How TikTok Makes Money and Pays Its Stars: A Look Inside the Platform's Canadian Growth

TikTok has revealed that millions of Canadians use the app, and the company is making big changes to how it pays people who create videos on the platform. ByteDance, the Chinese company that owns TikTok, is pushing hard to build what it calls a "creator economy" — a system where video makers can actually earn money.

The company even set up a physical office in Toronto during 2024, which is unusual for a social media platform that operates mostly online. It shows TikTok is serious about Canada as a market. The company brought in Lisa Skeppner to lead artist partnerships, and James Stafford oversees global content.

How TikTok Pays Creators

Until recently, creators on TikTok had almost no direct way to earn money from the platform itself. That changed when TikTok launched something called TikTok Pulse in 2024.

Here's how it works: when ads appear next to videos from popular creators, those creators now get a share of the money that advertisers pay. It's similar to how YouTube lets creators earn from ads on their videos. Before this, creators could only make money by doing sponsored posts for companies — the brand paid them directly, and TikTok got nothing from that arrangement.

To use Pulse, creators need to meet certain thresholds. They have to have a minimum number of followers and their videos need to perform well. When ads run alongside their content, they earn money based on how many times those ads are shown.

TikTok also added a Q&A feature that lets creators respond to viewer questions in video form. It's a way for creators to build a stronger relationship with their audience without needing to negotiate separate deals with brands.

TikTok's Tools for Businesses

In 2020, TikTok launched TikTok For Business, a set of tools designed to help companies advertise on the platform. These include the ability to take over a creator's account for a day, place ads in the regular video feed, and create augmented reality (AR) filters that users can play with.

Augmented reality means digital effects layered on top of the real world — think of the face filters you see on Instagram or Snapchat. Creating these in real-time on phones is technically difficult, but when done well, they're engaging. Companies have found that when users can try on AR effects from a brand, they're more likely to share those moments with friends, which spreads the brand's message for free.

TikTok partnered with Warner Bros. in August 2024 to let people discover movies and TV shows directly through the app. If you watch a trending clip from a film, you can click through to watch the full movie — all without leaving TikTok.

Why TikTok Is Changing

The broader context here is that social media platforms go through predictable stages. In the early days, platforms focus on getting users. Once they have millions of people using the app, they add ways to make money and tools to help creators earn. Facebook followed this exact path in the mid-2010s.

TikTok is at that second stage. Millions of people are already on the app. Now the company is building out monetization — ways to make revenue and attract serious video creators who see it as a real job, not just a hobby.

How TikTok Finds and Promotes Videos

TikTok's recommendation system works differently than older social networks like Facebook. On Facebook, you mostly see posts from people you follow, in the order they posted them. On TikTok, the algorithm looks at which videos you watch completely, how fast you engage with them, and whether you rewatch them. It then shows you similar content from creators you may not follow at all.

This matters for brands advertising on TikTok. On other platforms, brands often pay popular creators who already have large audiences. On TikTok, a brand's ad can go viral based purely on whether the algorithm thinks you'll like it — follower count is less important. This is why some creators can suddenly blow up on TikTok even if they're completely unknown.

The Canadian market serves as a test ground for TikTok. New features often roll out there first before spreading to the United States and other countries.

What Comes Next

In my view, the setup TikTok has built in Canada — combining direct creator payments, AR advertising tools, and partnerships with entertainment companies — shows where the platform is heading. It's becoming more than just a place to watch funny videos. It's becoming a place where creators can have a real career, where brands can advertise in new ways, and where you might discover the next movie you want to watch.

This kind of evolution has happened before with other platforms. What stands out about TikTok is the speed and ambition of the shift. The company is moving fast to turn entertainment into an economic opportunity for creators, which could be a powerful tool for keeping talented people making content on the platform rather than moving elsewhere.