A decent chunk of people who use TikTok aren’t aware of its editing app called CapCut. CapCut has been growing silently and has become the highest-earning app in the video editing category, leaving Facetune, Picsart and Splice behind. CapCut was a free app until it added some subscriptions in 2022. Now, CapCut is going all-in on subscriptions with its free tier on the brink of disappearing. Why is ByteDance completely monetizing the app?

According to the estimates by App Figures, CapCut’s net revenue reached 17.6 million in July 2024. This revenue is the all-time high for CapCut, and it is the revenue that ByteDance has taken after giving Apple and Google its fees. CapCut’s month-over-month revenue also increased to 32% in July 2024.

CapCut’s revenue has always been stable ever since it introduced subscriptions. It grew to $1 million in four months to $10 million in six months after monetization. Now CapCut is way ahead of its competitors and doesn’t need any free tier to support it. Its free tier was just an investment made by ByteDance to establish a community of its users so now the investment can pay back.

ByteDance had a full strategy to make CapCut fully accessible to users and then make it monetized once it is stable. CapCut users may protest about cutting some free features but ByteDance is likely going to ignore them. Even if a number of free tier users stop using the app, CapCut’s revenue is still going to get higher because the app has become a leader among other apps of its category.

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