Video-Sharing Apps Business Models: TikTok Case Study

Abstract

As the number of mobile and Internet users increases around the world, the consumption of video content continues to grow exponentially among people, as well as businesses. However, for these platforms to offer their services at a low to no cost, they have to experiment with different business models, looking for profitability and economic balance without charging their users. In this paper, we will describe and discuss the business model of a video sharing platform that became a worldwide phenomenon only three years after its launch, from raising billions of dollars from notorious investors — e.g. SoftBank Group, Tiger Global Management — to generating exorbitant revenues, this video application was very innovative and versatile at making money and generating revenues. The main goal of this study is to understand how video sharing platforms monetize their business, especially if most of its services are free for its users. The paper highlights all the steps of a business model, using the “TikTok” application as the case study of a successful model. We found that video-sharing applications need to incorporate new ways of monetizing their businesses that they are very versatile, they do not rely solely on advertising and that they are experimenting with various models, e.g. paid subscriptions and in-app purchases.