TikTok, the short video-sharing platform, has turned its success into a money-making machine after gaining massive popularity over the last two years. TikTok’s revenue growth has propelled it past other established social media behemoths.
According to data compiled by Finbold on October 27, TikTok generated $2.5 million per day in September 2022 via in-app purchases and subscriptions (excluding advertising) on Android and iPhone devices worldwide, excluding the iPad. The value equates to approximately $104.000 in hourly revenue. The social media platform earned $75.8 million in total revenue during the month.
Notably, TikTok had the highest revenue among social media platforms, with the google Play Store value standing at $35.14 million, trailing only the dating app Tinder, which had $37.58 million. TikTok revenue on the Apple App Store was $40.66 million, trailing the gaming app Coin Mater, which had $47.96 million.
TikTok’s revenue generation strategy
TikTok’s growth has given birth to a cultural economy comprised of influencers and marketing agencies devoted to the platform, with the initiatives central to the app’s impressive revenue in a highly competitive social media scene. TikTok has maintained a competitive advantage due its main selling point of build-in recording and editing capabilities. The features allow content creators to quickly record, edit, and share videos.
Furthermore, after initially being skeptical of TikTok, advertisers are increasingly embracing the app in order to tap into the app’s global user base, which is aided by a flexible business model. Advertisers can engage with influencers who fit their target market through the creator marketplace in this line. TikTok has evolved in general, with advertisers making the app an important part of their media strategy and budget.
TikTok’s success can also be attributed to its model of recommending short videos based on algorithm. The app recommends content based on a user’s interest, keeping them engaged for extended period of time, while the shorter videos allow users to access more content in less time.
TikTok’s revenue can also be attributed to the company’s recent initiative aimed at increasing income from user-generated videos. Indeed, TikTok executives launched a new automated system that acts as a matchmaker, connecting advertisers and content creators in exchange for increase revenue opportunities for TikTok.
TikTok also outperforms gaming apps, which have a historically brought in more revenue across all app categories, according to a revenue analysis. As a result, its its not surprising that TikTok is attempting to break into the gaming industry. According to a previous report, the company conducted tests in which users could play games within the app. The test was initially conducted in Vietnam, with the company hoping to increase revenue if the feature is approved and implemented globally.
TikTok dethrones established social media behemoths
Without a doubt, TikTok has encroached significantly on the territory of leading social media platforms operated by Meta (NASDAQ:META) and Alphabet (NASSDAQ:GOOGL), with Facebook, Instagram, and YouTube suffering the most. TikTok, for example, hostsb celebrities with large followings and who uses it to communicate with their fans. As a result, the fanbase has shifted from Facebook and Instagram to TikTok.
Simultaneously, Meta, which owns both Facebook and Instagram, is learning from TikTok’s success in order to resurrect growth. In this regard, Meta has increasingly targeted younger audiences. By aggressively pushing users to Reels and heavily promoting videos in feeds. The strategy builds on Facebook’s history of cloning popular social media apps deemed competent. In addition, YouTube Shorts is being promoted to attract users who are not interested in long-form videos.
Overall, TikTok’s ability to generate substantial revenue at the expense of other established social media platforms is admirable. In this case, social media companies are contending with prevailing macroeconomic factors that are expected to have an impact on generated revenues as a result of the TikTok competition. Analysts also predicts that slowed revenue growth and competition from TikTok will exacerbate the woes of most social media behemoths.
Main Image: Forbes
