Designing a Subscription Business Model to Sustain Growth Under EU Regulation
Led TikTok's first compliant monetization expansion beyond ads
Project
TikTok Subscription Hybrid MVP
Scope
0→1 business model exploration to MVP launch
My Role
Lead Designer, 14 months end-to-end strategy and execution
Objective
Sustain growth under strict EU regulation while improving user trust
EU ad regulations exposed a structural revenue ceiling
~80% of TikTok revenue depends on personalized ads
GDPR / DMA require explicit, non-nudging ad consent
Fully compliant consent UX increased friction and reduced consent
Resulted in >$130M projected annual revenue risk and a consent rate plateau
Compliance created a structural tension between transparency and growth
1
Transparency vs. Consent
More transparency increased user cognitive load and reduced ad consent
2
Consent vs. Revenue
Lower ad consent created revenue pressure
3
Revenue vs. Trust
Revenue pressure incentivized higher ad load, risking retention and trust
Why this was hard (0→1 business models):
No existing industry playbook resolved this three-way tension.
A new monetization path was required to remain compliant and scalable
  • UX optimization alone could not offset regulatory impact (validated in ad consent redesign initiatives)
  • Any new path needed to be compliant by design, scalable, and clearly valuable to users
Two fundamentally different monetization directions were explored
Subscription Hybrid
  • Paid ad-free plan alongside a free ad-supported plan
  • Expanded revenue structure while stabilizing ad consent
Ad-Consistency
  • Tied ad consent to preference for personalized versus generic video
  • Maintained ads as the sole revenue engine
Both models were evaluated using a consistent decision framework
  • Evaluation criteria applied to both directions.
  • Decisions driven by evidence rather than intuition.
Subscription Hybrid aligned with real user value and constraints
Primary value dimensions defined
  • Ad aversion versus ad tolerance
  • Willingness to pay
Clear user segments emerged
  • Ad-averse users showed intent to pay for ad-free viewing
  • Ad-tolerant users preferred free access and supported ads
Structural constraints(non-fits) were identified
  • Skippable ads limited subscription value density
  • The MVP needed to win through clarity rather than feature volume
Ad-Consistency collapsed under complexity and compliance risk
We validated this model:
  • Users preferred clear extremes(videos + ads) rather than mixed personalization states
  • Compliance-driven granularity increased confusion and cognitive load
  • Implementation required up to seven feed variants
  • Resulted in high UX complexity, high system cost, and increased regulatory ambiguity
Subscription Hybrid was selected for clarity, scalability, and safety
After validating both models:
  • Both options required significant investment
  • Subscription Hybrid provided clearer user understanding; System boundaries were simpler and easier to scale; Long-term compliance risk was lower
  • Ad-Consistency was intentionally killed
The MVP focused on clarity, control, and compliance safety
End-to-end experience designed across onboarding, feed, settings, and payments
Regulatory-informed design principles emphasized transparency, clarity, and user empowerment
Dark patterns and hidden trade-offs were explicitly avoided.
Plan selection was designed to minimize cognitive and compliance risk
  • Improved visual hierarchy for fast scanning and comprehension
  • Experience-based value framing instead of feature lists
  • Two-step selection with explicit confirmation to reduce mistaken choices
  • High-attention full-page format over bottom sheets
  • Content-centric layout to support focus and decision confidence
Payment infrastructure prioritized trust and recoverability
  • Smooth flow from plan selection to payment and confirmation
  • Centralized subscription management and cancellation in Settings
  • Clear downgrade paths and state transitions back to the free plan
  • Recovery paths designed for 87 payment and edge error scenarios
Subscription and ads were unified into a single mental model
Subscription management, ad settings, and consent were consolidated
  • Plan choice directly reflected its impact on the ad experience
  • Navigation burden was reduced
  • User control and trust were reinforced
The MVP delivered revenue growth, user value, and compliance
$350M-$440M
Incremental annual ad revenue
Free plan ad consent uplift drove ~12% increase
~5%
Revenue decline reversed
Projected annual revenue decline was eliminated
+12
Top-box satisfaction increase
Subscribers showed higher satisfaction compared to Free plan
Full Compliance
End-to-end journey validated through multiple legal and privacy reviews
What this case reflects about how I work
Operated effectively under high ambiguity and regulatory constraints
Designed across systems, monetization, and compliance boundaries
Prioritized decision quality and business impact over artifacts