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I would like to know how does the company tiktok make or earn money?

They're not showing any ads, but their users are increasing and their video upload rate is increasing.

Even they have 500 million monthly active users

Also I saw they send t-shirts to more active account owners.

How do they manage the cost of it?

closed as off-topic by Dheer, Fattie, Chris W. Rea, Bob Baerker, Grade 'Eh' Bacon Nov 20 '18 at 13:30

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    "There not showing any ads" ... yet ;-) – Mawg Nov 20 '18 at 8:43
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    Chinese company with access to 500 millions people data. Hoe does they make money? Hey, you wanna buy dome data? – SZCZERZO KŁY Nov 20 '18 at 10:57
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    I'm voting to close this question as off-topic because spam – Fattie Nov 20 '18 at 11:40
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    Also how is this personal finance ? – Fattie Nov 20 '18 at 11:41
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    I'm voting to close this question as off-topic because it is not about personal finance. – Chris W. Rea Nov 20 '18 at 12:04
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First off you need to consider startups aggressively subsidize their offer early on in order to capture market share. Popular examples of startups valued at billions of $ that were/are in the red include household names like Uber & Spotify that bled money for years on end. Also, take note social media platforms aim for the network effect and its a crucial aspect of their success or demise (see myspace among a myriad more) so market share becomes all the more crucial in this case.

It is, of course, possible to monetize their user base through ads in the future(as in IG/FB) or enable premium features(as in Spotify/Tinder) but I think this goes beyond just that.

It may sound cliche nowadays but when you don't know what the product is then it most likely is you. Don't forget who owns TikTok, ByteDance which may sound like a random name to a westerner but its a huge Chinese media company with immense success harnessing their user's data through operating several machine learning-enabled content platforms.

It also may be the case they don't intend to make any money off it in the first place, rather use it as a foot on the door to get into the western world where they can leverage their hard-earned expertise globally for bigger and better ventures and what better way to do this by getting into an app primarily aimed to an US-based teenager demographic(one of the best consumer audience group possibly imaginable).

2

Many companies offer free services to individuals, but charge corporate users for support (example: Red Hat Linux). Could it be that?

Otherwise, it is fairly common practise to offer free services to build a critical amass of users. Once acquired, you can start charging them, although you will probably lose many users. Or, you could introduce premium services, after having let them use the free stuff for long enough to get hooked. Or, even just start advertising.

Another alternative is to grow something so big and attractive that it is bought out by Google, FaceBook, Amazon, Twitter, etc. I remember 20 years ago, when Microsoft paid two college kids over $400 million to buy Hotmail.

In short, we can’t really know what they plan unless they say so publicly. Did you Google? Maybe there is something in the trade press? Failing that, all you can do is wait and see what happens.


[Update] And don't forget - if you are not paying for a service, then you are the product. No doubt they collect - and sell - lots of user data.

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    TikTok is a social media video app so I dont think RHEL's use case applies tho this by any means. Agreed on the 2nd paragraph but the 3rd one seems off, in fact, Bytedance shelled out 1b$ to buy musical.ly (to be integrated into TikTok) in the first place. If anything they want to be as big as the companies you mentioned not sell to them. – Leon Nov 20 '18 at 9:34
  • Thanks for the feedback. As the OP did not bother to link to TikTok, I did not bother to Google :-/ and just gave a generic answer. Sounds like they are aiming to be the enxt YouTube? If so, I would expect the marketing model to be the same. – Mawg Nov 20 '18 at 9:55
  • And don't forget - if you are not paying for a service, then you are the product. No doubt they collect - and sell - lots of user data. – Mawg Nov 20 '18 at 9:56
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    No worries. Imo Bytedance aims to become Google in that youtube analogy, not just a mere single platform(Youtube). I covered that in my answer also, they re a machine learning focus media platform provider for a 1bn people market(Chinese one) so yeah it only makes sense to use that data for profit among other things. – Leon Nov 20 '18 at 10:14
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    I think I will fold that last part into my answer (and upvote your answer ;-) – Mawg Nov 20 '18 at 10:16

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