Why TikTok is Shutting Down its $1 Billion Creator Fund

Social media platform, TikTok has informed its user base that the $1 billion creator fund, initially introduced in 2020, will be concluding on December 16, 2023.  

According to the Verge, the development will primarily impact creators in the United States, the United Kingdom, Germany, and France, who will no longer have the opportunity to monetize their content through the original fund.  

TikTok spokesperson Maria Jung clarified that this change will not affect TikTokers in Italy and Spain. 

The creator fund was established with the promise of disbursing $1 billion over three years to individuals generating viral content on the platform.  

However, influencers and content creators recorded relatively low payouts, often just a few dollars for videos garnering millions of views.

Consequently, relying solely on the creator fund for a sustainable income became unfeasible.  

What you should know 

In February of this year, TikTok introduced an alternative monetization approach called the Creativity Program, aiming to offer more substantial earnings to popular creators.  

This program, in contrast to the original fund, requires creators to produce videos longer than one minute, a notable departure for an app that initially gained popularity through short video clips.  

Furthermore, TikTok shifted from disclosing a fixed pool of funds from which payments were made to determining earnings based on views and other engagement metrics.

Since the launch of this new system, eligible creators have been invited to transition to the Creativity Program.

According to Maria Jung, creators can potentially earn up to 20 times more than they did under the original fund. 

The conclusion of TikTok’s original fund is not unexpected, as it was initially a three-year commitment with a predefined allocation of resources.

Creators in the affected regions— the US, UK, Germany, and France—participating in the fund will have the opportunity to migrate to the Creativity Program. 

Earning income on TikTok has historically been characterized by greater unpredictability compared to other platforms like YouTube or Twitch.