Pay Up

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— Hannah Doyle

Is TikTok Paying Its Creators Enough?

Education creator Hank Green took to YouTube last week to express his concerns with the way TikTok pays its creators. 

The problem, as Green explains it, is that the platform’s Creator Fund consists of a fixed amount of money, which doesn’t change despite the growing number of creators who are drawing from it. "When TikTok makes more, creators make less,” Green said. “The slogan writes itself."

Unlike YouTube or Facebook, which split a percentage of ad revenue with qualifying users, TikTok doesn't share ad dollars with creators. Instead, it has several built-in monetization tools like virtual "gifts," as well as a Creator Fund to pay users with at least 10,000 followers and 100,000 views in a 30-day period for their videos. 

By the Numbers

$200 million → how much TikTok allotted for its US creator fund in 2020.

$10 billion → how much money YouTube distributed to creators in the same year.

$1 billion → how much Facebook pledged to pay creators from 2021 through the end of 2022.

Green used to make 5.5 cents per 1000 views on TikTok, and due to the growing number of Creator Fund users, he now makes 2.7 cents per 1000 views. His transparency prompted a number of other creators to share how much they’ve received from the fund. Safwan Ahmedmia made about $127 since April 2021, and MrBeast earned $14,911 over nearly two years.

The solution, according to Green, is that the creator fund should be much bigger and based on a percentage of revenue.

Our Take

YouTube is an anomaly for how much it pays creators, which has made it the strongest platform in the creator economy and a magnet for talent. TikTok has the opportunity to find an incentive for creators to stay, and if they don’t take it, they may risk losing their cultural stronghold.

From Six Figures to Broke

In a recent video, longtime YouTuber Luke Korns shared that his finances have dwindled to almost nothing.

Korns started making comedy videos when he was 12, and steadily evolved to lifestyle content, growing his channel to nearly one million subscribers at age 19. By then he was making six figures—getting multiple five-figure deals a quarter, and income from merch, AdSense, and live appearances. 

“I quickly went from being a broke teen to a 19-year-old making six figures a year, and nobody was guiding me on how to manage that money.”

When he was 22, the pandemic hit, derailing his plans to switch his content to travel documentaries. 

He chose to wait it out, going dark on his channel for a year and a half. Meanwhile, his expenses remained unchanged. Between a $6,000/month LA apartment, car payment, and insurance, he slowly ran out of money. 

With only a few thousand dollars left to his name in August 2021, he sold his apartment and car, put his things in storage, and set out to do what he’d intended 18 months prior.

“After over a decade of YouTube, I’m finally making content that means something to me,” Korns said, “and unfortunately the consequences of my actions hit me head-on; quite simply, the views are not what they used to be.”

Our Take

Not uploading is, as Korns puts it, YouTube channel suicide. His story is a cautionary tale, showing how important consistency is, as well as financial education in the creator space. There’s an opportunity here for companies to guide creators on how to save, invest, and diversify funds—so when the time comes for a production break (on purpose or otherwise) there are safety nets in place.

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Vine Star and Student Athlete Quits Competing to Focus on Business

Former Vine creator and student athlete Sae Alcorn announced his retirement from track and field at University of Kansas to focus on business full-time. 

Since the NCAA passed its name, image, and likeness (NIL) law in July 2021, Alcorn has garnered brand deals from Current and EatStreet, and started a vintage clothing brand with his brother.

Our Take

In the era of NIL, a student athlete can grow a business that has a high likelihood of lasting longer than their personal sports career. Expect to see more moves like this in the future, as NIL approaches one year of being in effect.

🔥 Press Worthy

• Elle Mills drops the trailer for “Reply”, her movie directorial debut.

• Twitter rolls out NFT profile photos for Blue subscribers.

• TikTok is testing paid subscriptions.

• Faze Clan is looking for a new member, with a $1 million crypto pay-out.

• Cocomelon, the second most-subscribed YouTube channel, is launching a podcast on Spotify.

• YouTube shares its 2022 priorities.