TikTok is a popular short-form video app that has over 1 billion monthly active users globally. In 2020, TikTok announced a $2 billion creator fund to support and reward creators on the platform for the content they produce.
The TikTok creator fund provides creators an opportunity to earn money for views, engagements, and overall performance on their videos. When TikTok first introduced the creator fund, they committed to distributing $200 million to U.S. creators alone over the first year.
The $2 billion creator fund was seen as TikTok’s way of investing in and incentivizing creators to continue producing high-quality content on the platform. It aimed to compete with other platforms like YouTube that offer monetization programs for creators.
Now after nearly 3 years, some speculation has emerged questioning whether TikTok plans to continue the creator fund. But TikTok has stated they remain committed to supporting creators through initiatives like the creator fund.
Recent Speculation
There have been recent rumors and reports suggesting that TikTok may be ending its $2 billion Creator Fund. In late November 2022, Fortune reported that “TikTok is winding down its $2 billion Creator Fund” and that the fund “will cease doling out cash to creators starting in 2023” (Source). This news came shortly after Time published an article stating that “TikTok Is Shutting Down its $2 Billion Creator Fund” and that the fund “will end in December” (Source). While unconfirmed by TikTok, these reports from major publications have sparked speculation that the lucrative creator fund may be discontinued.
TikTok’s Response
TikTok has officially responded to the speculation, confirming plans to evolve its Creator Fund but emphasizing that it is not going away. In a statement to Fortune, a TikTok spokesperson said the $2 billion fund “will continue to be an important part of our broader creator monetization ecosystem.” While the current U.S. Creator Fund introduced in 2020 will stop accepting new applications after December 16th, TikTok stated it is working on the next iteration of the fund to “deliver even more value to creators.”
Reasons for Speculation
There is speculation that TikTok may be ending its $2 billion creator fund based on some concerning signs and unconfirmed reports. According to an article by Time, the creator fund was originally intended to last only 3 years, which would end in December 2023 (1). Additionally, some top creators claim their monthly payments have decreased recently without explanation (2). There are also rumors that TikTok plans to implement a revenue sharing program instead, although details are unclear. Overall, these factors have led to speculation that TikTok may be phasing out its creator fund in favor of other monetization models. However, the company has not yet made any official announcement confirming this.
Impact on Creators
The potential ending of TikTok’s Creator Fund could significantly impact creators on the platform who rely on payouts from the fund as a source of income. Many creators have built their careers and livelihoods around creating TikTok videos and leveraging the Creator Fund as a key way to earn money.
Since launching in 2020, the Creator Fund has distributed over $2.3 billion to creators as a way to support and reward them for the content they produce (Time). While TikTok has not provided specifics on payout amounts, some top creators have reported earning thousands of dollars per month from the fund.
Without the consistent payouts from the Creator Fund, many creators may struggle financially and have to seek alternative ways to monetize. This could involve pushing fans to tip through third-party services, selling merchandise, or moving to other platforms with monetization funds. The potential loss of income may also discourage some creators from producing as much content.
Overall, the sunsetting of the Creator Fund takes away a core monetization method that many TikTok creators have come to depend on. Moving forward, creators will need to reevaluate their business models and find new revenue streams if TikTok removes its dedicated creator fund.
TikTok’s Incentives
TikTok launched its $2 billion Creator Fund in July 2020 as a way to support and incentivize creators on its platform amid rising competition with other social media platforms like Instagram and YouTube. As reported by CNBC, TikTok stated the fund would “help support ambitious creators who are seeking opportunities to foster a livelihood through their innovative content.”
The fund was part of TikTok’s larger creator monetization efforts, providing qualifying creators with cash payments based on the engagement and views on their videos. According to TikTok, the goal was to “have a meaningful impact on the lives of creators” while also attracting more talent to the platform.
Even with the Creator Fund ending, TikTok has indicated it will continue exploring ways to provide monetization opportunities for its creators. This includes features like tipping, ecommerce, and its Creator Marketplace, which helps brands connect with influencers. TikTok remains highly motivated to keep creators active and engaged on its platform amid ongoing competition.
Future of Monetization
If TikTok were to end its Creator Fund, creators would still have options to monetize their content. TikTok offers opportunities like its TikTok LIVE Creator Fund and brand partnerships that allow creators to earn money.
TikTok LIVE allows creators to go live and engage with their audience in real time. Fans can send virtual gifts during livestreams, providing another revenue stream for creators. The TikTok LIVE Creator Fund compensates creators for the LIVE videos based on factors like average views and engagement.
Brand sponsorships are a popular monetization method, allowing creators to partner with brands to promote products or services. Brands are eager to leverage influencers on TikTok to reach wider audiences. Even without the main Creator Fund, brand sponsorships give creators a way to monetize their loyal follower base.
TikTok also provides options like tipping and its Creator Marketplace that connect creators with brands for paid partnerships. While not as lucrative as the Creator Fund for some, these present alternative paths to earn money from TikTok without relying solely on the main fund.
Perspectives from Creators
The potential end of TikTok’s Creator Fund has elicited mixed reactions from top creators on the platform.
Popular TikToker Charli D’Amelio, who was the first to reach 100 million followers on the app, told TIME, “The Creator Fund has allowed me to dedicate more time to creating content and connecting with my fans on TikTok. If it goes away, it’ll definitely impact how much content I’m able to produce.”
Comedian Brittany Broski, known for her viral kombucha reaction video, said to CBS News, “I’m worried ending the Fund means TikTok doesn’t value creators as much. We helped make the app what it is today.”
Lifestyle influencer Remi Cruz commented that the Fund has been an “amazing opportunity” but she’s hopeful TikTok will find other ways to support creators moving forward.
Precedents from Other Platforms
TikTok would not be the first platform to end a creator fund or monetization incentive program. In the past, other major social media and video platforms have also discontinued similar funds or creator monetization programs:
Facebook previously offered a bonus program for live streamers called the Facebook Gaming Creator Bonus program. This program provided qualified streamers with a bonus based on hours streamed. However, Facebook ended this bonus program in 2021 after about a year and chose to focus on other monetization tools for creators.
YouTube had an initiative called the YouTube Partner Program Community which provided qualified creators a bonus for hitting certain milestones. YouTube ended this bonus program in 2020 after a few years and pointed creators towards wider monetization opportunities on the platform.
Snapchat had a similar Creator Fund that provided cash bonuses to creators. However, Snapchat ended its version of the fund in 2021 to focus more on developing augmented reality tools for creators.
The precedent from these other platforms shows that ending a dedicated creator fund is not uncommon as platforms adjust their creator monetization strategies over time.
Conclusion
In summary, while TikTok has not officially confirmed ending its Creator Fund, speculation has arisen due to the December 16th cutoff date approaching. The $2 billion fund was launched in 2020 to incentivize creators to produce original content and help monetize their videos on the platform. However, some critics felt the fund was not sustainably meeting creator needs. The potential loss of additional monetization has sparked concerns among creators who rely heavily on the fund for income.
Nonetheless, TikTok seems committed to exploring new forms of creator monetization, like tipping, subscriptions, licensed content, and branded content deals. They may be shifting their model from direct payouts to empowering creators to monetize independently. This would follow precedents set by platforms like YouTube, Instagram and Snapchat. While the future remains unclear, TikTok will likely continue experimenting with monetization models to attract and retain top talent, while giving creative entrepreneurs meaningful ways to earn money from their content.
