Byte Outlines Initial Payment Process for Creators, With $250k Allocated to Payments

One of the key elements that eventually lead to the demise of short-form video app Vine was its inability to offer revenue-generation tools for top creators.

As goes the story, a group of Vine’s top creators, who had seen other Vine makers migrating to YouTube and Instagram to make money, met with Vine management in 2016 and called on the company to formulate a better revenue-sharing process, or see them abandon the platform, taking their audiences with them. Vine, and parent company Twitter, were unable to come up with a workable alternative, so the creators left, in what eventually proved to be the final blow for the app.

Vine co-founder Dom Hoffman is well aware of this concern, which is why when Hoffman announced the launch of Byte last month, his successor to Vine, Hoffman specifically noted that, from the get-go, Byte would invest in its creators, and ensure that they get paid – even if it had to dip into its own funding to make it happen.

And now, Hoffman is indeed following through on that promise.

As reported by The Verge, Byte plans to start its creator payment program in April, with $250,000 in payments on offer for top creators.

As per The Verge:

“The program will be fairly limited at first. Only up to 100 creators will be included, and they’ll have to apply and be chosen by Byte. Byte says it’s looking for people who regularly post, make full-screen portrait videos, and are positive members of the community. Byte will pay partners every 30 days based on their viewership. Creators will be put into “Viewership Brackets,” and everyone in the same bracket will be paid the same amount. The company didn’t provide specifics on how much creators can expect to make.”

That’s an ambitious program indeed – essentially, Byte will be paying out $250k of its own seed money direct to creators. Eventually, Byte will be hoping to fund this process through ad revenue – Byte has previously noted that its long-term plan is to have the majority of its revenue going to creators. It’s starting with 100% of any ad intake feeding into the creator payments program – but right now, with limited ad revenue, Byte is essentially adding top creators to its payroll, which means the company is all outgoing and no incoming, at least for the foreseeable future.

The program is particularly ambitious because thus far no platform has been able to successfully monetize short-form content. TikTok, for example, reportedly generated $176.9 million in revenue in 2019, but $122.9 of that came from China, where the Chinese version of the app, Douyin, is well-known for its eCommerce and in-app shopping integrations. In the US, TikTok reportedly generated $36 million for the year, while the UK came in third at $4.2 million. That’s not chump change, of course, but TikTok was also reportedly spending up to $3 million per day on ads in the US market in order to maximize its presence.

Given the massive public awareness push, it’s hard to tell how much TikTok’s ad revenue was driven by usage, and brands seeing it as a viable way to reach their target audiences, and how much it was boosted by artificial hype. Eventually, TikTok will need to dial down their ad spending, otherwise the costs won’t offset the gains, and only then will we truly know how many people are using TikTok regularly, and how well its ad options are performing, in regards to driving consumer action.

Part of the challenge here is that short video clips don’t enable much space for ad placement. On TikTok, as with Vine before it, ads are being slotted in between regular clips, which enables users to easily swipe on past them, without giving them a look. On longer videos, users are more inclined to sit through ad content, in order to view the clip in full, but with videos that lost only seconds, generating optimal ad engagement is a tough sell.

That’s why TikTok is looking to fuel its own influencer marketplace, helping brands connect with top platform creators to maximize their messaging. Byte will likely need to look to the same – but even so, the viability of such a program is relative to overall usage. If Byte can’t attract a critical influx of active, repeat users, advertisers just won’t care. 

Can Byte do it? Do people really miss Vine so much that they’ll be keen to switch across from Instagram and TikTok to the new app?

It’s a significant gamble, an “all-in” strategy which will eventually make or break the app. 

It’ll be interesting to see how it plays out.

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