Is YouTube's TikTok-Style Shorts Threatening To Sink Its Long-Form Video Revenue?

Launched in 2021 to compete with ByteDance-owned TikTok, YouTube Shorts has quickly amassed over two billion users, but it appears to have drawn viewers away from the platform’s traditional longer video offerings, which historically generated substantial ad revenue.

What Happened: Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) online video-sharing platform YouTube’s senior ranks are concerned that the platform’s “Shorts” feature might be cannibalizing its long-format video revenue. 

In recent strategy meetings, YouTube’s senior staff has deliberated the possibility of long-form videos “dying out” as a format due to the popularity of short-form content, reported Financial Times, citing multiple people familiar with the figures.

See Also: Did You Know These 10 Mind-Blowing Things About YouTube?

Influenced by brand preferences for shorter content, content creators produce fewer long-form videos, which traditionally offered more advertising opportunities and higher click-through rates to e-commerce sites.

This shift has not gone unnoticed in YouTube’s financial reports. 

Last year, the platform reported its first-ever quarterly decline in ad revenue since breaking out its performance metrics in 2020. The subsequent two quarters also showed revenue declines compared to the previous year. 

While in July, the platform made around 13% of Google’s ad revenue, a senior staffer compared the declining trend with people reading fewer books, the report noted 

Why It’s Important: Previously, YouTube’s aggressive pursuit of higher ad revenue raised questions about potential consequences and trade-offs. 

The platform announced a change in its ad format — replacing two consecutive 15-second ads with a single 30-second ad on top-performing content on connected TVs. 

It also justified the decision to prohibit ad-blockers and prioritize ads to sustain its free accessibility for users worldwide. 

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