How Does TikTok Make Money?

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Tiktok, launched in 2018 by Chinese tech giant ByteDance, is the world’s fastest growing social app.

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ByteDance previously acquired Musical.ly and Flipagram, which were merged into TikTok. It also operates a Chinese version of TikTok called Douyin.

BYTEDANCE WEBSITE

Its Chinese heritage has also led to various controversies. Many politicians in the US are now advocating to ban the app outright.

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However, this hasn’t stopped TikTok from growing like gangbusters. In 2022 alone, it is projected to generate over $10 billion in revenue.

But how does TikTok, which can be used at no cost, actually make money? 

ADVERTISING

The bulk of the revenue that TikTok generates comes from ads displayed in between videos, branded hashtags, and more.

TIKTOK FOR BUSINESS WEBSITE

Users on TikTok can launch their own e-commerce store. TikTok takes a percentage cut from each sale a creator makes.

SHOP COMMISSIONS

TIKTOK SHOP WEBSITE

ROYALTIES

In March 2022, TikTok introduced a music distribution platform called SoundOn. TikTok, after 2 years, pockets 10% of the royalty fees. 

TIKTOK WEBSITE

GIFT FEES

Creators can receive virtual gifts called Diamonds during their livestreams. TikTok retains 50% of the Diamonds earned.

TIKTOK WEBSITE

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