Tik Tok, byteDance Ltd's TikTok, is testing a subscription service that would offer users an almost ad-free experience, as revealed by a code in the app reported by Android Authority.
However, this ad-free experience is limited to ads served directly by TikTok, meaning users will still face influencer marketing and brand sponsorships on the platform, TechCrunch reports.
Although Tiktok's revenue is primarily based on ads, it has managed to sustain its ad revenue even with the decline in online ad spending.
60% of ad buyers favored TikTok for short-form video content, Cowen said.
ByteDance secured 11% of Big Agency spending on social media, attracting top spenders like PepsiCo, Inc PEP, DoorDash, Inc DASH, Amazon.Com, and Apple Inc AAPL.
TikTok is open to exploring this option, echoing similar moves by other social media platforms like X and Alphabet Inc GOOGL YouTube.
In Q1 2023, ByteDance reported a operating profit of nearly $6 billion, almost double the profit earned in the same period in 2022.
The company's financial recovery is significant, given that it had a $7.2 billion operating loss in 2021. The rebound is a mix of increased revenue and reduced expenses.
Although ByteDance's revenue rose despite the profits, it was still experiencing a slowdown in its revenue growth.
In 2022, the company's profits surged by more than 38% to reach $855.2 billion. This growth rate, however, is modest compared to the nearly 80% increase in the previous year.
The tech giant has offered to buy back shares of its current employees at $160 each. This move comes amidst a reported 26% drop in the company's valuation, now at $223.5 billion, down from $300 billion a year ago.
ByteDance, despite financial gains, faces political uncertainty and increased competition from U.S. social media giants. The ongoing scrutiny of Tik Tok by U.S. authorities and regulators around the globe casts a shadow over the company's prospects.