Reward revenue exceeds 10 billion U.S. dollars. Why does TikTok attract as much money as “Honor of Kings”?

TikTok is probably the app that most makes overseas friends "disrespectful of their integrity".

In the official tone, it is like a scourge, which makes teenagers lose their minds as a plaything. The CEO was even dragged to Congress for questioning. But what really determines TikTok’s status and makes it a major concern for Zuckerberg are those who actually use the app.

As the international version of Douyin, TikTok's popularity route is very different from that in China. The cultural environment is completely different at home and abroad. It has reached a consensus on immersive full-screen short videos, unstoppable finger swiping, and brainwashing divine songs.

Another recent survey found that foreigners also love to buy gifts in live broadcast rooms, spending 10 billion US dollars in 7 years.

The ability to attract money is comparable to that of King of Glory, making tipping a good habit

According to statistics from the data platform data.ai, TikTok has reached a milestone: it is the first non-game app to generate a total of US$10 billion in "in-app purchases" in the Apple App Store and Google Play.

"In-app purchase" is referred to as in-app purchase, which refers to spending money to purchase additional services within the app, such as VIP removal of advertisements in video apps and virtual props in game apps.

TikTok's "in-app purchases" mainly come from users' tips in the live broadcast room. When the anchor cashes out the virtual gifts, TikTok gets a 50% share.

Data.ai's data starts from 2016, including TikTok's iOS and Google Play terminals, as well as Douyin's iOS terminal. Therefore, Douyin’s Android market is excluded, and the real revenue should be more.

There are currently only five apps that have reached 10 billion. Except for TikTok, the other four are popular mobile games, including "Candy Crush", "Honor of Kings", "Monster Balls" and "Clash of Clans".

It can be seen how fierce the live streaming rewards on TikTok and Douyin are.

Data.ai said that U.S. users and Chinese iOS users are the main contributors to tipping, each bringing in about 30% of the revenue. In addition to the two tied for first place, top rankings include Saudi Arabia, Germany, the United Kingdom and Japan, which together account for 13%.

Domestic live broadcast rewards are more common with "big brothers", but we may not have thought that foreign friends also love to watch live broadcasts so much, and are so generous that they can hold up the other half of the sky.

What are they watching on TikTok?

I use my new account that has not been cleaned by the algorithm to watch live broadcasts. Playing games, astrology and fortune telling, good-looking anchors singing and dancing, and selling jewelry and jade that have been named by 315, the probability of appearing is relatively high.

In addition, there are also many "slow live broadcasts" that focus on daily style and companionship. Chefs fry meat, artists paint, fast food restaurant employees serve meals, workshop workers assemble products, and manicurists repair nails… There may have been more than a dozen broadcasts when you clicked in. Hour.

Not to mention, the sizzling sound of barbecue, combined with the soothing background music and the anchor's unhurried movements, do have some healing effects. This type of live broadcast is also common in China. Some southern roadside stalls will live broadcast while frying noodles on the street.

At the same time, TikTok live broadcasts also have some special styles, which emphasize interaction and attract "viewers" to send gifts.

In 2022, Australian TikTok creator Jakey Boehm live-streamed his sleep from 11 pm to 6 am, earning $34,000 in a month, ranking among the top 50 on TikTok.

There is no technical content in just lying down to sleep. Boehm's innovation is to gamify sleep. He decorated the room, wrote scripts, customized various wake-up services, and just waited for the audience to send gifts. Gifts of different prices trigger different effects. Prices range from 50 cents to $600.

When the live broadcast room is most lively, there are as many as 8,000 viewers, and there is a wake-up call every 10 to 20 seconds, turning on the lights, playing music, and starting the inflatable device… Boehm not only has a creative mind, but also has vivid on-the-spot reactions. He understands that what the audience wants to see is the collapse and anger of being unable to sleep.

After this form became popular, many imitators appeared. "Disturbing sleep" and "disturbing work" have become popular live broadcast routines on TikTok.

There is no road on the ground. When more people walk, it becomes a road, and there are also people who open up another road. In July this year, PinkyDoll, a streamer in Montreal, Canada, became popular because of her NPC (non-player character in the game) style.

