TikTok tests ad-free subscription scheme in a single marketplace

In an unidentified country, TikTok users have the option of paying to avoid ads. The Chinese platform has launched a subscription test first discovered by the specialised blog Android Authority through the code of the new version of its application and later confirmed by a company spokesperson. Beyond that, there has been no further information about the cost or the market in which the test is taking place, apart from ruling out the US.

The latter contradicts in principle what was revealed by Android Authority, whose finding pointed to a fee of $4.99 in that country during the test phase. Also confusing is the fact that the text indicated that “the price includes value-added tax”, which is a tax that is not used in the US. In any case, the company representative has indicated that this experiment may or may not go ahead to expand to other countries, but the conditions under which this would happen are also unclear.

As with other platforms, such an eventual subscription scheme would exempt users from viewing the campaigns served by the platform itself. Those agreements between creators and brands would remain visible, not least because these publications are often not even identified as advertising.

TikTok has more than 1 billion users worldwide and more than 150 million of them are in the US, where it faces a growing risk of being blocked at the national level. That situation is less tense in the EU, but the Digital Services Directive introduces more pressure and oversight on the advertising business of the big platforms, so a paid version without ads could be an interesting alternative. It already is for Meta, which has offered the EU authorities such a compromise so that those who do not want their data to be used for commercial targeting have an alternative.

If it were to go ahead on those terms, the subscription model would be part of a wave of new efforts to capture revenue in the Chinese app. In August, for example, it began placing ad placements in search results and in July launched a separate app in Brazil and Indonesia to play the music that TikTok is now crucial to discovering.

ByTeDance, TikTok’s parent company, had a turnover of more than $80 billion in 2022. That was a more than 30% increase in turnover compared to the previous year, while by 2021 that figure had shot up by almost 80%. The vast majority of this revenue comes from advertising.