The rise of short video social media-TikTok

TikTok's business model and cultural influence

TikTok
TikTok

Abstract

TikTok, as a social media platform dominated by short videos, has rapidly risen globally. Its emergence not only provides a new business model, but also promotes the development of the network economy, and it also plays an important role in the field of cultural communication. This article will focus on the transformative impact of TikTok in the cultural and economic fields, and critically analyze existing economic models and cultural forms.

The first part of this article will introduce TikTok’s historical development, operating model, and related companies. The second part focuses on the business model of TikTok and what kind of changes this model brings. The third part will study the TikTok ecosystem, its cooperation, and competition. The last part analyzes the cultural significance and change of TikTok.

 

Historical development and operation

TikTok is a very popular short video app, which provides a new form of interaction for social media. It was first released in 2016 but only in China until it was launched overseas in 2017. TikTok initially positioned the platform as a social app based on short videos, where people can share their lives and hobbies. At the beginning of the launch, the TikTok team was committed to exploring the characteristics of mainstream target users. They didn’t spend too much money on operations but continued to polish the product around the core functions of the product. For example, adding a variety of special effects, filters, stickers, and shooting techniques to continuously improve the sound and picture quality, making video loading and playback smoothly, and video shooting simpler and more interesting.

Figure1:TikTok special effects 1
Figure1:TikTok special effects

 

In the early stages of development, most of TikTok’s audience was young, and the video style was relatively single due to the time limit. Most of the short videos are cool videos shot with mirrors, special effects, and filters. After continuous optimization and increased marketing efforts, TikTok has accumulated more users, and the video duration has been extended from only 15 seconds to one minute. This has become the key to TikTok’s transformation. The extension of video time makes the style of short video no longer single and limited. A large influx of users of different ages has attracted a large number of micro celebrities, news media, and celebrities. TikTok’s operation mainly relies on users to produce content and dissemination, while micro celebrities and celebrities have a large number of fans and audiences, which is more conducive to brand promotion. Since then, TikTok has become the most active short video app in China, surpassing “Kwai,” the Chinese company of the same type that competes most with it. At the same time, the number of TikTok users continues to rise globally.

Figure 2: TikTok global user growth data
Figure 2: TikTok global user growth data
Figure 3: TikTok various data comparison
Figure 3: TikTok various data comparison

 

Online business model

Social media can provide users with free information storage, management, distribution, query, and provide entertainment and services, but the collection of users’ personal information is their ultimate purpose (Martin, 2019). Through the analysis of the collected data and targeted advertising on the user’s screen, this is a lot of social media business models (Martin, 2019). TikTok’s business model is similar to that of social media platforms such as Facebook. They both use analysis of user data to place advertisements to obtain profits (Martin, 2019). But the difference is that most of TikTok’s advertisements originate from the users themselves, and a new business model has been formed through cooperation. However, not all users can endorse advertisements. Brands often choose appropriate micro celebrities for product promotion based on the number of fans and user types. For example, if a business wants to promote a cosmetic product, it needs to find a micro celebrity who specializes in making makeup videos, and the endorsement fee is directly linked to the number of fans. Therefore, micro celebrities are the core of TikTok’s economy. In the early stage of operation, TikTok recruited about 300 micro celebrity seed users to create unified training video content. Excellent short video works are the key to gaining a large number of fans and attracting more users to spread and consume. TikTok’s commercial operations can be roughly divided into two parts. On the one hand, the celebrities and micro celebrities are invited to join in order to encourage their fans to use and consume. On the other hand, a “decentralized” approach is adopted to encourage ordinary people to actively participate in video creation.

Micro celebrities gain more attention by producing excellent video works to establish “Self-branding”. “Self-branding” is a unique public image established by individuals in order to develop business interests (Khamis et al., 2017). Micro celebrities with “Self-branding” also have more commercial value for advertisers and media platforms. Therefore, “in economics, both platform companies and users are the intersection of a two-sided market where two groups of users benefit from each other” (Martin, 201). The media platform maximizes this mutual benefit, because compared with celebrities, the endorsement cost of micro celebrities will be lower, and the benefits brought by micro celebrities will not decrease. On the contrary, TikTok also provides a good “employment opportunity” for users, and its core interests encourage users to publish better content. In other words, TikTok has formed a virtuous economic cycle in business development.