The anchor pretended to be an NPC with preset rules. When the live broadcast room gave out gifts, she gave a reaction, stared at the camera, and repeated lines like "The ice cream is delicious" like a robot. It was a real person performance. "Uncanny Valley" sense of déjà vu, live broadcast for 1 to 2 hours, you can earn 3,000 US dollars.

It turns out that netizens at home and abroad are sometimes quite plain and boring. With the same curiosity and need for similar emotional value, the anchors try to figure out the common desires, set up various fresh and temporary gimmicks, and try all the things that attract attention. Leave a message to passersby and leave their comments and gifts.

TikTok has also seen the rise of 24-hour live streaming in recent months. The anchor's camera is pointed at every room in the house. Life is often as dull as ours, but there are many people watching the live broadcast in the live broadcast room.

Voluntarily living in "The Truman Show" may be difficult for people to understand, but it is also a kind of gimmick. They have the opportunity to receive gifts every minute and can earn 5,000 or even 50,000 US dollars per week.

Kieran, a reporter from technology media Insider, once forced himself to watch TikTok live broadcast for an entire night. After the experiment, he had mixed feelings. His high emotional intelligence meant that the experience itself was interesting, while his low emotional intelligence meant that he had witnessed the diversity of human beings.

In fact, regardless of the question of "this can actually make money", TikTok live broadcast is a non-stop online carnival, and there are always people who are famous and make money for 15 minutes.

Turn content into products and teach Zuckerberg a lesson

Not only live streaming, TikTok has already dominated the Internet life of young foreign netizens.

The so-called geopolitics and data security are uncontrollable factors in the development of TikTok. In March this year, TikTok CEO Zhou Shouzi was questioned by the US Congress for 5 hours, and the voice of banning TikTok has never stopped.

However, a Pew Research Center survey this fall showed that the proportion of Americans who support the ban has declined. Adults under the age of 30 and teenagers between the ages of 13 and 17 have a lukewarm attitude towards the ban, and even oppose it more than they support it.

Politics is politics, and entertainment is entertainment. Reports on TikTok have sprung up like snowflakes, giving it various names.

TikTok is becoming the search engine of Generation Z. They search for restaurants, movies, and travel guides on it because the content is easier and more interesting. TikTok cannot replace Google, but it has affected Google.

▲ Tiffany’s advertisement.

TikTok is becoming a new shopping channel, where live broadcasts of goods are common in China, ranging from clothes to fitness equipment, from toys to coffee cups. The Guardian pointed out that most British people placing orders on live broadcasts are between the ages of 19 and 35.

TikTok is becoming the new music software, and popular songs here often appear on Spotify Viral 50 and Billboard Hot 100. On December 10, TikTok held its first live music event "TikTok In The Mix" and launched it online For live broadcast, the four large screens are all vertical in shape, like giant smartphones.

▲ Singer Niall Horan on TikTok In The Mix.

TikTok is also becoming TV for young people. In November, the satirical short film "Cobell Energy" produced by Oscar-winning director Adam McKay's studio was launched on TikTok, Instagram and YouTube. It is in vertical screen format and is updated weekly. Each episode is only one to four minutes long, making it a popular short video platform. Customized.

▲"Cobell Energy".

Traditional Hollywood producers "join if they can't beat it", and young audiences are indeed consuming more and more content on TikTok. In addition to short dramas, old dramas such as "Grey's Anatomy" have also been cut into fragments and distributed on TikTok. Strictly speaking, this is piracy, but it is very popular.

The Pew Research Center sums it up succinctly:

TikTok is becoming a one-stop content shop like never before.

Now, TikTok has taught social apps in Silicon Valley another good lesson, proving that in addition to advertising and e-commerce, tipping is also very profitable.

US$10 billion in rewards over 7 years is actually not a lot, and the giant’s advertising business has easily accomplished several small goals. In the second quarter of this year alone, Meta's advertising revenue reached US$31.5 billion, accounting for 98.4%.

But this also shows that the money earned from "in-app purchases" is too little.

"Forbes" reported in March this year that Meta's in-app purchase revenue in 2022 was only $56 million. TikTok’s in-app purchase revenue is $205 million more than Facebook, X, Snap and Instagram combined.

For these social apps, in-app purchases were originally like a rounded fraction, but with TikTok setting an example and Apple changing its privacy policy to crack down on personalized ads, in-app purchases that allow users to pay directly are becoming more and more important.

