An AFP collaborator presents for a picture using the TikTok smartphone application on December 14, 2018 in Paris. TikTok, is a Chinese short form video sharing app, which has proven to be very popular this year. (Photo by – / AFP) (Photo credit must read – / AFP via Getty Images)
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TikTok has announced plans to give the creators more than $ 2 billion in the next three years as it goes head-to-head with US rivals Instagram and YouTube.
The social media video sharing app said that in a blog update on Wednesday it will give creators in the U.S. more than $ 1billion in the next three years, and more than twice that globally.
In Europe, TikTok said it will give the creators $ 70 million over the next year and at least $ 300 million within three years.
TikTok users will have to submit an application to TikTok in order to access the funding. If successful, TikTok will provide them with regular fees for posting content on its platform.
Details of the application process and how much individuals can earn have yet to be revealed.
“To continue to support our creators, we are launching the TikTok Creator Fund to encourage dreamers to use their voice and creativity to spark inspiring careers,” said Vanessa Pappas, general manager of TikTok US, in a blog post.
Pappas said the fund was set up “to help support ambitious creatures looking for opportunities to nurture livelihoods through their innovative content.”
When the blog post was first published on July 23, Pappas said the U.S. fund will start at $ 200 million.
However, in an update on Wednesday, she said: “We have seen an incredible response to the Creator Fund and we are excited to share that we expect this Fund to grow to over $ 1 billion in the United States in the next 3 years. coming, and more than double that globally. “
Owned by China’s ByteDance, TikTok has become very popular worldwide, with more than 2 billion downloads in less than four years, according to the Sensor Tower tracker app.
This success has given U.S. tech companies, namely Facebook’s Instagram and YouTube’s Alphabet owned by Alphabet, something a headache. All platforms want social media stars with millions of fans to appear on their apps because it helps them boost their user numbers and generate more revenue.
“Access to direct monetization paths keeps the best creative on TikTok, and can also attract new creatures from a growing raft of competitors,” said Michael Norris, manager of research and strategy at the based consultancy. in Shanghai AgencyChina.
When bidding to compete more directly with TikTok, Instagram is expected to launch a new feature called Reels, which is due out in the U.S. in early August after being tested in India, Brazil, France, and the United States. Germany.
“TikTok is keenly aware of how many competitors are spinning, looking to block user time and amazing creative talent – especially Instagram Reels and Triller,” Norris told CNBC.
Facebook has made lucrative offers to high-profile TikTok influencers with millions of followers to attract to Instagram Reels, according to a report from The Wall Street Journal on Tuesday. In some cases, Instagram has been offering hundreds of thousands of dollars to convince TikTok creators to use Reels, the report said, citing people familiar with the issue. CNBC could not independently verify these claims.
TikTok’s links with China are becoming problematic for the company, with countries raising concerns about the possibility of passing TikTok user data to the Chinese-led Communist Party. TikTok has repeatedly said he does not and will not do so.
However, it has been banned in India and President Donald Trump said Wednesday that his administration is considering a ban as well.
In an effort to uncover the issue, TikTok tried to get away from ByteDance by hiring a U.S. chief executive in the form of Kevin Mayer, Disney’s former streaming head. He has set up local offices around the world and is currently deciding where to place new headquarters, with London, Los Angeles, New York, Singapore and Dublin all possible contenders.
As a last resort, ByteDance is also considering selling TikTok’s stake to U.S. investors. ByteDance investors reported valuing the app at about $ 50 billion.