TikTok Promises Over $2 Billion for Creators as US Ban, Reels Competition Looms

After the ban in India, the Trump administration is considering the same in the US.

By Akhil Arora | Updated: 31 July 2020 19:09 IST

Photo Credit: Akhil Arora/Gadgets 360

Highlights

Over half of TikTok Creator Fund will go to creators in the US
TikTok’s alleged ties to the Chinese state have become a headache
It’s also promised to add 10,000 jobs in the US to ease fears

TikTok has pledged to invest over $2 billion (about Rs. 14,960 crores) worldwide in the next three years to support its creators, it revealed Wednesday, as part of the TikTok Creator Fund. That's a massive increase from the original $200 million (about Rs. 1,496 crores) TikTok pledged earlier in July. Over half of the $2 billion will go to creators in the US, a move that comes in the wake of growing scrutiny over the app's alleged ties to the Chinese government by both major US political parties, with US President Trump going so far to consider an outright ban, as India did a month ago.

The TikTok Creator Fund will be open to applications in the US sometime in August, TikTok US general manager Vanessa Pappas said in its announcement. Creators will need to be at least 18 years old, and pass criteria for follower count and new post regularity determined by TikTok. $200 million will be distributed in the US over the first year; and $70 million (about Rs. 523 crores) in the first year in Europe, which will grow to $300 million (about Rs. 2,244 crores) over three years.

While TikTok cites the aim of the Creator Fund is to support “ambitious creators” looking to create a livelihood on the app that is known for short-form lip-sync, comedy, dance, and talent videos, the app will also hope that the sizeable investment will convince wary governments of its usefulness and ward off competitors hungry for a piece of the pie.

The Indian government cited concerns of data security and privacy after it banned TikTok — along with five dozen other apps owned by Chinese firms — towards the end of June, though that move came shortly after border skirmishes between Indian and Chinese troops. Other governments around the world have raised similar concerns, even as TikTok has repeatedly maintained that it does not share user data with the Chinese government.

To help its cause, TikTok tapped Disney's former head of streaming Kevin Mayer in May to become its new CEO. It promised to add 10,000 jobs in the US. But none of that has stemmed the criticisms. With pressure growing this month as Trump tasked his cabinet to explore a ban on the app in the US, TikTok has reportedly been mulling setting up a new international headquarters — or selling a majority to US investors.

The TikTok Creator Fund is also crucial in bringing in and retaining creators whose content is the bedrock of the platform. Instagram's Reels — a direct competitor that launched in India shortly after TikTok's ban — is due to roll out in the US in early August. And to boost its cause, Facebook is courting big TikTok creators with millions of followers, offering them six-figure dollar deals in a bid to move them over to Reels, the Wall Street Journal [paywall] reported earlier this week.

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