TikTok grosses $75M from virtual currency sales
- Social video app TikTok boosted sales of its virtual currency by about 243% to $5.5 million last month from a year earlier, according to app researcher Sensor Tower. People use the in-app coins to reward their favorite video creators, who can exchange the coins for digital gifts.
- TikTok has grossed $75 million from the sale of virtual currency, Sensor Tower estimated. The figure includes global spending through Apple's App Store and Google Play, but not revenue from China's third-party Android stores.
- China's iOS users represent about 23% of the total, or approximately $17.3 million, making the country the second-biggest market for in-app spending. U.S. TikTok users have spent about $41.3 million in the app, or 55% of the global total. TikTok sells the digital coins in bundles, such as 100 coins for $0.99 or 500 coins for $4.99.
"Tipping" content creators with virtual currency is one way audiences can show their appreciation for content creators on social media and livestreaming platforms. Tipping helps to support creators and gives them greater incentive to produce high-quality content that compels audiences to return to platforms like TikTok.
However, TikTok doesn't advertise its digital coins or explain how to use them, as Sensor Tower notes. The lack of promotion may explain why parent company ByteDance is grossing just $5.5 million a month on sales of virtual currency to TikTok's massive audience of 1 billion users.
Currently, the streaming platform appears to be more focused on selling ads than on virtual currency sales, as ByteDance takes steps to monetize the user-generated content (UGC) that millions of people post to the video-sharing platform. TikTok last month began testing sponsored videos that direct users to an advertiser's website. A month earlier, ByteDance started to experiment with advertising in the U.S. and U.K.
When it comes to tipping with real money, Chinese apps have been more accepting of such payments among content creators and their audiences. Chinese livestreaming video apps such as Yinke and Yizhibo have let viewers tip or give virtual gifts to creators in exchange for a shoutout or simply to show gratitude, per TechCrunch. Apple two years ago allowed digital tipping in the App Store, which classified the payments as in-app purchases and made them subject to a 30% fee, opening up an additional revenue stream.