The exponential rise, and cultural influence of Tik Tok has been well covered in the media, but there’s a surprising strength that the media world should take more notice of. Tik Tok has been designed to address an increasingly fundamental issue facing tech platforms: equitable creator-platform relationships. Creators are the fuel behind platform success, and the power of creator influence is being recognised by the investors behind platforms.
By nurturing creator-platform relationships at a fundamental level through their app design, Tik Tok sets itself up for sustainable growth in the long term and will continue to migrate audiences, and investment, from competitors.
The precarious creator-platform relationship.
Major platforms like YouTube, Instagram and Spotify still haven’t worked out how to fairly and effectively nurture and create revenue for the creators that fuel their success.
The dynamic between creator and platform reads like a toxic relationship:
Infatuation
At the start of the relationship the creator enthusiastically joins the platform, excited at the prospect of reaching an audience at a scale that is usually reserved for mainstream television stars.
Honeymoon period
As their following grows creators start to earn through ad-revenue share. This is the peak of the honeymoon period, the creator has turned a passion into a source of income.
Dramas
Where our star-crossed lovers erode is when creators go big time. The revenue that creators source from platforms isn't enough to dedicate to creation full time. This forces creators to come up with additional, and inefficient, revenue streams which has a detrimental effect on the content they create.
Looking at YouTube helps us see how this relationship goes south.
Say you’re a YouTuber who averages 150k views per video (which is in the top 3% of creators on YouTube). At the current rate of 68% revenue share this equates to $3-5 per 1000 views and $600 per video. Not great for a week’s work. More popular creators can supplement their income with sponsorship insertions which can give them up to $10k per video. Great money but it affects the quality of their output (for example an annoying Squarespace demonstration in the middle of a vlog) and it’s up to them to design indirect paths to monetisation (i.e affiliate marketing) outside of the platform.
YouTube isn’t even the worst offender. Spotify pays an abysmal $0.006 per stream. Instagram, despite netting $20b in ad revenue in 2019 (more than YouTube) doesn’t revenue share at all.
This inequitable relationship has led to an erosion of loyalty for creators. After all if the only way a platform directly pays is through audience size they will happily jump to whichever platform gives them the most exposure.
Enter the exclusive contract
Platforms are attempting to solve this with exclusive and lucrative contracts for big time creators, structured similarly to talent contracts of traditional media companies, or professional sports teams:
YouTube signed PewDie Pie in an exclusive contract
Spotify signed Joe Rogan for up to $100m
Twitch signed Fortnite streamer Nickmercs
A consistency with these contracts is that they are all based on buying large audiences, not talent, which leads to a new set of platform challenges:
Unless a contracted star is consistently pulling in large audience numbers on a platform that relies on ad-revenue such as YouTube the platform is at risk of not recouping their investment.
Officially aligning with personalities acts as an endorsement which can negatively impact the platform’s image.
If platforms focus incentives on top stars, inevitably they’ll feel out of reach for new creators. This discourages the long tail of content that makes these platforms valuable in the first place.
Direct Revenue Pioneers
Some newer players (Cameo, Patreon, Bandcamp) are designed to form a direct revenue link between creators and their fans. However, these platforms don't have a public feed, without the audience driver of content discovery they can't scale. The absence of scale makes it hard for new creators to gain exposure, it also means revenue opportunities are segregated to those who already have large audiences that they can migrate over and start earning.
So what we are left with is large platforms who treat most of their creators poorly, and smaller platforms who can’t create the necessary scale for creators to flourish.
Tik Tok - Designed with the creator at the core
Tik Tok merges the scale of YouTube and IG with the direct revenue opportunities of Patreon and Cameo. They did this by designing the app for creation, democratising content in the feed and developing direct revenue opportunities for creators.
Designing the app for creation
Tik Tok has an insane content creator-consumer ratio. Over 34% of DAUs shoot daily
They drove this through a relentless focus on encouraging users to create video:
Prioritizing creation through app design. The most prominent icon on the feed is the create button.
Including advanced editing software within the app. All the features needed to edit video is within the app, so anyone can create engaging content without additional software, tools or skills.
Treating creators like first class citizens. Tik Tok gives creators full-service support: Weekly content suggestion emails, 1-on-1 demos with TikTok’s staff, and live in-person events.
Using an app that is designed to make creation easy allows for creator output efficiencies, making it cost-effective and improving creator margins. A very attractive proposition for those used to spending weeks and expensive software to drive their content.
Democratizing content in feed
There is no ‘friend graph’ in Tik Tok. Content recommendations are based on what you engage with, not who you follow, so a creator doesn’t need a large audience to get a hit on Tik Tok. This means creators can focus on posting amazing content, and all users are equally incentivized to do so. Doing this creates a ‘flat stage’ for creators and naturally rewards talent not audience size. This encourages new creators to join Tik Tok and can deliver monetization opportunities a lot faster than other platforms which require months if not years of output before getting rewarded financially.
Direct revenue opportunities for creators
Ownership of direct revenue streams allows creators to monetize their content without external disruption from sponsorships or influencer agencies. Tik Tok has developed a few ways for creators to do this
Shoppable Icons
Creators on Douyin (The Chinese version of Tik Tok) can create shoppable videos linked through Alibaba’s Taobao store. These are native embeds (seen below) and currently Douyin is only taking a 1% cut of revenue. This will be rolled out globally in the near future.
Tik Tok’s short video format means that a creator can dedicate a video around the shoppable icon, rather than inserting an indirectly relevant link to a pre-existing video. This means they can create videos for income and videos for entertainment, without the two interfering with eachother.
In-Feed Donation stickers
Though these icons are currently exclusively for charity it is reasonable to expect the feature to evolve into a direct revenue stream option for creators from viewers
Direct revenue is important as there is no middle-man taking a cut. An in-feed sticker takes the direct revenue opportunity of platforms like Cameo and Patreon and scales it through the discovery feed.
Internal Influencer Marketplace
Tik Tok’s own influencer marketplace allows brands to connect directly with content creators. Tik Tok will likely take a cut for the introduction, but they can afford to undercut pesky 3rd party influencer agencies, which means higher revenue for creators. This feature may be focused on larger content creators but the higher margins make it an attractive ambition for all.
Note: IG has recently developed their own ways for creators to monetiSe but after years of not sharing revenue from ads and forcing content corroding options on creators (Think of the terrible #SponCon style content and calls to follow the link in bio) I believe it’s too little too late.
By nurturing creators of all levels, and opening up opportunities for more equitable income streams, Tik Tok widens the pipeline of creators that fuel the attention, growth and impact that lead to long term platform success.