Let’s face it, right now, any news linked to TikTok, despite having no political element whatsoever, will always have mention of the app’s supposed ties with the Chinese government. This relationship has led to some serious questions regarding the app’s future in the US, and TikTok is now also facing challenges in terms of user growth and creative revenue share, both of which could end up either making or breaking the world’s most popular social platform.

Uh Oh

Revenue share has always been a challenge for the app – it’s more difficult to monetize short-form video because of the lack of opportunity to insert pre- and mid-roll ads. Well, TikTok is apparently now working on a solution, with The Information reporting that the app will soon launch a new ‘Creator Fund 2.0’ program, which aims to provide more monetization opportunities for the app’s top stars. Meanwhile, TikTok’s also developing a program to allow creators to paywall longer videos in the app.

Based on The Information’s report, TikTok’s new creator fund model will give creators higher payouts, in response to criticism of the fund’s first iteration, which, to be fair, did drive incremental revenue to creators, albeit being highly skewed. Many creators also noticed that as TikTok grew, creator funding diminished, which was counter-intuitive and has seen several of its top talents seek alternative apps as their focus instead.

One of the closest names that came to mind was obviously YouTube, which had recently launched its version of short-form monetization that pools together all funds dedicated to Shorts, allocating to creators based on view counts. Although actual payout amounts have yet to be generalized, even estimates are likely to surpass TikTok’s current options, driving creators to instead give it a crack on YouTube.

Based on data from data.ai, TikTok’s growth is starting to stagnate. It may be the most popular app of the moment, but it’s also facing more challenges in retaining its best creators, as it pushes to increase both exposure and payouts. Despite this, TikTok remains in a strong position, with the platform having over 1.5 billion users and having become a key source of entertainment for many. However, various concerns continue to plague the app’s now-uncertain future in Western regions, especially as the US has begun banning the app on all state-owned devices. The situation has gotten so critical that TikTok CEO Shou Zi Chew is set to testify before the House Energy and Commerce Committee on March 23, which is a first for him. A lot seems to be riding on Chew’s answers.

The Wrap

At best, a lot is presently in flux with TikTok, and if it can’t provide adequate responses or facilitate enough money-making on its platform, then it could well be facing a big curtain call, at least in the West. While it won’t likely significantly impact marketing plans, it’s worth the consideration. This new hurdle might even push TikTok to come up with new programs and features to win over users from older age groups.

Sources 

http://bit.ly/3YMwq2K