Who Makes More Money: TikTok or YouTube?

When comparing TikTok and YouTube, two of the biggest social media platforms in the world, the question of which one makes more money often arises. While both platforms have vast user bases and generate significant revenue, the ways they make money and the overall amounts they generate can differ significantly.

Revenue Generation Models

YouTube, owned by Google, primarily generates revenue through advertisements. It has a well-established ad system where advertisers can target specific audiences based on their viewing habits, search history, and more. YouTube also offers premium subscription services like YouTube Premium, which provides ad-free viewing and access to exclusive content.

TikTok, on the other hand, primarily generates revenue through in-app purchases and brand partnerships. TikTok’s revenue model is less reliant on traditional advertising and more focused on user-generated content, where creators can earn money through virtual gifts and brand deals. TikTok has also started to implement advertising more aggressively, but it’s still in the process of building out a comprehensive ad ecosystem like YouTube’s.

Revenue Figures

To understand which platform makes more money, let’s look at some revenue figures:

• YouTube: In 2023, YouTube generated over $34 billion in ad revenue alone, making it one of the most profitable platforms in the world. This figure does not include revenue from YouTube Premium or other monetization methods, which would add several more billions to the total.
• TikTok: In comparison, TikTok generated around $18 billion in 2023, a significant figure but still less than YouTube. However, TikTok's growth rate has been faster, especially considering that it was only launched in 2016.

User Base and Engagement

Both platforms boast huge user bases, but they cater to slightly different demographics and usage patterns.

• YouTube: As of 2023, YouTube had over 2.5 billion active users. The platform is popular across all age groups, with content ranging from educational videos to music, gaming, and vlogs. Users spend an average of 40 minutes per session on YouTube, which is considerable.
• TikTok: TikTok, on the other hand, has over 1.6 billion active users. The platform is particularly popular among younger audiences, especially Gen Z. Users spend an average of 52 minutes per session, which is higher than YouTube, indicating strong user engagement.

Monetization for Creators

When it comes to creators making money on these platforms, YouTube has a more established system.

• YouTube: Creators can earn money through ad revenue, channel memberships, Super Chats during live streams, and YouTube Premium revenue share. Many top creators earn millions of dollars annually, with YouTube providing a more predictable income stream.
• TikTok: On TikTok, creators primarily make money through brand partnerships and in-app gifts. TikTok also has a Creator Fund, but many creators have criticized it for offering lower payouts compared to YouTube. However, TikTok’s viral nature means that creators can gain followers and brand deals very quickly.

Advertising Potential

YouTube’s mature ad ecosystem provides a reliable source of revenue for both the platform and creators. Advertisers can run highly targeted campaigns, and with the advent of YouTube Shorts, the platform is also catering to the short-form video trend that TikTok popularized.

TikTok, while still developing its ad system, offers unique opportunities for brands to engage with younger audiences through challenges, trends, and sponsored content. TikTok’s algorithm is known for pushing content to users based on their interests, making it easier for advertisers to reach potential customers.

Conclusion

While YouTube currently generates more revenue than TikTok, it’s important to note the rapid growth of TikTok, which could see it close the gap in the coming years. YouTube’s established ad system and diverse content offerings give it an edge, but TikTok’s strong engagement and innovative revenue streams make it a formidable competitor. For creators and brands, the choice between the two platforms will depend on their target audience and content strategy. Both platforms offer unique opportunities, but as it stands, YouTube still leads in terms of overall revenue.