Editorial Note: Opinions and thoughts are the author’s own and not those of AFROTECH™.
TikTok is once again finding itself at odds with the U.S government as it fights to stay available here in the U.S. Previously, TikTok had to go up against The Commitee On Foreign Investment In The United States because the company’s ties to China through its owner Bytedance prompted some concerns by the U.S. government for national security. President Joe Biden signed a new law in April 2024 that would force the sale of TikTok to a U.S.-owned entity, or it will face a permanent ban here in the U.S. starting January 2025. TikTok then asked the Supreme Court to place a pause on the potential ban to hear its arguments on why the platform should be able to operate in the U.S. The Supreme Court will hear the start to its arguments on Jan. 10. Today, TikTok is a place not only to discover content but also to engage in commerce. TikTok Shop launched in September 2023 and has quickly become a mainstay with those looking to sell on the internet, whether you are a brand wanting distribution or a creator wishing to earn some cash. That is why a potential ban would have a meaningful impact on the “Creator Economy.” The Creator Economy is a phrase that was popularized back in 2020 when venture capital dollars poured into companies that were looking to help those with creative talents run their brands/businesses. I will touch on the ways that brands and creators have used TikTok to monetize their channels, what future opportunities the platform has to help creators monetize, and what I believe will happen come January.
There are a variety of ways that brands and creators look to monetize their presence on the app. The first one that TikTok made available was livestream. Due to the rise of livestreaming as a source of information and entertainment, like we have seen with Twitch streamer Kai Cenat, TikTok sees an opportunity to be the go-to live entertainment app for the the next generation, and in order to do that creators need to feel that being on livestream is worth the money. The platform has long had livestream gifts that viewers can purchase and give to the creator. That is not the only way creators can receive gifts. You can also give gifts for the short-form videos they post to their profiles. So whether you are a creator that likes to chat or prefers making videos that people can watch whenever, TikTok is looking to become that spot for you. It’s not only a place where people can earn money for themselves, but it also helps them raise money for causes they care about. Donation stickers can be put on a creator’s livestreams to help them raise money for causes and nonprofits that matter to them. Although gifts were one of the core ways that TikTok looked to help creators monetize, the company has ventured into shopping after launching TikTok Shop. If you have been on TikTok recently, you can’t help but see all of the creators making videos with shoppable links. This is reminiscent of the blog era when people would make money by adding affiliate links on their websites. Given the reach that some creators on the platform have, it makes sense that the platform sees them as not only creators of informative or entertaining content but also as partners to brands wanting to sell products and get new eyes on their offerings. TikTok Shop outperformed Shein and Sephora in the third quarter of this year when it came to consumer spending, especially among Gen Alpha.
An opportunity that I believe TikTok should take advantage of is becoming a partner to up-and-coming creators instead of looking to prioritize those that already have an established base. For example, what I would have liked with the initial release of the Creator Fund was that the new creators received larger payouts than those already monetizing off the platform because of their larger bases. Serving as not only the distribution partner but the financial partner to up-and-coming talent, TikTok can open up monetization opportunities for the business as well as the creators on the platform. I also would like to see TikTok leverage its Series feature and the natural inclination for TikTok creators to make videos together in order to create limited series that are for purchase to watch. In the same way that Netflix was once the home of diverse stories being told, I believe TikTok can be that as well.
I do not believe that TikTok will be banned come January due to the Supreme Court being willing to take a look at the arguments that TikTok presents. President-Elect Donald Trump has also changed his tune on his own relationship with TikTok. That he saw the app as an asset to his presidential campaign and not a detractor, I believe, is enough to keep the app here in the U.S. for people to create on and shop on for years to come.
