How Much Money Can You Make on TikTok?

Unless you’ve been living under a rock for the past few months, you’ve heard of, seen, or maybe even made a TikTok. As the coronavirus lockdown continues, people have more time than ever and they’re choosing to spend it on TikTok. With videos that often take little time and effort to make, TikTokers are reaching millions of subscribers and views overnight. But with all eyes on TikTok, the real question is: How much money can you really make on this app?

While Vine and Musical.ly have come and gone, YouTube was the only real creator driven platform for a long time. But now we’ve got another player in town. After launching on the app store in 2017, TikTok’s success has been nothing short of astounding over the past three years. The app builds on the short video format of vine and combines it with the successful music and voice dubbing feature from Musical.ly (which is owned by the same Chinese parent-company as TikTok). Creators on the app are called ‘TikTokers’ and many of them are building mass followings on the app. With 500 million active monthly users (half as much as Instagram, a very impressive feet) and more downloads than Snapchat, Instagram, and YouTube in 2018, the app is quickly growing into a major online content platforms. As the success of the app keeps growing, it begs the question of how its creators can make money from the app?

Unlike YouTube, TikTok is mostly ad-free and does not have an ad-based creator remuneration scheme like YouTube’s AdSense. This is partly related to the fact that TikTok heavily relies on music to generate its viral content making the app inherently incompatible with ad monetization because of copyright infringement laws. Therefore the question of creator remuneration on TikTok becomes far more complicated. Despite this clash with advertisement monetization there are still 4 main ways of making a lot of money on TikTok:

1. Brand Deals and Sponsorships: This is the most direct way for TikTokers to make money and the concept is perhaps as old as Instagram itself. The idea is that a creator promotes a product from a brand in exchange for money. Instagram is infamously filled with product placement; in the recent success of TikTok, its creators are being approached by brands more and more. Today, brands have become a lot more aware of the potential in social media product placement and their willingness to spend money there is more than likely to grow in the future. According to my research, it takes about the 100k followers for TikTokers to be able to make between $500 and $2,000 from a product placement on specific video. Of course this depends greatly on the type of product and creator but top TikTok creators are likely making anywhere between $50k to $150k.
2. Cross-Platform Promotion: As TikTok doesn’t have an established ad revenue system, many TikTokers are using this opportunity to transfer their TikTok following across all social media platforms, mainly YouTube and Instagram. This not only diversifies and solidifies their social media influence but also allows them to develop their opportunities for brand deals. In addition, it permits TikTokers to access ‘traditional’ revenue streams such as AdSense on YouTube. This exact technique was used by many Vine creators, including David Dobrik, Liza Koshy and Cody Ko that have thrived on YouTube after the fall of Vine.
3. Growing and Selling Accounts: This is another one that comes straight from Instagram. The idea is again simple, grow a following on a TikTok account which you can then sell online. The value of an account mainly comes from the amount of followers, views, and likes but sometimes a specific or rare username can be valuable in itself. On average, selling an account with about 100k followers will get you anywhere between $1,000 to $2,000.
4. Compilation Videos: This last way of making videos is a bit of a cheat. Just like cross-platform promotion, you are again only using TikTok as a stepping stone to making ad-money on YouTube. Uploading compilation videos first started with Vine and is now going forward with TikTok videos. The main issue here is that TikTok heavily relies on music which of course cannot be monetized on YouTube due to copyright infringement. The irony here of course is that most TikTok compilation channels are managed by individuals that are themselves profiting from TikTok content they did not create. While it seems too easy to be true, these videos often get millions of views in a very short amount of time and a YouTube channel that cleverly and regularly uploads TikTok compilations could easily be looking at a revenue of $100k per year.

So even though TikTokers cannot be paid directly from ads on the app, there are still some ways that money can be made! But if we think about the short-lived success of Vine and the fact that many of the most popular TikTokers are already starting to build their YouTube channels, I can’t help but wonder how long the success of TikTok will last. Thus, it begs the question if apps like Vine, Musical.ly, and TikTok will always be at the demise of YouTube as creators will inevitably shift their content to another platform in search of a more reliable revenue.