TikTok is launching a subscription service for live videos to incentivize creators to produce more on the channel.

How will it work?

The product is aimed at users over 18 with at least 1,000 followers, although initially it's only by invite. They will be able to ask fans to pay, probably something around $5 a month, to get some exclusive functionality – for instance, to be able to comment on live videos; get a special badge to display next to their profile name; or to send customized images, known as emotes, to a creator. Unlike other platforms, creators can't limit their content to paying subscribers – everyone will be able to see it.

Why has TikTok done this?

The big social media platforms are judged on daily active users – people who are using their platforms on any particular day. There is a real battle between them to keep growing, as many markets have hit saturation point.

Meta – the owner of Facebook, WhatsApp and Instagram – and Alphabet, which owns YouTube, have traditionally dominated the space but during pandemic-induced lockdowns, video-sharing app TikTok experienced enormous growth and is now a serious threat to both.

How has the social media landscape evolved?

The original model of the first social media platforms was for their users to be both creators and consumers of content. The platforms would then charge advertisers to place their promotions into the mix. However, as competition grew, certain creators, who would become known as influencers, started to attract ever-increasing amounts of attention and social media companies started to seek ways to incentivize them to produce more content on their platforms so their fans would return more frequently.

How do you make money on social media?

To generate serious income you need to have a large number of followers – most monetization offerings are only available once you reach a certain threshold. Having engaged followers who like or share your content is more valuable. Once you reach this stage, there are various options:

– Sell merchandise: Even before the platforms started offering incentives to creators, many had figured out that they could sell branded products, for instance vitamin pills, to their large and adoring audiences. Nowadays some sites will help you create your own branded items like mugs and T-shirts.

– Advertising: Most social media companies will offer a share in the advertising from videos to the creator producing them. At very high volumes, the sums can become significant.

– Gifts: Creators can ask their fans to send them virtual gifts, which are exchangeable for cash. Of course, the social media companies take a cut.

– Subscription: More consistent than the other monetization options, subscriptions can generate significant sums from a relative small number of fans, as long as they are passionate enough to pay.

– Sponsored posts: For most influencers, the biggest source of income comes from partnerships with brands to promote their products. The cost can range from a few hundred dollars per post to more than a million for the biggest global stars like singer Beyonce or footballer Ronaldo.

However, while a few have become millionaires many times over, relatively few creators make enough money to live off their social media presence.