The people who bring you video entertainment can have a hard time: a looming recession could hurt both their advertising revenue and consumer spending on subscription TV streaming services. But they also face an enemy that has nothing to do with the economic cycle: TikTok comes for their eyeballs.
The free video sharing service is sometimes described as a social network, but that description hides what it really is: a colossally powerful entertainment program that keeps viewers glued to an endless stream of clips.
And TikTok is getting bigger every day: it now says it has 1 billion monthly users, but even that number probably underestimates its importance, because TikTok users spend a very time on TikTok – a year ago, the company told advertisers that its users spend almost 90 minutes a day on the application. In contrast, American TV and streaming viewers spend almost five hours a day watching their programs and movies – but TV is very old, and TikTok is very young. You can not attribute TV’s long-term viewer losses to a new application, but it’s very easy to see how it’s going to make it harder than ever to train young prospective viewers to watch or even stream traditional TV.
“It is safe to say that TikTok has grown rapidly into one of – if not the “Largest social / communications / video applications in America in terms of time spent,” analyst Michael Nathanson wrote in a report last week.
Traditional media have been dealing with – and losing to – the competitive threat posed by the internet for years. Remember NBC’s freakout when Saturday Night Live‘s Lazy Sunday sketch went viral on YouTube in 2006? However, TikTok seems more dangerous and difficult for media executives to detect, such as a mostly submerged iceberg.
If you run a media company, you’ve been telling yourself for years that your network or service has stuff that people simply can not find on YouTube or Facebook or Instagram or Reddit. But TikTok removes most of those arguments: It’s a direct competitor to video eyeballs; it’s more compelling than the stuff you program; and, just like a gambling machine, it promises viewers that there is always another dopamine hit, just once away.
“Tiktok is so much fun, and it’s so addictive – far more than anything you can see on TV,” says Rich Greenfield, a Wall Street analyst at LightShed.
So, what is Big Media doing to counter or respond to TikTok’s threat? Nothing more than hope it’s a fad that disappears, from what I can say. But I wanted to make sure I did not miss anything, so I called around and heard crickets. I checked three times by asking Nathanson, who was just digging deep into TikTok’s impact – did he know of any media companies doing something interesting in response? His one-word, all-caps answer: “NO.”
However, the media companies give it a go: Unlike YouTube a generation ago, they are not trying to sue TikTok out of existence. And they realized that anything with so many eyeballs is a great place to advertise.
At the moment, at least they do not have to pay to do so: while TikTok likes to take their money – it costs up to $ 3 million for an ad at the top of its stream that he says can reach all its users in the US and Canada – the service’s advertising business is just starting to increase. At the moment, it really expects media companies to act just like its users – by giving it content that it can use to entertain other users.
And many of them are prepared for that, says Catherine Halaby, a TikTok manager whose job is to help networks and streamers establish a presence on the service. She says her three-person team works with more than 300 accounts, compared to 100 a year ago.
“By the time they came to us, they were 100 percent bought in with the idea that they should be on TikTok,” she says. “But there’s a lot of confusion about how to do that.”
Halaby says there are some issues for media companies to resolve when posting their tracks on TikTok: The first is simply to understand that while TikTok users can actively follow and search for creators and videos they like, the the vast majority of videos are served using TikTok’s well-known dataset and algorithm. It is supposed to choose things that an individual user will like, regardless of whether they knew they wanted it.
The second is the pace: TikTok users are moving fast from trend to trend. Which means a company that wants to capitalize on a new viral dance or soundtrack – like the “Jiggle Jiggle” song that turned the documentary Louis Theroux into an unlikely star – means a corporate account that wants to do the same , it should do fast. “Moving at that speed is the biggest adjustment,” Halaby says.
She mentions Netflix, with its 24 million subscribers on its main account making it by far the biggest streamer on the service, and Paramount Pictures, which maximized its shirtless beach soccer footage from Top Gun: Maverickas entertainment companies that have realized that TikTok is for entertainment.
However, it is not clear whether the entertainment companies that post free content on TikTok are helping themselves or TikTok. Omar Raja |a social media star at ESPN, says he goes out of his way to find good things to show TikTokers that are not traditional sports highlights.
“I try to create content that typical sports viewers would not typically watch,” he says. It seems like a good strategy to make videos that work on TikTok – but it’s harder to understand how it helps a media property that caters to typical sports viewers.
And a studio manager to whom I granted anonymity to speak openly says TikTok is “incredibly effective” in raising awareness for a movie – just like a TV commercial or a billboard – but says TikTok users are very unlikely to see a cut for a movie and then go buy a ticket. “They just do not go away,” he says.
On the other hand, says Sylvia George, who runs performance marketing for AMC Networks, says TikTok was a great tool to encourage viewers to sign up for the company’s streaming services, such as Shudder or AMC +. “It has not proven that it is this tangible threat that is taking people away from our platforms,” she says. “In some ways it is the opposite.”
There is a subset of media companies that do not need a wake-up call about TikTok: Technical companies have been paying attention to TikTok for a long time. Now they are giving it the ultimate compliment by copying its format (and using its videos) for their own TikTok clones like Facebook and Instagram’s Reels and YouTube’s Shorts. Facebook is apparently also going to revamp its main news feed to be more TikTok-y.
The technology companies also tell investors that they are paying attention, and are increasingly vocal about it on earnings calls, according to Michael Nathanson:
Meanwhile, Netflix co-CEO Reed Hastings has been pondering TikTok’s potential as a “replacement threat” to his business for several years. And you can see a bit of Netflix’s TikTok envy surface in its “quick laugh” feature, which gives you a never-ending stream of funny / funny tracks from Netflix comedies in its phone app.
But just seeing the problem does not mean you can solve it, as many companies have learned during the digital age. And TikTok’s big ambitions are growing: Initially, you could only post tracks that ran for a few seconds on the service; now it’s up to 10 minutes. TikTok has focused its eyes on moving past the phone, to your paired TVs, where you are watching an increasing amount of video. If it works, it will compete even more directly with the streamers and networks.
I can think of one possible solution for the established media companies: hope the US government leaves them out.
While the Trump administration’s attempt to ban TikTok in 2020, or at least to force it to sell to a US bidder, was overturned and transparently jingoistic, there are many thoughtful people who are concerned about TikTok’s presence in the US , and think it should not be here.
One argument focuses on the potential for misuse of private data, as Chinese-owned technology companies ultimately have to account to the Chinese government; another focus on the fact that TikTok could be an enormously powerful propaganda tool if the Chinese government wanted to use it for that reason.
“Donald Trump was right, and the Biden administration needs to finish what he started,” my former colleague Ezra Klein wrote in the New York Times last month. A jaw-dropping sentence. But once you understand what TikTok is and can be, jaw-dropping ideas do not seem so wild.