The Multi-Billion Dollar Opportunity TikTok Created that No One's Talking About

TikTok has been the kingmaker of apps this entire year + the highest earning app in the world consistently.

But there's something most people don't ever think about and that's how much money people spend on editing videos for TikTok in TikTok's own video editor, CapCut.

Short answer: A lot!

It's been a while since I looked into CapCut's earnings so I wasn't sure what to expect. On the one hand, CapCut has seen meteoric rise at the expense of past incumbents, but on the other, I'd also expected them to do something about it and stifle that growth.

Well, they haven't. Or, more likely, haven't been able to...

So far this year, CapCut's global net revenue rose 78% to $93.5M in August, according to our estimates. And that's all net, which means what Bytedance gets to keep after Apple and Google deduct their fees. Even if revenue stays flat for the next 12 months - it won't - CapCut is set to earn more than a billion dollars globally.

One interesting trend I noticed when digging into the data was that revenue in China is actually declining while revenue elsewhere is rising.

CapCut has a dedicated iOS app for China, and while its revenue has grown roughly 50% since the beginning of the year, it's been on a downward trend this summer. According to our estimates, net revenue from China started at $21M in January, peaked at $40M in May, and dropped to $35M in August. And that's all after fees.

But despite that, strong growth in the US, where revenue more than doubled on both the App Store and Google Play this year, has pushed global revenue to this new high.

I took a look at competitors Splice and Picsart and despite the summer being a strong season for video editors historically, revenue has been very static. At least revenue didn't decline. But, this performance should be a warning sign for the entire niche.

Can it survive in the age of CapCut?