translated over to their venture firm.
Here are some of the most important takeaways:
The duo believes hustle is more important than talent to achieve success.
“There's just so much content out there that's just happening all the time for no reason,” Taggart said. “There's just so much to pay attention to and if you have to wake up every day, and think out what your angle is going to be, try stuff, have it not work. You have to accept defeat so frequently and still get up and do it.”
Creating music was their foray into building communities.
“I think we have some real insight into how to build that community and tell that story because essentially, that's all we're trying to do,” Pall said. “No matter what your business is, you're telling the story about something that you think is important that someone else needs and will enjoy.”
Building connections and having conversations with pioneers in the space helped them launch MantisVC.
“Humility and being self aware are two of our strengths,” Taggart said. “I think knowing what we don't know is a big part of how we've gotten to where we are, and with the support of people around us, and the relationships we built, we understood that we were going to have to go out and prove to the world that we were serious about this and we respected the people that have come before us and the people that are doing it right now.”
VCs should offer all their founders support.
“When you're building something early on, you want that support, that hands-on feeling and the purpose of Mantis isn't necessarily right now to replace the incredible institutional investors that exist out there and have been around for a while,” Pall continued.
“But we want to be the Robin to their Batman, and we think there's a way that we can kind of partner with everybody in the space and provide our founders that holistic support they need. It's inspiring to work alongside people that share that same energy and we're constantly working on ourselves and I feel like it takes a really special type of human being to be successful in this world. Level of grit and determination and something that's continually fueled us and we want to invest in people like that.”
Feedback is necessary and essential to create successful products and businesses.
“Similar to products or services that you're building, it's important to get real life feedback out there and iterate on those things,” Taggart said. “And there's really just no substitute for that.”
Pall added, “I think for some reason in our culture, it's become an issue for people just to be straightforward and say no, about things and give honest feedback and, and move on. I think we can all learn a lot from just having more honest conversations with each other.”
Never lose sight of your core audience and mission as a company.
“Never forget what your core product is and what people love about that and make sure that every piece of innovation is derivative of that,” Taggart said. “I see a lot of friends of ours that have had really successful companies start to build ancillary projects that don't really feed their core audience that they're just making to compete with their competition. We do the same thing in songwriting, and you can never lose sight of what people love about you.”
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Decerry Donato
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
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