How Does TikTok Makes Money?

If you ask any teenager about their favorite time pass then TikTok definitely makes a top place in their list!

TikTok is basically a video sharing App where you can easily create small singing, acting, or dubbed videos with their amazing editing features.

TikTok is currently working in 154 countries and has more than 500 million (50 crores) users out of which 65% are under the age of 20 years.

Tiktok also surpassed the PUBG, Facebook, Instagram, and youtube in the number of downloads across the iOS platform under the six month time period consideration.

Source: Sensor Tower

 

History:

TikTok is the product of Bytedance which is among the world’s top valued private companies with a valuation of about $75 billion.

Bytedance launched Douyin (Chinese version of TikTok) in 2016 along with TikTok, both the apps use the same software but work on a different network due to Chinese censorship laws.

Alongside another App got viral named Musical.ly which works on the similar concept of TikTok, as TikTok got backed by a lot of big investors they finally acquired Musical.ly at the valuation of about $1 billion.

One year after the acquisition of Musical.ly they finally decided to merge both the app’s data under the name TikTok.

Revenue Streams:

TikTok’s revenue source is not solely dependent on advertisement but works on in-app purchases similar to mobile games like CandyCrush, Clash of Clans, etc.

In TikTok user has to buy virtual coins with real money and using these coins they can buy and send emojis and virtual gifts to their favorite TikTok creator.

In between this transaction, TikTok takes about 20%, Google plays 30% and 50% of the transaction goes to the creator.

As per the stats, TikTok’s revenue in the month of October (2017) was about $1 million and it rose to about $3.5 million in 2018.

Source: Sensortower

How users can make money on TikTok?

Users need a good number of likes and followers to have a stack of emojis and virtual gifts that they can cash. Apart from this, they can also make revenue by doing brand promotions and advertisements for products.

Also, they can share their TikTok videos on other platforms like Instagram, Youtube, and Facebook to earn from their short videos.

Future of TikTok:

TikTok is moving similar to the paths of highly successful apps like Instagram, Facebook, and youtube which makes them look highly appreciable.

TikTok engagement time is very high close to 52 minutes/day and also highly liked in the age group of less than 20. TikTok userbase is almost gender-neutral in numbers which seems quite positive.