UA’s Shanniz Irmana, takes a closer look at ByteDance’s video sharing social networking that’s exploded onto our screens!
Lockdown (or Circuit Breaker – for fellow Singapore-based folks) seems to be bringing out something new in all of us. Some kick start their new sustainable fashion project, some realize they really should audition for next season’s Masterchef, some make peace with their unhealthy relationship with Netflix (me), and some try to stay young by downloading Tik Tok at nearly 28 years of age (also me).
Tik Tok, a 15 seconds or less video creation platform, surfaced in 2017 – when Beijing based tech startup ByteDance acquired a lip-syncing app called Musical.ly, and merged it with Tik Tok, which ByteDance already owned partially. Fast forward to 2020, Bloomberg reported ByteDance/Tik Tok to have secured over $7b in funding, giving a valuation of $75b, and talk of a mega IPO later this year.
Let’s take a closer look at social media’s latest cool kid.
Why it’s so popular
For full context, I downloaded Tik Tok whilst suffering from a pretty bad hangover just this past Saturday, and I didn’t have high hopes. I’d been familiar with Tik Tok for a while now, just from working in the industry and also partnering with their recruitment team globally, but I was first exposed to a Tik Tok production late last year, when the Tucker-Pritchett clan of Modern family posted a series of lip sync videos on their Instagram account.
Opening the Tik Tok app – I very much kept a “I won’t get this because I’m not Gen Z” mentality, but I was pleasantly surprised by how easy it was to use and create something. It offers the usual Instagram/Snapchat filters (oh, the dreamy filters!), and allows you to “heart” videos – basically the equivalent of “likes”. You also get an assortment of videos curated just for you, from other “Musers”, as well as major production houses, such as NBC and Seventeen (all mostly targeted at younger audiences).
But above all, to me it seems like the reason Tik Tok has taken off is its effortless user experience. Tik Tok allows you to upload, edit, and create short-form content masterpieces in a way that all of its social app counterparts hadn’t been able to. While Instagram still hasn’t found a way to offer Instagram Music for its stories in this part of the world, Tik Tok offers an audio database larger than any other for its users. The fact that the videos are limited to 15 seconds is also a plus in a world of content overload and short attention span. I get the appeal.
The brain behind it
Unlike his fellow social platform founders Mark Zuckerberg and Jack Ma, who seem to enjoy a fair amount of spotlight, Tik Tok’s founder Zhang Yiming – who owns an estimated 24% of ByteDance, has so far managed to keep a pretty low profile. According to Forbes, Zhang’s net worth is estimated at $16.2 billion, making him the 9th richest person in China on the Forbes real-time ranking of billionaires; and earned him a spot on the Forbes China 30 Under 30 list in 2013.”
Forbes also reported that Zhang was a software engineer who graduated from Nankai University in Tianjin who got his break in July 2012, when the company raised $5 million in its Series A financing round from billionaire investor Yuri Milner and Susquehanna Investments, which contributed another $10 million in 2013.
Since then, Zhang had lead the business through additional of funding from Sequoia Capital, gained 500 million active users globally on the app, and pushed ByteDance’s net value to around 10x of Snapchat’s current market cap!
Will it run out of road?
Talk of an IPO might be a bit muted given the current lockdown, but on ‘investment’ paper parent company ByteDance could be set to break all kinds of records, and easily knock Alibaba ($21.8b – 2014) off the top spot.
However, the company isn’t without its challenges. A recent article in Investment U highlighted Tik Tok’s income relies heavy on in-app purchases and a new to market advertising program, and as a result of that, isn’t making that much money.Mark Zuckerberg said on an audio file leaked by US media, “They’re spending a huge amount of money promoting it (TikTok. What we’ve found is that their retention is actually not that strong after they stop advertising.”
That said, from what we’ve observed, Tik Tok are making some big plays globally to wallop the advertising world – having already hired several executives from YouTube including Vanessa Pappas, a seven-year veteran of the Google video service, as their General Manager for North America & ANZ.ByteDance also snared former Facebook and Yahoo senior executive Blake Chandlee to help drive its international expansion. Chandlee was at the helm as Facebook launched in the UK back in 2007, and has already added some powers houses to the EMEA sales team with Stuart Flint jumping ship from Verizon Media, where he previously served as VP EMEA & LATAM.
Outside of their monetization strategy, TikTok has also had to deal with a fair amount of heat politically with India and the U.S, where the app has large followings.
In America, the trade war between China and the U.S. has come in as a major factor in the TikTok IPO decision. In October 2019, U.S. Senator Marco Rubio wrote a letter to Treasury Secretary Steven Mnuchin, requesting a national security review on ByteDance’s purchase of Musical.ly. Rubio is concerned that apps like TikTok are being used by the Chinese government to “globally suppress freedom of speech, expression and other freedoms that Americans so deeply cherish.”
Meanwhile in India, politicians have accused TikTok of spreading pornographic content and inciting racial hatred. An Indian court feared the app would expose children to sexual predators and enable cyberbullying. As a result, TikTok was banned in April 2019 for two weeks, but the court revised its decision after an appeal from ByteDance claimed that it had cracked down on inappropriate content. In those two weeks, TikTok missed out on gaining 15 million potential new users, and ByteDance reported a loss of $500,000 in revenue each day the app was blocked.
So, are we too old for it?
Grown up stuff aside, the big question remains.
And the short answer is HELL, NO (*finger snap!*)
Having spent a few minutes on the app (accompanied by a killer headache), I must say I found the app quite entertaining. Whilst most of its content, creators and users are targeted at the teens age bracket; I think that if you’ve actively used any other social media apps – Instagram, Snapchat, and (now gone) Vine, you’ll get a handle of Tik Tok pretty quickly and easily.
I’ve yet to come up with something that’s gonna earn me my 15 minutes of fame – but perhaps I’ll try again next weekend, this time not after 2 bottles of wine the night before. My handle is @shannizpie. Watch this space, I could be on Ellen soon for my hilarious Taylor Swift lip-sync video. Till then, stay safe and stay sane!