In our
We have discussed that Meta is considering introducing paid, ad-free subscriptions on Facebook and Instagram in response to the EU's Digital Services Act. Now, TikTok is following this example by even testing an ad-free subscription service for just $4.99 per month.
Availability of Ad-Free Subscriptions
This ad-free subscription service is currently being tested in the United States, as
has noted. Not all users in the US currently seem to have access to this subscription. During the testing phase, the subscription price is set at $4.99, which is approximately €4.75. However, it remains unclear if and when this ad-free subscription will officially become available and whether it will also be available in the Netherlands.
Impact on TikTok Users and Advertisers
An analysis of the code within the social platform suggests that the service will soon be available. This raises the question: what does this mean for businesses and organizations that rely on TikTok for their advertising reach? If the new subscription service proves to be popular, it could have a significant impact on advertisers' reach on the platform, potentially leading to a decrease in the value of the product for these advertisers. It is important to note that influencer marketing campaigns and one-time promotions will still appear in the paid version of the app. Only the ads served by TikTok will be excluded.
Why is TikTok taking this step now?
The answer lies in the numbers. TikTok generated the majority of its profit from advertising revenue, which amounted to a staggering $9.4 billion in 2022. This figure is expected to quadruple by 2026. To mitigate financial risks, the platform's executives are exploring the possibility of diversifying revenue streams, with the introduction of paid subscriptions seen as a logical step.