Have you ever wondered how it works the TikTok social network when it comes to generating profits? Being one of the largest and most popular today with over 800 millions of active users per month, the TikTok platform has become a million dollar industry since its arrival.
If you want to understand how does TikTok earn, join us in this quick guide where you can understand his business model and how it grows every day.
Here's How TikTok Earns - A Quick Guide To Understanding Your Business
How and when was TikTok born?
Although today everyone speak di TikTok, it has not always been known in this way. It was initially an education-focused social network to share short videos (lasting 15-60 seconds) to allow users to teach or learn about different topics.
Although it was a great idea of friends Alex Zhu e Luyu Yang, the platform wasn't appealing enough for the public and after six months of development, they decided to change their approach.
History of the birth of TikTok
Now the goal had changed. The company was looking for a new direction in entertainment and was beginning to see teenagers as the ideal audience in the United States, a market characterized by viralization and the creation of new trends.
This evolution will join music and video within the application and that's how it is Musical.ly is officially born in August 2014. It took only a year for the new social network to positioned as # 1 in the iOS App Store and were the Most app downloaded for free in more than 30 countries, including the United States, Canada, the United Kingdom, Germany, Brazil and Japan.
In 2016, Musical.ly he had achieved the unbelievable figure of 90 million downloads and surpassed 12 million new videos per day. This growth prompted major brands like Coca-Cola to launch their #ShakeACoke campaign within the platform, which consisted of 'user-generated ads'.
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Later, the audience is through the Wall Street Journal, which had been acquired by Musical.ly Bytedance TECHNOLOGY CO. for the sum of one billion dollars, thus merging Musical.ly with TikTok and creating the American version of the social network (Musical.ly) and migrating all users to this new platform called TikTok.
Who is the owner of TikTok?
TikTok owned company based in China called Byte Dance Technology Co.. It is directed by Yimiing Zhang, an entrepreneur who owns several companies, including stand out the Chinese real estate search portal and of course Byte Dance.
The owner of this great social network is Yimiing Zhang
Zhang it has always been linked to the world of technology. I work like CTO at Kuxun managing approximately 40 engineers for the travel search engine in China, a company that would later be bought by TripAdvisor.
It is estimated that in early 2020, Zhang has a net worth of more than $ 6,8 million according to the magazine Forbes. Much of that capital is due to the growth and popularity that Byte Dance has achieved.
How many users does TikTok have right now?
Just two years after its official launch in 2016, TikTok had reached a staggering 500 million users worldwide. After four years it can be said to have exceeded 800 million active users per month in the world.
The most remarkable thing about this is not just the number of users, but that approx 150 million of these users are in China alone. It is important to point out that in this Asian market, TikTok has its own exclusive version called Douyin.
The app currently has more than 800 million active users and is expected to continue growing
This popularity has led it to become one of the most downloaded apps in recent years in the Google Play Store and the Apple App Store, reaching more than 2.000 million downloads between both platforms.
Only within this year 2020, TikTok è became the most downloaded App in the world, surpassing the 115,2 millions of downloads, obtaining an increase of 98,4% compared to the same period of the previous year.
It is estimated that the 41% current population of TikTok is made up of young people and adolescents aged between And 16 24 years. This is mainly due to its design and functionality, something that had previously been studied by the developers in choosing their target audience.
How does TikTok make money?
According to data provided by CrunchBase, TikTok can generate up to a million dollars a year. This figure is possible thanks to the platform's coins and digital gifts that users use, while monetization systems are established.
To be clear, the way TikTok earn money it's through in-app purchases related to coins. These cost from 100 coins - € 1,09 to 10.000 coins - € 104,99.
For now, TikTok makes a profit from the coins by charging the commission
These coins are used by users who consume the content and given to creators as a method of appreciation or compensation. According to reported by Sensor Tower, the users of Worldwide spend about $ 3,5 million a month for in-app purchases.
In addition, the company has preset to charge a certain commission for these types of transactions, 30% goes to the servers of the store where the application is stored, the 20% of TikTok and the remaining 50% to the content creator.
Although the annual income seems small, the truth is that TikTok is more focused on massive growth and on the extent of large masses and on the monetary gain, this can be evidenced thanks to the statistical data.
What future awaits TikTok?
At the moment, the future of TikTok is quite promising. There is no application today that can handle it in your industry. That is how Facebook it recognized its growth, it even developed Lasso, an application similar to compete with TikTok and resist, however, it is closed on 10 July 2020.
Good times coming for TikTok
Likewise, the reach and positioning of this social network is very solid, mainly among young people around the world. This is reflected through the ads promoted on Facebook, YouTube and even Google, where they can show the market focus they want to conquer.
The fact is that more and more millions of young people and users in general are joining TikTok and, thanks to its growth and consolidation in such a natural way, they can make us believe that it is unstoppable.
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