Therefore, social apps are doing their best to either package subscription plans and launch more VIP functions, or, similar to TikTok, improve the reward mechanism and encourage users to directly give more "tips" to creators.

In November last year, Meta began testing Instagram’s “gift” function. Fans can spend money to buy “stars” and reward content on the short video function Reels.

In September this year, the "US version of Tieba" Reddit also launched a similar update. Posts and comments that meet the requirements can receive virtual gifts "gold coins". The starting price is $1.99 to purchase 1 gold coin. Creators can use 1 gold coin to withdraw 90 cents or For $1, relevant content will also be highlighted.

In fact, "rewarding" is not new overseas. YouTube has Super Chats (super messages) and Super Thanks (super thanks), with the creator and the platform sharing a 70/70 share. Twitch also has a virtual currency called "Coins."

But TikTok brings tipping to short videos that are more flexible and more often viewed on mobile phones, and we are always ready to slide to the next video.

Unlike YouTube where you pay for long-form content, and unlike Twitch, which is rooted in fan groups and watch anchors play games for hours in situ, TikTok rewards may be based on curiosity, such as disturbing the anchor's sleep.

To a certain extent, when TikTok gives rewards, users have also become a part of the live broadcast. We are paying the anchors to complete their performances, and their performances are only possible because of the audience.

This is different from the logic of other platforms and realizes the concept of "mobile monetization" proposed by data.ai.

Falling into the black hole of time, paying for "little luck"

"Mobile monetization" sounds a bit mysterious, but it is actually paying for our attention.

The attention economy believes that attention is a resource, and everyone's attention is limited, forming a price relationship between limited resources and unlimited desires.

The phrase "time is money" that encourages people not to lie flat has another explanation here. When we spend more time on TikTok, we are paying for its content in disguise.

TikTok is like a black hole in time, eating the world. Last year, data analysis platform Sensor Tower reported that TikTok users spent an average of 96 minutes on the app every day, almost five times as much as they spent on Snapchat, three times as much as Twitter, and twice as much as Facebook and Instagram.

Whether it’s time or money spent here, the barriers to entry are low.

The reward itself is not expensive. If you buy TikTok's "gold coins" on the website, 70 "gold coins" only cost $0.74, and 1 "gold coin" can give you a "rose".

Watching short videos does not require a lot of "cultural energy". It is suitable for workers who have no energy to read, watch movies and play games after work. It is like cold beer and potato chips after high-intensity physical work in "Gambling Revelations".

In this way, everyone may send a cartoon rose that will soon disappear from the screen.

Marketing company Ubiquitous believes that the low price of rewards attracts users who are originally unwilling to pay for content, and promotes "micro-transactions" that are spent and forgotten, just like millions of cheap mobile games, where users only I feel like I gained instant happiness from it.

Is it possible that TikTok itself is a lot like a game? The mainstream in-app purchase model for non-game apps is subscription, such as X’s “Blue V”, but TikTok takes an unusual approach. Like games, it focuses on “one-time purchases”, but one is a virtual gift with different prices, and the other is 648 Yuan’s krypton gold gift package.

In addition to live broadcasts, TikTok is also redefining the possibility of content monetization.

Although not as common as live streaming rewards, starting from December 2021, TikTok and Douyin have begun to promote short video rewards, turning more content directly into commodities.

Recently, Douyin has been reported to be testing a payment model for short dramas, starting from as low as 1 yuan per episode. Although paid short dramas have been explored in 2020, the wind is blowing particularly fiercely this year. Overseas netizens are also fascinated by boss, werewolf, and vampire short dramas. By analogy to TikTok, whether it is single-episode payment or advertising monetization, the business model should also have a lot of room for imagination.

In order to expand the impact of its marketing business, TikTok once told brands:

Don’t make ads, make TikTok.

This is the most subtle comment on TikTok content, not only for brand marketing content.

Live broadcasts, advertisements, short plays, or ordinary short videos have all become the building blocks of the TikTok building. Creators do whatever they can to attract attention, while passing viewers sell their time or tip real money. Everything above, in a simpler, more entertaining way, is more likely to become a commodity.

It is as sharp as autumn frost and can ward off evil disasters. Work email: [email protected]

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