TikTok: A New Type Of Social Media
Updated: Jul 18, 2020
Vine, but better
Renegade, Renegade, Renegade! Tiktok is taking social media platforms by storm and has demonstrated potential for immense growth. ByteDance, the parent company of TikTok, was founded by Yiming Zhang in March of 2012. The Chinese company owns many other businesses like Toutiao, Helo, Lark, and more. ByteDance acquired the already popular app known as Musical.ly in 2017 for an estimated $800 Million - $1 Billion. Musical.ly was re-branded by ByteDance and TikTok was born. Tiktok was brought into US markets on August 2nd, 2018.
This wildly popular short-video service allows creators to express themselves in a unique way. Users on the app are able to share videos about almost anything as long as they obey the community guidelines. These short videos are often accompanied with the sounds offered by the extensive library on the app.
Once you grant TikTok the right to use your music, TuneCore a digital music aggregator, will collect revenue based off of how many streams the artist receives. After TuneCore collects its royalty, the revenue is given back to the artist on a quarterly basis. TikTok has created a novel way for musicians to share their songs.
TikTok offers two pages for the user: the Following page and the For You page. The Following page is standard and it displays content published by the people you follow. However, the For You page is dictated by the notable "TikTok algorithm". It consists of videos created by people all over the world based on the user's interests. The interaction that the user has with each video on their For You page contributes to the next video that is shown in their feed. The interaction is defined by the hashtags, sounds, comments, location, and much more. All this data is collected by TikTok to produce a personalized and exclusive For You page for each user.
Creators on the app are making a large amount of money through their immense follower base. Charli D'Amelio, a 16-year-old TikTok sensation, boasts about 65.5 million followers on the app. She has gained a massive following due to her viral dance videos. As a result, large brands like Dunkin' and Prada have approached her in order to pursue brand deals to promote their products.
TikTok has two main streams of revenue: advertisements and in-app purchases. Succeeding TikTok's rapid growth in 2019 and 2020, many large organizations have used the platform to promote their products and services. For example, TikTok offers an in-feed video advertisement service. They require a promoter to spend a minimum of $500 on a campaign and will charge an additional $10 for every 1000 views received. The app also allows users to purchase coins from their virtual store. These coins can then be gifted to creators and friends which can exchanged for digital gifts.
As of May 29th, 2020, the Indian Government banned several Chinese-made apps, TikTok being one of them. India and China have recently gotten into a scuffle regarding border disputes and India has declared Chinese apps a threat to national security. India has one of the largest populations in the world and is a major target audience for apps like TikTok. The ban of this app in India will not only impact TikTok's revenue, but also prohibit growth for the time being.
TikTok has reportedly done $17 billion in 2019, which is more than double the distant $7.4 billion done in 2018. According to a report from Bloomberg, they made a net profit of $3 billion last year, making it the most valuable start-up in the world. ByteDance is looking forward to going public with an IPO this year and some analysts are giving them an initial evaluation of $180 billion according to Bloomberg.com. Investors are eager and waiting for the announcement which is rumored to be around the end of 2020.
TikTok has become a viral sensation and has expanded the capabilities of social media. Serving as a platform for entertainment and advertisement, TikTok offers a new way to engage with the world. TikTok has barely scratched the surface and people are excited to see what's next.