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Moving Beyond Novelty - TikTok's Expansion as a Global Social Media Platform
With an ever-growing user base of over 500 million users worldwide and resounding popularity amongst teenagers, the video sharing and lip-syncing app TikTok, has been one of the most talked about social media apps of 2019. This success has notably been driven by the absorption of the widely popular Musical.ly, acquired by TikTok’s parent company ByteDance, a Chinese organisation specialised in AI-powered content platforms.
The fun and engaging content available on TikTok has quickly propelled the platform as the go-to video-sharing app for teenagers, with Futuresource’s Kids Tech research highlighting that girls are three times as likely to be using TikTok than boys; indeed, girls aged 11-14 account for 40% of all TikTok users under 16. The platform and how users engage with it demonstrates an evolving social media space, with users becoming content creators and entertainers themselves.
While the platform is experimenting in different ways to capitalise on its user stickiness, most of its revenues are currently derived from virtual gifts offered by fans to TikTok content creators. In addition to direct monetisation, the value extracted from TikTok resides in the data it is gathering on its users. This data improves its content recommendation engines but also benefits the other companies of parent ByteDance, providing key learnings on user engagement, trends and habits, helping the improvement of the AI engine that powers all ByteDance products.
With music at its core, TikTok has become a key music discovery tool. It has notably been responsible for multiple successes, including Lil Nas X “Old Town Road”. Due to the virality of TikTok’s content, its access to a young and engaged user base, combined with its ability to break songs, record labels and artists have been significantly investing in TikTok.
However, the lack of control on both the content uploaded and the person who joins the platform have also brought challenges. Firstly, the type of licenses granted for the use of music on TikTok has been a point of friction between the platform and rights holders, with some of the negotiations remaining unsolved. Secondly, with younger audiences using the platform, online abuse and privacy concerns have been pointed out, leading to multiple investigations.
The future for TikTok now lies on the platform’s ability to pass through the ‘novelty app’ phase and to keep on growing its user base and engagement. TikTok could extend its user demographics and diversify its content, which would open the platform to non-music content providers and offer new opportunities for brands and influencers. Competition in the short-form video sharing domain is also expected to intensify; established players such as Instagram or Facebook will potentially release new features or products to replicate what made TikTok a success (Facebook already experimented this in the US with Lasso). For ByteDance, TikTok’s success is an opportunity to keep learning and developing its other products and services, as it seeks to become an increasingly important part of the social media landscape.
Futuresource has recently published a Perspectives report addressing some of the details above in more detail, please get in touch if this is of interest.
Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.