TikTok Shop’s Massive Commission Hike Delivers More Bad News for Creators

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This Week: ALERT – Come to my meetup in Las Vegas next week, Tuesday January 16th from 5:30-7:30 at Margaritaville. We’ll be celebrating “Creator Economy Live” (I’m hosting the next day) and paying our respects to Jimmy too. RSVP here – and pre-order a drink here (and anywhere else I go over the next 3 years). I can’t wait to see you there!

Live by the Platform, Die by the Platform: TikTok Shop was arguably one of the biggest Holiday 2023 winners. But now creators and sellers are losing, as Double T plans to quadruple their commission and pull back from seller subsidies (source: The Information $). It’s yet another reason not to put all your eggs in one platform’s basket, as creators and businesses built on Meta, YouTube and Twitter already know. TikTok has HUGE plans for shop in US this year – 10x growth to $17.5B topline. These changes will increase their rake from $350M to $1.4B in the US alone – without counting subsidy impacts. That’s more than a BILLION DOLLAR swing from sellers to Double T. Just another example of why it’s better to build your own thing if you can if you can.

  • Related: During the holiday season white label creator-storefront platform Anchor saw 7-12x better conversion than 3rd party non-exclusive creator shops, and CTRs as high as 51%, for both DTC brands and retailers. Could be an alternative (full disclosure, I am on parent company Motom’s advisory board).

Logan Paul Does Something Right: I’ve been critical of Logan Paul, as he’s made many boneheaded and insensitive moves in his creator career. But it’s worth calling out when he follows through. After Coffeezilla outed his Crypto-Zoo debacle, Paul just offered to refund everyone holding a Crytpo-Zoo egg NFT at list price – see Paul’s statement here. Speculators who bid up the prices are out – but that’s not necessarily Paul’s fault (although his overhyping contributed – and what did he net in resale-fees?). However, as Coffeezilla explains in Friday’s video, his “refund” doesn’t include the Crypto-Zoo in-game tokens (which arguably were meant for in-game play only). Those buyers are taking a bath, as Paul also just axed the Crypto-Zoo Game. It’s certainly better than nothing, and some users will be made whole on what they spent a year ago (ignoring the fluctuating ETH to fiat exchange rate). It’s more than I expected, but less than his fans probably deserve. Unfortunately, this is also likely to squash any crypto/NFT recovery for 2024 – at least in the creator economy.

When is Enough Enough? Is standing with Substack equivalent to approving Nazi-tolerance? Top newsletter writer Casey Newton ties himself in knots, but fails to lay out what would send him running – instead opting to work internally to fix the problem. My take? A time will come – soon – when Substack writers will have to decide whether they want to support a platform that profits from Nazi content. I recently flirted with Substack for this newsletter, but no more. I hope Newton does the right thing and cancels Substack if he can’t change the company.

YouTuber vs. ESPN Battle Erupts in Public: Keep an eye on the dust-up between ESPN and Pat McAfee. McAfee claims that an ESPN exec is trying to sabotage his show – after they paid $85M to bring it to the sports network. ESPN responded that they remain committed to McAfee’s success and will handle the matter internally. But it’s proving to be a cautionary tale on both sides. The freewheeling nature of online video, where seemingly anything goes, doesn’t always fit on traditional TV. And the byzantine and brutal politics at big media companies can certainly surprise creators who are accustomed to controlling their own empire. The issue revolves around leaked ratings, and whether McAfee’s show is delivering viewers. The underlying problem is that ESPN is available in only around 70M households in the US – likely skewed older than McAfee’s demographics on YouTube – and declining rapidly. Youtubers aren’t going to save the bundle – and aren’t going to save ESPN either. It didn’t take long for the knives to come out.

  • Related: WaPo pens a “where is she now” on super-talented ex-YouTuber and late-night TV host Lilly Singh.

AI Copyright Challenges Extend to Images: Interesting research shows that popular image generation tools – including MidJourney, Dall-E 3 and Bing Creator surface copyrighted characters even when not explicitly asked for them. Gary Marcus and Reid Southern did initial research, which was verified and then expanded upon by Tom’s Hardware. The prompts and images are pretty revealing. You can certainly spend hours tweaking prompts until you come up with something electrifying – but I’ve experienced this too. Sorting out copyright across generative AI will be another big trend this year – 11 on my list of 10 megatrends – as these experiments confirm. But it’s going to be hard to put the Barbara Eden back in the bottle.







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