TikTok is on a roll. After its latest move to integrate more of a social graph, it’s now tapping into the creator economy by making the platform more attractive. Specifically, the new TikTok LIVE will offer livestreaming creators the ability to generate recurring revenue through premium subscriptions.
This follows similar moves from creator-economy giants such as Twitch and YouTube, offering creators the ability to charge their fans for extra perks. These perks will include subscriber-only chat, custom emojis, badges and other things that let followers formalize and display their status as superfans.
This means a few things for TikTok. For one, it’s meant to attract creators to the platform. That in turn means more content, which is the lifeblood of social channels (which don’t otherwise pay for content like a media company does). Second, it means diversifying its revenue model with subscription products.
In this case, subscriptions happen between users and creators… but TikTok can take a cut of revenue. This joins its primary advertising revenue model and lets it take several shots on goal. That’s particularly important in these early stages as TikTok develops its business… and as the ad world is in flux.
Going deeper on the dynamics of the new program, it will let TikTok creators formalize their status as creators, while cultivating stickier and recurring relationships with fans. As noted, this model has been validated in other creator-heavy channels like Twitch and YouTube, so its a logical move.
Speaking of YouTube, TikTok is increasingly competing directly with the UGC video powerhouse. In fact, eMarketer recently reported that TikTok is close to surpassing YouTube in U.S. consumers’ time spent with media. It’s meanwhile, reaching global scale, having passed a billion users globally late last year.
As for the specific features of these subscriptions, TikTok positions them as follows (verbatim):
– Subscriber Badges: Subscribers receive badges that are displayed next to their name on their profile and upgraded over time.
– Custom Emotes: Subscribers get access to exclusive emotes custom-designed by the creators to use during LIVE sessions to bring the community together and make your sessions more spirited.
– Subscriber-Only Chat: When the subscriber-only chat is turned on, creators and their subscribers have exclusive access to one another, enhancing an even more personal connection between creator and viewer.
All of the above started to leak out over the past few weeks as TikTok teased the program on the @TikTokLIVE_creator channel. But it all became official this week. The program will enter closed beta testing on May 26, initially with a smaller batch of creators that it has invited to the program.
The Race is On
Backing up, what is the creator economy and why is it important? In short, it’s the music teachers, Etsy artists, and cooking shows of the world. It also includes traditional fields like graphic design. The common thread is online personas or micro-brands that distribute knowledge or goods online.
This segment has expanded in the Covid era as SMBs like yoga instructors and music schools were forced to join these ranks of digitally-distributed pros. Correspondingly, the trend has attracted a new breed of software providers that build production and operations tools for creators of all stripes.
Meanwhile, broader tech-world evolutions have addressed the creator economy, resulting in a sort of perfect storm. These include TikTok and the arms race of creator-targeted features from players like Instagram (Reels) and Snap (Spotlight). The race is on to be the go-to creator platform.