TikTok has become to one of the most popular global short video-sharing platforms in these years, the emerge of TikTok illustrated a transformative innovation of the internet. TikTok as one of the fastest-growing apps in the globe, which attracted more than 440 million daily active users in January 2020 (Statista.com). TikTok has successfully entered the global digital market, and it has brought transformative effects on our understanding and uses of the Internet.
This paper is divided into five sections:
- Basic introduction of TikTok;
- Historical development of TikTok;
- Business model;
- The social ecology of TikTok;
- TikTok as transformative innovation in the digital era
The picture shows: The logo of TikTok is displaying on the TikTok mobile app. By Solen Feyissa. Licensed under CC BY-SA 2.0.
- Introduction—What is TikTok?
TikTok has revolutionised the personal video sharing culture among youth across the world with a business model that has no strong competitor. TikTok as one of the most popular global social media platforms because every ordinary user can create and publish their content through short videos (Herrman, 2019). TikTok has become to the fastest-growing apps worldwide because it introduced a new way for people to interact with each other online (ibid.). This paper will discuss how TikTok become one of the fastest-growing apps worldwide and critically analyse its business model. I will also discuss the challenges this app has faced censorship, regulation and bans across the world. Users can create “challenges” on TikTok that anyone can engage in. The users of TikTok covers all age groups, and various themes of short videos are included (Dsouza, 2020). There are less short video-sharing platforms that provide media library for users to manage their sources. However, users can use common media sources or film by themselves with TikTok (Akenzua, 2019). Moreover, TikTok can help the users to develop their ability to create short videos that the users are able to film, cut clips, add filters and leverage sophisticated AR technology by themselves. It seems even ordinary people can become excellent short-video creators or social media influencers through TikTok. TikTok makes profits through its advertising platform, and live commerce, which refers to a combination of social media platforms and e-commerce (Ruether, 2019).
- Historical development of TikTok
Douyin is a popular Chinese music creative short video platform and it was the predecessor of TikTok. Douyin was hatched by ByteDance, and it was launched on September 20, 2016 (Herrman, 2019). TikTok is recognised as a global version of Douyin. Douyin has become popular in the majority of Asian countries in the first stage. Since ByteDance launched TikTok in 2017 with a combination of Musical.ly, it has become to one of the most profitable music and short-video platform in the globe (Gayton, 2020). According to Statista.com (2020), TikTok was downloaded more than 738 million times, and it was in the top 10 most downloads applications on Google Play, Android, and Apple store. Until 2018, more than one billion downloads of TikTok has made its’ number of monthly installs surpassed the most popular global social media platforms, such as Snapchat, Facebook, YouTube, and Instagram. In January 2020, the market valuation of ByteDance reached to 75billion US dollars (Statista.com).
(Figure 1. Most popular content themes on TikTok in the globe of June 2020, categorised by hashtags. Statista.com. 2020. https://www.statista.com/statistics/1130988/most-popular-categories-tiktok-worldwide-hashtag-views/ Some rights reserved.)
Due to TikTok was combined with Musical.ly, a lot of music sources are provided freely for its ‘users (Ting, 2019). Music short videos on TikTok as media content on the majority of social media platforms, the users enjoy the experience of creating short videos by themselves (ibid.). TikTok is available to download and install in over 150 markets and also available in 75 different languages (Desouza, 2020). TikTok was banned in some countries and regions because their government concerns about some of the inappropriate content might be displaying on TikTok. TikTok was banned by Indonesian government due to “inappropriate content”, and the ban was cancelled after TikTok promised to delete uncomfortable content and monitor sensitive content (ibid.). TikTok also can recommend short videos that the users might like based on what they browse or search for frequently (Tillman, 2020). Since ByteDance is an AI technology-based company, the introduction of AI technology into social media platforms provided users a “feeling of freshness” (Ting, 2019).
- A current issue with TikTok operating in the United States
The United States government announced that they would ban TikTok because they believed TikTok will bring threats to their national security (Swanson, McCabe & Nicas, 2020). ByteDance has been negotiated with Oracle and Microsoft for reducing the US government’s concerns about user’s privacy (The Guardian, 2020). As the United States government claims that TikTok is collecting and using their citizens ‘private data, TikTok is required to stop its’ operation in the United States (BBC.com, 2020). TikTok responded that it has not illegally collected or share its’ users’ data, and then TikTok sued the United States government over its ban (Sherman, 2020). TikTok also indicated the ban will occur job loss and imbalanced digital market in the US (ibid.)
- The business model of TikTok
A Chinese technology company ByteDance has ownership of TikTok. TikTok making profits from its’ advertising platform and live commerce (Ruether, 2019). Live commerce is a revolutionary business model in the digital era (ibid.). Through social media platforms to sale products as the main trend in China. TikTok as one of the most popular short video platforms, which attracts a lot of audiences to watch live commerce. The audiences are able to place orders through the links of live commerce on TikTok, there is no need for other platforms to make payment (Matsuda, 2020). The process of introducing products until payment approved is happening on a short video platform, which is unprecedented. The revolutionary business model has brought transformative effects on the market. Disruptive innovation represents a new emerging business model that creates profits through platform operations (Shaughnessy, 2016).
