With the rapid development through the technology promotion and the internet innovation, TikTok surpassed classic apps such as LINE and Google Map, and it has repeatedly topped the App Store or Google Play total list of downloads. TikTok is unique and attractive for most people, because of the short video contents with music, and people also can entertain and communicate with other people. TikTok builds a community to share and create. With focus on the role of internet, this essay will present a critical analysis on TikTok and its creative contents and regulation on the relevant industry. The first part will introduce the operations of TikTok, and how these operations make the transformative effects through internet, while the second section will examine the development and business models of the TikTok. The internet ecology will be presented in section three. Lastly, there is some critically analysis on TikTok business model.
What is TikTok?
TikTok is a short video social platform owned by Bytedance, it also known as Douyin in mainland China (Mumbai, 2019). TikTok is an app that allow users to create their own short videos, synchronize songs or perform comedies through a database of music, effects and songs (Mumbai, 2019). The most significant difference between TiKTok and other social media platforms is the length of video. TikTok only allowed people post the video in 15 seconds, which requires the most attractive and wonderful content shown through the video. Due to the creative content and short video form, TikTok brought the transformative change on the content creativity and vivid form presentation. Moreover, TikTok is not a regular social media platform. It is a combination of streaming media platform, messaging app, social media app, and the best part is the meme generator. Overall, it provides a very interesting experience for both viewers and content creators.
video introduce the TikTOK
The revolutionary business model of TikTok
Speaking of TikTok, Musical.ly has to be mentioned (what is TikTok, 2019). Despite the rapid development of the mobile Internet, the track of social media products is crowded with new products, but the video is the accepted direction. With the development of Internet culture to entertainment content, Musical.ly was made and highly recognized by young American users by virtue of its trendy product concept, with 240 million users at its peak. After the short video became popular, more and more large companies joined in. In September 2016, ByteDance borrowed from Musical.ly’s operating model and launched Douyin, a product that leads the current Chinese short video trend in China, and it is rapidly increasing with domestic resources. ByteDance’s ambitions have never stopped in the domestic market. In May 2017, ByteDance launched Tiktok, which was an international version of Douyin. In November of the same year, ByteDance bought Musical.ly at a price of up to $1 billion.After the acquisition, ByteDance merged the TikTok international version previously launched in Southeast Asia, Japan and South Korea with Musical.ly, and unified it into TikTok.
Picture showing the combination of TikTOK and Musical.ly
source: Tom Newmen
Since its release in 2016, TikTok has a huge user base. Like Snapchat and Instagram, TikTok’s initial audience is mostly young, but it changes over time. The app has recently surpassed 1 billion downloads. According to the huge amount of users, the TikTok has unique business models attract more people to download and use it. There are three main business models in TikTok. First of all, running advertising is the main business model in most social media platforms. As for TikTok, advertisement also is the main business model. Based on the huge user base, many businesses are willing to put advertisements on TikTok in the form of short videos so that more people can see and buy goods. Not only that, but merchants will also advertise products through influencers or celebrity effects by TikTok, because an influential person is someone who has the ability to influence the purchasing decisions of others due to their popularity, credibility, or relationship with the audience. TikTok is where some people invest time and effort to build an online reputation in order to become an influencer. Furthermore, influencers is one of the elements of TikTok business model. At the same time, TikTok has also reached cooperation with many influencers to attract more people to download and use TikTok through their fans and influence, thereby expanding the market share of TikTok. Besides influencers are actually a group of creators of high-quality content, there are too many talented singers, musicians, comedians and other content creators in the TikTok. These people are the reasons why TikTok can received the successful development.
Moreover, the combination of online shopping platform and live broadcast is the business model in the TikTok. In fact, the real-time streaming on TikTok mainly revolves around music performances (whether verbal synchronization or live performance). TikTok users can purchase “coins” with real currency through in-app purchases. Audiences can then use the coins (and other derivative in-app currencies) to lean towards TikTok creators, actually giving performer a small amount of real money to thank for creating some great live content. TikTok passes 80% of the tip value to the person conducting the live broadcast to establish own account. But live broadcast also attract the online shopping platforms to sell products through the live broadcast room. Due to the demanding on online shopping has increased, TikTok combined the live broadcast and online shopping platforms. And most of hosts of the live broadcast are influencers or celebrities. When audience enter into the live-broadcast room, the host will show the products through the package, functions or feeling of using. The online purchasing link also shows below for audience who is interested in this products, hence, audience can buy the products through the live-broadcast room. In Douyin, this business model has formed a mature online shopping industry, the online shopping platforms, such as, TaoBao, Jingdong made a lot of money.