Figure 4: TikTok Economic Cycle Diagram
 Figure 4: TikTok Economic Cycle Diagram

The two key points that are very important to support this virtuous circle are “centralization” and “decentralization.” This is also the recommended mechanism for traffic algorithms on many media platforms. The “centralized” distribution mechanism relies on machines to judge the content and recommend the content creator’s video to people who may be interested in the content (Zhang et al., 2019). The “decentralized” distribution mechanism requires users to rely on their own judgment on the video cover and title to decide whether to open the video for viewing (Datta et al., 2010). In other words, the “centralized” distribution mechanism is easy to make micro celebrities more famous. If a content creator makes a hit video, the amount of exposure he can get and the speed of gaining popularity will be very fast. The flow of the “decentralized” distribution mechanism is more even. Even if a high-quality content is recommended to the homepage by the “same city” and “nearby” recommendation mechanism, it will be limited to users’ self-selection. The probability of a video being opened by users is much lower than that of a centralized distribution mechanism, and it is relatively difficult to increase fans. However, precisely because users have the freedom to choose their favorite content, fans are relatively more sticky. TikTok integrates these two algorithms, and while absorbing benefits, it also gives users some room for development.

 

Competition and cooperation

Competition and cooperation are part of all social platform ecosystems. Competition makes platform companies more committed to developing services that satisfy customers in order to attract users. Cooperation can complement each other’s strengths and maximize the interests of partners. Before TikTok was officially launched, “Kwai” was the most popular short video media platform in China. Later, due to the appearance of TikTok, most of the users were preempted. However, “Kwai” is still a strong competitor of TikTok, because “Kwai” first appeared in the market and has a certain audience base. According to the data, “Kwai” can still surpass TikTok in some data.

Figure 5: Kwai and TikTok comparison chart
Figure 5: Kwai and TikTok comparison chart

Competition and cooperation are part of all social platform ecosystems. Competition makes platform companies more committed to developing services that satisfy customers in order to attract users. Cooperation can complement each other’s strengths and maximize the interests of partners. Before TikTok was officially launched, “Kwai” was the most popular short video media platform in China. Later, due to the appearance of TikTok, most of the users were preempted. However, “Kwai” is still a strong competitor of TikTok, because “Kwai” first appeared in the market and has a certain audience base. According to the data, “Kwai” can still surpass TikTok in some data. This kind of competitive relationship is benign, and for the market, competition also gives media companies more room for development. For users, competition can improve the service quality and continuous innovation of media platforms, and reduce the compulsory marketing of platform companies due to monopoly (Hanna et al., 2011).

The reason why TikTok can surpass “Kwai” to become an influential short video social media platform is inseparable from the cooperation with brands and platforms. TikTok’s biggest cooperation platform is “Taobao”. Taobao is an online shopping platform owned by Alibaba and the online shopping app with the largest transaction volume in China. Most of the products recommended by micro celebrities on TikTok come from Taobao, and a link to quickly jump to the product page will be provided in the lower left corner of the video page. Taobao uses TikTok’s media platform and micro celebrity endorsements to advertise products, and TikTok makes profits through advertising. For the two platforms, this is undoubtedly a win-win cooperation.

Figure 6: Taobao link
Figure 6: Taobao link

 

Cultural influence

Social media has become an important way to express ideas and spread culture, and people have a deeper understanding of different cultures through platforms. TikTok not only has a huge user group, but also video content is diversified, which provides favorable conditions for the development and dissemination of culture. However, a variety of video content and the transmission of ideas often lead to complex results, and TikTok also has the advantages and disadvantages of cultural transmission. From a favorable point of view, TikTok has users all over the world, and people can conduct effective cultural exchanges and dialogues through media platforms, so that people can have a deep understanding of the culture and history of different countries. The video can record and display the traditional festivals, national culture, art, food, etc. of various countries more realistically and also allows people to browse the scenery and buildings around the world without leaving home. Therefore, from this perspective, media platforms can broaden our cultural horizons. However, the downside is that the spread of some ideas may have a negative impact on the growth of minors. Due to the complexity of TikTok’s video content, some videos that have no connotation, are pornographic or convey improper values will also flow out. For minors who have no self-control and precise judgment, this will lead to imitating, admiring and indulging in video content, which will affect the thinking of minors.

 

Conclusion

TikTok has developed a new business model, making the micro celebrity economy an important part of online commerce, and at the same time providing the public with a platform for display and online “job opportunities.” TikTok’s business ecosystem redefines the relationship between users, platforms and advertisers, and makes it a virtuous circle. From this it seems that users are no longer just free “labor” “capital exploitation” by advertising and media companies, but short video authors who can benefit from excellent video works. TikTok is also China’s most influential social media platform in the world, promoting cultural input and output. However, TikTok is also controversial in many aspects, and vulgar video content can also cause various negative effects on minors. TikTok is also banned by many countries, and the reasons for this are more related to the political field and the relationship between countries.

 

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