In a new update announced late yesterday, YouTube attracted attention when it launched a feature called “gifts” with a method of operation quite similar to TikTok's famous “Live Gifting” feature.
Specifically, viewers can donate digital items during live streams to support creators. YouTube Jewels allows viewers to buy virtual currency to send gifts to creators appearing in real time during live streams. These digital gifts, purchased in “Jewel” packs, can be converted into “Rubies” for the creator, where each Ruby is equivalent to one coin. If a creative person receives 100 Ruby, it will be equivalent to 1 USD.
Live Gifting is a feature that has been available for a long time on TikTok and has a similar method of operation as stated above. Viewers will purchase “Coins”, which they can send in the form of virtual gifts such as pandas, sunscreen, etc., each of which has a certain value. These coins are converted into “Diamonds” for the creator, which can then be redeemed for cash, and of course TikTok will retain 1% of this income. TikTok's Live Gifting feature has proven successful, helping the platform reach more than $10 billion in user spending last year. However, there is still controversy surrounding the idea that Live Gifting can encourage excessive spending, especially among younger audiences.
YouTube Jewels has one big 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 through the mobile app. This vertical-only restriction appears to be YouTube's attempt to deliver a more interactive live experience for a mobile-first audience, mirroring TikTok's success in vertical short video content.
Whether this feature will be a success for YouTube, especially with competition from TikTok and even Twitch (which has long had a virtual gifting option), remains to be seen. But TikTok's proven model shows its ability to generate real and non-trivial revenue, so it's no surprise that YouTube tried this feature too.