The ecology of the TikTok
According to a report by Sensor Tower, a global app authoritative data company, in the four quarters of 2019, except for the second quarter, TikTok fell to the top three thrones by one place, and the remaining three quarters ranked “the most downloaded apps in the world.” “The top three, this list combines the global Apple and Google application stores. By 2020, TikTok has been downloaded more than 2 billion times. With the rapid growth of TikTok, it has already touched the interests of other social media platforms, which are top players in the international market. In 2016 and 2017, Facebook officially talked to musical.ly about the acquisition, but it ended in failure. Zuckerberg made frequent moves, and successively launched a number of short video products imitating TikTok, such as Lasso, Clips, Reels and other products or functions, but it has never been able to shake TikTok’s position.
In addition to competitive pressure from peers, TikTok is still under pressure from governments. In 2019, India used TikTok to “encourage pornography, which is harmful to children”, and completely removed it from the Google and Apple app stores in India. After a lot of financial and material resources had consumed, TikTok was able to relaunch in India. In October 2019, the United States began to review TikTok with the risk of collecting user data, thereby threatening its national security. However, in July 2020, TikTok was facing the biggest crisis. The Trump administration threatened to ban TikTok apps from entering the US market. Although the international environment in which TikTok is located is not friendly, TikTok ranked first in global downloads in the October rankings just published.
picture showing TikTok ranked the first place
source: Sensor Tower report of the top app download in October, 2020
ByteDance which established the TikTok is a Chinese high-tech company that applies artificial intelligence to the mobile Internet field. As a content output company. In fact, TikTok is not the first product of Bytedance. In 2012, Zhang Yiming who is the owner of Bytedance created Toutiao. Toutiao announced investment to subsidize short video creation. After independently created and ran UGC short video platform Volcano video and Douyin short video. That was the foundation program for the TikTok. With the addition of more products, ByteDance is already a mature and independent Internet content company.
The diagram below is the TikTok ecology:
Source: Qinling Du
Exploitation on the creative labor
TikTok brought some transformative effects to society, it change the way people entertain and communicate in some fields. Furthermore, TikTok also create job opportunity for young generations. Due to the creative environment and interesting content, TikTok attracts many young people work in this platforms, because most of the young people want to get successful through the TikTok and to be an influencer, using the influence and celebrity effect to make money. In TikTok, the increase in the number of video views and the number of fans is the motivation for the work of content creators. This requires the creator labor to create the interesting and attractive contents in the platform. But the reality is there are risks in the career of TikTok, in other words, most of the creative labor suffered the exploitation in TikTok. First all, most influencers in the TikTok are doing a stable job in reality to support all expenses for making videos on TikTok, including clothing costs and equipment costs. Moreover, Many big brand sponsorships have shifted their focus to micro influencers with 100,000 followers (Gurley, 2020), which also makes the cost of becoming an influencer lower, resulting in only a small amount of remuneration for creative labor in TikTok. Lastly, unlike other social media apps (such as Instagram and YouTube), TikTok has not yet established a profit model for its influencers. Influencers contributed creativity and shared the attractive content in TikTok, at the same time, these contents help the platform to attract more views and downloads for TikTok, but these influencers did not receive the reward they deserved, that is an exploitation for the creative labor.
TikTok is global social media platforms because of its unique short video content and attractive form. It builds a brand new community to entertain and communicate. With the development of TikTok, running advertisement is still the main business model to make the profit, but the combination of live broadcast and online shopping platforms can develop in a long term. Although TikTok’s downloads surpassed many top social media, it also received pressure and competition from its peers, which are the challenges and opportunities. TikTok has many aspects which need to improve, the exploitation on creative labor shows the unsound management mechanism, hence, TikTok should establish a profit model to award the creative content creator.
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