There is an open secret in short form video. Even the most popular creators on TikTok don't make a lot of money from the platform.
TikTok is the leader of the short form video feeds that have arisen in the last few years. According to reports from the New York Times, a new ad revenue sharing model for short form video will be announced by the end of the year.
The first platform that made it possible for creative people to make money by posting on the internet was YouTube. In 2007, three years after the platform was founded, it introduced its partner program, which gave creators of ads before or during their videos 45% of the revenue.
The creators of TikTok are paid through the Creator Fund. Over the next three years, TikTok said it would double the pool in the U.S.
YouTube paid creators over $30 billion in ad revenue over the last three years.
TikTok and other short form video apps don't have a revenue sharing program yet because it's difficult to split ad revenue on a feed of short videos If you put ads between two videos, who will get the revenue share? Who made the video that appeared before or after it? Is it possible that a creator whose video you watched earlier in the feed should get a cut as well?
Jim Louderback, the former CEO of VidCon, thinks that the industry will figure out how to make money from this stuff. The creators are going to go where the money is if they don't have to.
It could have been figured out by the video sharing site. At its Made on YouTube event on Tuesday, the company is expected to announce a model similar to the Partner Program. If the rumors are true, creators of shorts on the site would get 45% of ad revenue, which is less than what they get on videos on the site. The creators will follow the money.
You can't make a lot of money on TikTok. What about the girl who started posting dance videos out of her bedroom when she was in high school? It is not coming from TikTok itself. She and her sister got rich through a lot of different things. Jimmy Donaldson, who made $54 million last year, can't seem to make money on TikTok.
The Creator Fund model doesn't work. Since the pool of money in the Creator Fund doesn't grow, creators earn less money as TikTok grows.
Hank Green said in a video that he initially made about 5 cents per thousand views, but the number of creators in the program outpaced the growth of the program. He paid out about 2 cents per thousand views. A 10 million views a month would net you just $200, which isn't going to pay the rent.
TikTok can change the lives of creators who build an audience on the platform. If it weren't for their TikTok fame, the D'Amelio's wouldn't have gotten the chance to work on their own fashion line and reality show.
D'Amelio is the CEO of the family's ventures.
The creator economy would benefit from the ad sharing model being worked on by TikTok. TikTok has changed the lives of tens of thousands of creators by allowing them to share their creativity with the world. If many of the creators could turn their creativity into full time jobs, it would be a huge step forward.
The program allows brands to pay to place their ads next to the top 4% of videos on the platform This is the first time that 50% of ad revenue can be earned by creators. Only creators with over 100,000 followers who also make the platform's top 4% of videos are eligible for this program. There is a chance that the ad revenue sharing program will make it easier for people to get access to this kind of earnings.
TikTok is good on awareness. Louderback said that it's a great place for people to become aware of you. When it comes to conversion, whether you are a brand that wants to sell a product, or a creator that wants to sell a subscription service, YouTube can be a better platform
The platform doesn't stay their bread and butter for long when creators build their audience on it.
Tyler Gaca said in June that he no longer relied on it. The Creator Fund helped cover some of my bills when I was making seven videos a week.
Gaca turned to podcasting and other writing projects for more sustainable income as payouts from the creator fund became less reliable.
He said that the creator fund doesn't help as much anymore. That is because I am not as active.
It is not a guarantee that creators can use their TikTok followings to sell products or join other platforms.
"With my band Scary Pockets, we spun up a TikTok presence pretty quickly and got to 100,000 followers on TikTok within three to six months." We were excited about it until we realized it wasn't very important for us. We can't send these people to the streaming service. It's difficult to get them to buy something.
It is thought that this is due to the difficulty in understanding TikTok's algorithm.
Sometimes you post a video and it gets a million views and other times it gets 100 views. That is the main part of thatcurated system. It reduces a creator's ability to connect with their followers.
It shouldn't be that way with the amount of value creators generate for these platforms.
Gaca said that every content creator friend he had talked to shared the same fear of collapsing under their feet. I found myself overworking myself at the beginning, like doing full, minute-long comedy skits with costume changes and background changes, seven days a week. It was great to build an audience, but then I had a big crash.
This image was taken at TechCrunch.
Major social platforms have had a hard time keeping up with TikTok.
In November, one creator said that they had been offered $8,500 for 9.28 million Reels views on the platform, which is why they decided to go there. Users don't seem to want a similar experience. Some TikTok-like changes to its app had to be walked back after users expressed deep dislike for them.
According to internal documents leaked to the Wall Street Journal, users of the photo sharing service are only spending 18.6 million hours with the product. Less than 10% of the time TikTok users spend on the platform is spent.
The company doesn't share metrics about how engaged users are. About a year ago, TikTok had one billion monthly active users.
If it can pull off the ad revenue share model, it will be able to prove that it is the best way to make money on short form video. Social apps like to copy each other. The creator economy is going to boom if other platforms figure out their own revenue sharing models quickly.
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