Bytedance is an unlisted technology company with a market value of $1 billion USD, and it is still trying to gain more competitive advantages by expanding its advertising business (Matsuda, 2020). Merchants promote sales by inviting celebrities to live selling their products on TikTok. Through a combination of e-commerce, celebrity effects and live broadcast, the merchants can save the cost and increase the amount of interaction between audiences and celebrity, therefore improved the sales efficiency (Ding, 2020). Since the rapid development of e-commerce and live broadcast, many people have been trained to be professional e-commerce sales anchors. Their workplaces are e-commerce platforms and social media platforms, like TikTok. This new economic form is defined as an Internet celebrity economy (ibid). TikTok helped to develop and used the combination of e-commerce, celebrity effects and live broadcast to make profits, and this new business model stimulated consumption both in domestic and foreign markets.
- TikTok’s social ecology
TikTok is owned by ByteDance, which is an AI technology company in Beijing, China. TikTok has launched a marketing partner program, which links up 20 technology providers with advertisers (TikTok.com, 2020). There are four services will be provided in this partner program: Campaign Management, Creative Development, Branded Effects, and Measurement. This program is for helping those technology providers to create and measure their campaigns, and advertisers will provide advice to optimise their campaigns. The partners in this program include Bidalgo, Bidshake, Sprinklr, WinClap, and MakeMeReach (ibid.). The partner for the online sales department is Wangfujing Group, which is one of the department store giants of China.
As TikTok is a short-video platform, majority of its competitor are social media platforms, such as Facebook, Instagram, YouTube, WeChat, WhatsApp and Kuaishou (Craft.com, 2020) Kuaishou is one of the top competitors of TikTok in China, and Kuaishou allows the users to share short videos and photos. (ibid.). The top business competitors are Alibaba and JD.com., who are e-commerce giants in China (Matsuda, 2020). Alibaba and JD.com occupied 80 per cent of the market, TikTok is facing the virtual duopoly of these two e-commerce giants (ibid.). Regulators of TikTok are the state government where TikTok operating as the regulators of it. Regulations on social media platforms are different in different states, and TikTok chooses to remove sensitive content based on state government regulations and local cultures (TikTok.com, 2020). The suppliers of good that sales through live commerce on TikTok is the partner merchants and Wangfujing group (Matsuda, 2020). The users of TikTok are from where TikTok operating, and the users of TikTok covers all age groups (Dsouza, 2020).
- A diagram for showing the social ecology of TikTok:
- Why TikTok is a transformative disruptive innovation in the digital era?
The shifts of the economic power technology companies can be seen as part of digital capitalism, and information capitalism (Martin, 2019). Multinational corporations to use digital technologies to expand the global market and create an expansion of its informational products and services (ibid.). TikTok is one of the IT companies that commodified information and social interactions through the network. Social media users create communities on platforms, and they share information in those communities. With the development of science and technology, the core of human’s social interaction has been transferred to the Internet, and the value of network interactions is linked up with the economy (John, 2018). TikTok creates a platform for users to interact with each other, the users of TikTok are both content creators and consumers. TikTok has uses its advertising platform to attract more users for increasing its users’ digital engagement. It is a new business model to expand users’ digital participation through advertising on the social media platform (Voorveld, 2018). Platforms are able to analyse users’ consumption participation through their engagement of social media platforms (ibid.).
In the era of net neutrality, the approach of government regulation has changed. The design of a social media platform is for maximise the liberty of internet users and attempt to limit the power of government regulations and platform providers. (Pickcard & Berman, 2019). TikTok is regulated by the state government of where its operating, and TikTok has different standards to measure its content with various regulations models in different states. The governments through social media TikTok for surveillance is being controversial, some citizens believe it is a violation of digital rights and others regard it as a guarantee of internet users’ security (Zuboff, 2020). TikTok chose a neutral position between government regulation and users’ privacy (Nicas, Isaac and Swanson, 2019). As it claims, it will not provide users’ data to any government, but it promised that it will not display illegal or politically incendiary content to its users (ibid.)The picture shows the TikTok app in Apple Store. Source from: CNN.com. https://edition.cnn.com/2020/09/25/tech/tiktok-us-ban-latest-intl-hnk/index.html Some rights reserved.
The technological innovation of TikTok has also changed the affordance of cultural cognition. The users can experience the combination of short video and quality music that provided by TikTok (Stokel-Walker, 2020). Higher speed communication technology improves the speed of short video transmission and video production tools. Intelligent communication equipment satisfied the demand of mobile scenes. Through the innovation of interfacial design, the users are encouraged to actively present their daily life with short music videos (ibid.).
TikTok as one of the most significant transformative innovation of the internet in the digital era. Firstly, TikTok has introduced a new way of social interaction on the internet, and it has provided a special experience of creating short-video and quality music for its users. Everyone can be excellent short-video producers with easily controlled tools and attractive music that provided by TikTok. Besides, TikTok uses a new business model which combines live commerce and e-commerce on social media platforms and improves the development of the Internet celebrity economy. Moreover, Tik Tok is trying to find a neutral position between government regulations and users’ privacy for providing a good experience for both of them. In conclusion, TikTok brings transformative effects on the human world, through the Internet, politics, cultures and economic system.
This video is about the TikTok operating model and the reasons for its huge global success. Published by Learn Online Video, in 2019, What is TikTok? AND How does it work? TikTok Explained for beginners. Source from: YouTube.com. https://www.youtube.com/watch?v=DYMmHIOD7wA.