How YouTube shorts may be causing Google problems

More than 2 billion monthly viewers who are signed in watch YouTube Shorts, according to a recent Google announcement. This figure is higher than the 1.5 billion monthly active users for YouTube Shorts that were revealed in 2022. Although the high numbers put YouTube’s short video feature ahead of rivals like TikTok and Instagram Reels, they might not be so beneficial for the platform as a whole. Shorts may harm the core, long-form video business of the Google-owned video streaming network, the Financial Times reported, citing company sources.

Long videos are ‘dying’

The short-video platform Shorts “risks cannibalizing its core business,” the report claims. The potential that long-form videos, which generate more income for the company, are “dying out” as a genre was also raised in recent YouTube strategy meetings, according to the source.

Additionally, it states that the YouTube team believes “content creators are making fewer long-form videos — driven by a lack of consumer appetite and commissions from brands that favour short-form content for product placement”. According to the team, YouTube Shorts were “designed to complement, not compete with, all the other formats creators use” on the platform, including audio and livestreams. As Shorts become more popular, YouTube must now promote them by giving artists funding and incentives to produce exclusive content. At the same time, the business is still trying to figure out how to increase Shorts’ ad revenue. Late last year, the company started running advertisements on Shorts.

Falling ad revenue

The ad revenue for YouTube had been declining year over year for three consecutive quarters. Last quarter, though, it began to show signs of life. The second quarter (Q2) of 2023 saw YouTube generate $7.67 billion in ad income, according to Google’s figures. Comparing this to the same time last year, it is 4 percent higher.

Overall, Google’s quarterly results were favorable, with both ad and cloud revenue increases. The corporation earned $74.6 billion during the quarter that ended in June, up from Q2 2022’s earnings of $69.7 billion.