Dance

TikTok's future is cloudy as the US looks into a security ban (India's already on it)

Snacks / Sunday, July 12, 2020
_When the TikTok ban nightmare becomes reality_
_When the TikTok ban nightmare becomes reality_

"How to become YouTube vlogstar"... Every TikTok stars' Google search last week after millions of like/view counts suddenly went to zero. TikTokers thought it was the first sign that their precious app had been banned. It was a glitch, but their fears are far from unfounded. The viral video app is owned by China-based Bytedance, the most valuable private startup in the world (~$100B). Before we dig into TikTok's possible demise, let's recap the impressive rise:

  • Within a few months of its 2018 US launch, TikTok reached #1 on the App Store, beating giants like Instagram and YouTube. In 2019, TikTok had over 738M global downloads.
  • Today, TikTok has been downloaded over 2B times and has an estimated 80M users in the US alone.

Clock's TikToking... Security concerns around TikTok's ties to China are heating up. The US already bans employees of many government agencies (like the Army) from having TikTok on work phones. Last week, Wells Fargo told employees to remove it from company devices. Amazon did the same, then weirdly backtracked. Also:

  • India full-on banned TikTok (and 58 other Chinese apps) on national security concerns. India was TikTok's largest market by far, driving 660M downloads since 2017. This may cost Bytedance $6B in lost ad sales.
  • President Trump said he's considering banning TikTok and other Chinese apps. Leaked moderation guidelines reveal TikTok has censored content critical of China. And the administration is worried American user data could be passed to the Chinese gov. Interestingly...
  • China itself bans TikTok — Chinese nationals use Bytedance's Douyin, the original, non-international version of TikTok: Same branding, same parent, separate content (which is censored by the Chinese gov).

TikTok has big US market influence... despite being a non-public, non-US company. Its explosive growth has major implications for American media. It's the biggest threat for disrupting social giants like Facebook, Snap, and Twitter. It contributed to Quibi's flop. And recently, it's been trying to appeal to the American gov: it brought on a former Disney exec as CEO and is considering adding a non-China HQ. But more TikTok bans could be coming — that would significantly reduce competition for US media companies.

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