Understanding TikTok's Payment Model: Why Millions of Streams Don't Equal Big Revenue

If you're wondering how millions of streams on TikTok can result in relatively low revenue, it's important to understand how TikTok's payment model works. Below, we'll break down the key points to help clarify the situation.

TikTok Does Not Pay Per Stream (Until Recently)

Unlike many other platforms, TikTok's original payment model was based on creations, not streams. This means revenue was generated when users created content (videos) using your track, rather than from how many times the track was streamed.

This has been the case since our first agreement with TikTok, which covered all sales up until October 31, 2024.

The New Payment Model (From November 1, 2024)

Starting from November 1, 2024, TikTok has shifted to a new payment model. Under this new system:

• TikTok will pay per stream instead of per creation.
• However, this applies only to Premium Content Generators (PCG) and not to User-Generated Content (UGC).
• This new payment structure is consistent across all distributors globally, meaning it's not specific to any single distributor or customer.

Streams vs. Creations: Why the Discrepancy?

Although you may see millions of streams reflected in your trends or analytics, TikTok's payment system historically prioritized creations. This is a key distinction:

• Streams: The number of times your track is played on TikTok.
• Creations: The number of videos created using your track.

Under the previous model, TikTok only paid for creations, regardless of the number of streams those creations generated.

TikTok and Low-Paying Stores

TikTok, like some other platforms, typically falls into the category of low-paying stores. While it generates an enormous number of streams, the revenue per stream (or per creation) is relatively low compared to other platforms. This is a structural limitation of TikTok's monetization framework and is consistent for all artists, labels, and distributors worldwide.

Why the Transition Matters

The transition to the new payment model (from per creation to per stream for PCG) is expected to align TikTok more closely with other streaming platforms. However, it's important to note that the UGC model—which represents a significant portion of TikTok activity—remains unchanged.

In Summary

The apparent mismatch between streams and revenue is a direct result of TikTok's unique payment model. While the platform generates significant visibility and engagement for tracks, its monetization model (both past and present) is structured differently from traditional streaming services.

If you have further questions or need assistance interpreting your statements, feel free to reach out to our support team. We're here to help!