Amid rising speculation about the future of the app, with authorities in several regions calling for potential restrictions due to its links with the Chinese Government, TikTok is looking to deepen its economic roots, in order to make it harder to justify removing it from circulation.
Earlier this week, TikTok announced that it plans to hire 10,000 staff in the U.S. over the next three years, as it looks to maximize its growth opportunities. And today, TikTok has unveiled a new TikTok Creator Fund, which will pay prominent creators for their videos on the platform.
As per TikTok:
“To further support our creators, we’re launching the TikTok Creator Fund to encourage those who dream of using their voices and creativity to spark inspirational careers. The US fund will start with $200 million to help support ambitious creators who are seeking opportunities to foster a livelihood through their innovative content. The fund will be distributed over the coming year and is expected to grow over that time.”
The program could help TikTok on two fronts – for one, monetizing short-form video is difficult.
Vine found this out hard way – after establishing itself as a key cultural reference point, and building a significant audience, Vine eventually collapsed because it wasn’t able to monetize effectively. With Vine’s main content offering being only six-seconds in length, that made it increasingly difficult for Vine to implement ads, as users would either skip by them or ignore them in-stream. And that made it impossible for Vine to adequately compensate its top creators.
Vine did try to counter this, adding longer-form videos and pre-roll ads in its dying months, but with greater revenue opportunities elsewhere, Vine’s top creators gradually migrated away, taking their audiences with them. Many of them went on to become millionaires via YouTube and Facebook, while Vine was shut down, as usage continually declined.
That’s why Vine creator Dom Hoffman was so adamant that creators on his new short-form video app, Byte, get paid from the outset, even if that means dipping into its own funding to make it happen.
Now TikTok is following a similar playbook. As TikTok creators build their followings, the lure of monetization on other platforms will become harder to ignore, and TikTok will be hoping that by ensuring they get paid, even without a comparable ad network, it can keep them around through this allocated funding.
That could keep more creators posting more often, which keeps the audience engaged, which builds the platform, etc.
It doesn’t seem like a sustainable system, long-term, but with the economic impacts of COVID-19 looming, it could well be a key element in further solidifying TikTok’s place in the broader digital eco-system. This brings us to the next key point.
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As noted, TikTok has already announced that it’s willing to create local jobs if the US lets it remain in operation, and with this initiative, it will further embed itself into the American economic landscape by additionally becoming a payment stream for many creators. At a time when jobs are getting harder to come by, the US Government will need to find ways to ensure more people are getting paid. Can they really block TikTok when it could be a provider of so many opportunities?
That seems like a fairly clever play from TikTok – by becoming a bigger provider for more Americans, it will be able to put more pressure on US regulators to reconsider any moves to ban the app if indeed the talks end up getting that far. US President Donald Trump has said that he’s considering banning TikTok as part of China’s punishment for the COVID-19 outbreak – but if doing so would also see the reduction of 10k jobs, as well as impacting many creators, that decision becomes more strategic than symbolic.
It’s certainly an interesting initiative, on both fronts, and while TikTok creators will be happy to have more opportunities to make money from their efforts, it’ll no doubt lead to additional scrutiny from US regulators.
TikTok’s Creator Fund will open to applications from US creators beginning in August. Eligible creators need to be 18 years or older, meet a baseline for followers, and “consistently post original content in line with our Community Guidelines“.