Micro-video Platform TikTok Starts $200 Million Creator Fund

And signs multi-year deal with National Music Publishers Association to pay publishers and songwriters to license their work

Micro-video platform TikTok is learning to play nicely with creators by supporting their work financially in new ways. The Bytedance-owned company, based in Beijing, China, announced the changes last Thursday. First, the company started a $200 million TikTok Creator Fund to support their work and, second, the platform signed a multi-year deal with the National Music Publishers’ Association (NMPA), reports Tubefilter.

$200 Million TikTok Creator Fund

The company started the TikTok Creator Fund with $200 million to support the work of creators, particularly those who are ambitious and want to turn their content into careers. Starting in August, U.S. creators who are 18 years of age or older can apply. To be eligible, the creators must consistently post original content in line with TikTok’s Community Guidelines. The fund will be distributed over the coming year, and TikTok expects that fund to grow over time. It does not specify how funds will be distributed or give specifics about when or how much.

“TikTok is a platform rooted in creativity. While the past few months have been challenging for many, we’ve been awed by the outpouring of empathy, humor, and truly uplifting content from our users. We love seeing community form on TikTok in uniquely expressive ways. The growth of relatable content, and the entertaining and refreshing experience on the app, is a direct testament to the spirit and creativity of our talented creators,” said Vanessa Pappas, general manager for TikTok U.S.

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“Through the TikTok Creator Fund, our creators will be able to realize additional earnings that help reward the care and dedication they put into creatively connecting with an audience that’s inspired by their ideas,” Pappas added. “In a relatively short time, TikTok has grown to become a source of income and opportunity for creators and their families – and we couldn’t be more encouraged by their success. As our community continues to flourish, we’re committed to fostering even more ways for our creators to earn livelihoods by inspiring joy and creativity.”

The new creator fund is in addition to other monetization opportunities for creators on TikTok. In May, for example, the company established a $50 million Creative Learning Fund that has paid approximately 1,000 U.S. creators to develop educational content in a #LearnOnTikTok campaign. Among the recipients are Bill Nye, Jose Andres, Lilly Singh, Neil deGrasse Tyson and Tyra Banks.

Multi-year deal with National Music Publishers Association

Also last Thursday, TikTok announced it had signed a multi-year deal with the National Music Publishers Association (NMPA), retroactive to May 1, 2020, says Variety. TikTok videos often feature music from American music publishers and songwriters but, up until now, have not been compensated for their work. In this new partnership, members of NMPA can opt-in to have their work included.

In a statement, Ole Obermann, global head of music at TikTok, said:

“TikTok is proud to partner with music publishers and songwriters to enable artist and song discovery, and support revenue opportunities. We’re excited to partner with the NMPA to bring their member companies on to the platform and help hundreds of millions of people discover and enjoy their songs. We look forward to continuing to work with songwriters to help them use TikTok as a powerful and innovative channel to reach a global audience through a unique format of creation and engagement.”

David Israelite, President & CEO, NMPA, also commented on the agreement:

“We are pleased to find a way forward with TikTok which benefits songwriters and publishers and offers them critical compensation for their work. Music is an important part of apps like TikTok which merge songs with expression and popularize new music while also giving new life to classic songs. This agreement respects the work of creators and gives them a way to be paid for their essential contributions to the platform.”

Digital Music News reported in October that Israelite had sent a letter to Florida Senator Marco Rubio that TikTok had committed numerous copyright violations, including the violation of rights of songwriters and music publishers, that needed to be addressed.

Is TikTok being banned?

These are not the only instances where TikTok made headlines in recent weeks. Some employers have told their employees they must remove TikTok from their phones due to potential security risks. Geekwire reported on July 10 that Amazon employees received an email requiring them to delete TikTok from their phone. A company spokesperson said the message was sent in error. On July 13, CNN reported Wells Fargo also asked employees to delete the app and that the White House is discussing banning the China-based app in the U.S., fearing the Chinese government might get access to user data. India has already banned TikTok, according to TechCrunch. TikTok said it would like to open a dialogue with companies who want to ban the app from their organizations.

Insider Take

According to Statista and Oberlo, in 2019, TikTok had 800 million active users, and the app has been downloaded more than 2 billion times from the Google Play Store and the App Store. It is most popular in India with 611 million downloads, then China with 173.2 million downloads, and then the United States with 123.8 million downloads.

The popularity of TikTok tells us that this app is not going away. Not only do these numbers show how many people use it, but Facebook is so threatened that it plans to launch a rival, Instagram Reels, in early August, reports TechCrunch.

TikTok will continue to gain followers (I’ll admit I have downloaded it and find it entertaining and addictive), and it will garner support from creators. How the government, employers and rivals handle TikTok are separate matters entirely. We have not heard the last of potential concerns, and we expect TikTok to counter with additional goodwill gestures to strengthen its support among TikTok users.