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In a new update announced late yesterday, YouTube made headlines when it launched a feature called “gifts” that works quite similarly to TikTok’s popular “Live Gifting” feature.
Specifically, viewers can send digital gifts during live streams to support creators. YouTube Jewels allows viewers to buy virtual currency to send gifts to creators who appear in real-time during live streams. These digital gifts, purchased in "Jewel" packs, can be converted into "Rubies" for creators, where each Ruby is equivalent to one cent. If a creator receives 100 Ruby, it will be equivalent to $1.
Live Gifting is a feature that has been around on TikTok for a while and works in a similar way to the one described above. Viewers buy “Coins” which they can send as virtual gifts like pandas, sunscreen, etc., each of which has a certain value. These coins are converted into “Diamonds” for creators, which can then be cashed out, although TikTok keeps 1% of these earnings. TikTok’s Live Gifting feature has proven to be a success, helping the platform reach over $10 billion in user spending last year. However, there has been controversy surrounding the idea that Live Gifting can encourage overspending, especially among younger audiences.
YouTube Jewels does have one major limitation: it’s currently only available to creators and viewers in the United States. YouTube also clarified that the feature will only work on vertical live streams via its mobile app. This vertical-only limitation seems to be YouTube’s attempt to bring a more interactive live experience to a mobile-first audience, mirroring TikTok’s success with vertical short-form video content.
Whether or not this feature will be a success for YouTube, especially with competition from TikTok and even Twitch (which has had a virtual gifting option for a long time), remains to be seen. But TikTok's proven model shows the potential for real, and not insignificant, revenue, so it's no surprise that YouTube is giving it a try.
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