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How TikTok Makes Money?

IndianMoney.com Research Team | Posted On Wednesday, April 17,2019, 06:03 PM

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How TikTok Makes Money?

 

 

What Is TikTok and Who Owns It?

TikTok, also known as Douyin, is a media application for creating and sharing short videos. It is owned by ByteDance and was launched in September 2016 as ‘Douyin’ in China. Douyin was later introduced to the international market as ‘TikTok’. TikTok is the leading short video platform in Asia and USA. TikTok was the most downloaded app in October 2018, in the United States of America.

As of November 2018, TikTok is available in more than 150 markets and in 75 languages. TikTok allows users to make short videos of 3 to 15 seconds and short looping videos of 3 to 60 seconds. As of July 2018, TikTok had more than 500 million users across the globe. TikTok videos may only be 15 seconds long, but they have a big impact. TikTok was recently crowned the ‘World’s most valuable start-up’.

TikTok is in the news lately as Madras High Court directed the Center to ban TikTok downloads. TikTok has moved the Supreme Court over the ban. Both Google Play and App Store have banned the download of TikTok, as per directions of the Ministry of Electronics and Information Technology (MeitY).

TikTok describes itself as a destination for short mobile videos. It has a large user base with about 80 million downloads in the United States. TikTok is very popular amongst the youth in India. ByteDance has a valuation of USD 75 Billion.

ByteDance owns many other platforms apart from TikTok, in fact they also own Toutiao, a popular news platform with 240 million downloads, and products like Xigua Video, TopBuzz and BuzzVideo.

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How TikTok Makes Money?

Merger Of Muscial.ly With TikTok

The first prototype of Musical.ly was launched in April 2014, while the official version was launched in August 2014. In Muscial.ly, users were allowed to create 15 to 60 seconds of lip-syncing  videos and select sound tracks to accompany them with different play speeds and add filters and effects. The app allowed users to search for popular users (musers), content, trending songs, sounds, hashtags, and interact with followers.

Musical.ly had around 90 million registered users in June 2016. The number of users crossed 200 million in May 2017. In November 2017, ByteDance, the owner of TikTok, bought Musical.ly and combined the two apps into TikTok in August 2018.

Here’s How TikTok Makes Money

In October 2018, Bloomberg had reported that BtyteDance had not turned profitable yet, but its 2018 target revenue is more than USD 7 billion. There are rumors on the company planning to go public this year.

TikTok has an option of in-app purchase of coins starting at USD 0.99 for 100 and leveling up to USD 9.99 for 10,000. Users can give coins to favorite creators who in turn exchange coins for digital gifts.

Sensor Tower, a mobile intelligence firm, reported worldwide TikTok users spent more than USD 3.5 million on the in – app purchases in October 2018, which is nearly four times more than what they did in October 2017. It is not clear as to what the platform earns, but Musical.ly had a similar revenue system and earned 20% on each tip.

Digiday reported that brands and companies might also start advertising on TikTok platform in the future, given its explosive popularity. As per Nanjing Marketing Group, Douyin, the Chinese version of TikTok, displays splash ads that cost about USD 150,000 for a day and newsfeed ads for USD 4 per click. Major brands like Pizza Hut have done such paid campaigns.

Money Making Options On Tik Tok

Here’s how you can make money on TikTok:

1) Cross Promoting

If you are an influencer on YouTube or social media, then you can use TikTok to cross promote your ventures. On becoming popular in TikTok, you can mention your ventures and get people to like and follow you on your primary revenue generating platforms.

This is a core strategy of marketing if TikTok is bought by someone else or if TikTok changes the way of working or fails altogether. It is important for engaging a large audience base.

2) Promoting Brands

This is the most basic way of making money for influencers. They first become popular and then start promoting brands. This is a very viable way of making money. Brands are ready to pay thousands of Rupees but you must have a large number of followers. A few influencers have lost followers as they focused too much on making money by over stressing on a particular brand. You must avoid doing this as it is not a good move if you want to build your future on social media.

3) Selling Your Own Stuff On TikTok

You can sell your stuff on TikTok. If you run merchandise or a product based business, then you can be creative by promoting it on TikTok through videos. Don’t make it obvious by talking only on the product in the video. Use the product smartly. You can mention the link to buy the product and make a good amount of money this way.

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