TikTok will start to share Ad Revenue with Creators

TikTok Pulse is coming to the U.S. in June

Hey Guys,

As you know I’m always covering the future of anything digital and the future of the internet. I have a soft place in my heart for the passion economy that allows creators to have more ownership over their personal brands and creativity. So this is pretty legit news that’s trending.

Huge progress with a big caveat here, not everyone is eligible to get paid. TikTok is slowly closing the gap with how it treats Creators as compared with Snap and YouTube.

The initiative will start in June in the US, before extending to other countries. TikTok is opening up a new way for creators to make money. The company plans to start sharing a cut of revenue with top creators when their videos run alongside certain ads. The program mirrors how YouTube pays out creators, and it could lead to more significant payouts from the platform, which has yet to offer a substantial way for creators to make money.

TikTok is still growing much faster than YouTube, Instagram and its competitors, even as YouTube Shorts and Instagram Reels try to keep up. Their ad-revenue like that of Amazon is eating into Facebook and Google’s marketshare little by little.

Who is Eligible?

The new program, called TikTok Pulse, allows ads to be specifically run alongside “the top 4% of all videos on TikTok,” the company wrote in a blog post today. Creators and publishers with at least 100,000 followers are eligible to receive a cut of revenue when their videos are included.

https://newsroom.tiktok.com/en-us/tiktok-pulse-is-bringing-brands-closer-to-community-and-entertainment

• Must have at least 100k followers

• Can receive cut of revenue

• Top 4% of all videos on TikTok rule.

The blog says TikTok will be adding 12 categories of Pulse where brands can put ads next to culturally relevant content. The categories include beauty, fashion, cooking, gaming and more. This is not unlike the “categories” of Substack, for instance.

TikTok Sharing up to 55%

TikTok will share 50 percent of ad revenue from Pulse with approved creators. That’s close to what YouTube offers creators, giving them a reported 55 percent cut from ads. TikTok’s Pulse will launch in June in the US, with additional markets coming sometime this fall.

This is positive news for the “ownership economy” stimulated by a new wave of Creators and pressure from Web3 that offer much more than 50% of profits, though with limited platforms of scale.

Passion + ownership = Creator Economy, but there is not much of a middle class yet. Just winners, losers and suckers. With few actual winners thus far even in 2022. The FOMO of influencer marketing is mostly a scam, according to the actual data. As is the dream of solo-entrepneurship unless you have a decent diversification of revenue built into your business model.

Just don’t tell the kids.

TikTok needed to up their game to achieve more parity with Snap and YouTube who are pushing for more sharing mostly due to pressure from their actual ecosystem.

Until now, TikTok’s main way of compensating creators has been through its “Creator Fund,” which pays out select users based on the popularity of their videos. But creators have said the payouts from this program can be small and inconsistent (Engadget), which means it hasn’t offered creators a sustainable revenue stream the way that YouTube’s ad program has for some video makers. The ugly truth.

Our own Internet Princess on Substack is a dual creators on TikTok and Substack now, to compensate for this. That’s neat if you can cross from video, to podcasting to essays so effortlessly as a 20-year old. Rayne Fisher-Quann is the new breed of creator who can be on multiple different platforms and bring her tribe along with her.

TikTok Pulse has potential and will usher in more mainstream support for Creators, who have been operating a bit like an underworld of gig-workers, often working ridiculous hours with poor mental health conditions in an always-on attention ecosystem.

This experience has opened the doors for brands and advertisers to not only put their brand in the center of where culture is created, but to actually be a part of the conversation. From #beautytok to #booktok to #sportstok, content and communities exist for every interest and passion imaginable. - TikTok Blog

As TikTok have opened up to longer form content like 3min and 10 min videos, they have walked into YouTube’s turf and more educational content, and not just silly stuff. For niche creators that’s where the real life begins.

As of May 4th, 2022 - TikTok shared that Pulse will include a 50-50 revenue split with creators. That’s not at a Web3 standard, but it’s a start and better than relying on Creator Funds for momentum to build a real ecosystem for pros and personal brands that take off.

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TikTok insists it has 1 billion. That’s how many monthly active global users TikTok said it had in September. It is likely taking marketshare away from YouTube, Instagram and even Netflix in 2022 I suspect. In China, Douyin is doing incredible things with E-commerce as well.

TikTok Pulse is a major step in the right direction for the ownership economy in the 2020s. More companies like Pinterest, Reddit and LinkedIn now have Creator funds, slowing making the creator economy a more central part of their platforms to reward good content and personal brands that want to turn pro on a bifurcating internet with one foot (or two feet) in Web2 and one eye on Web3.