The official position of members of US Congress is that Chinese-based ByteDance, the owner of TikTok, represents a threat to American security both because of data privacy concerns and the propagandistic potential of the platform.
A law passed by Congress and signed by President Biden April 24 requires a sale of the American side of the business to a non-Chinese owner by January 19, 2025. Failing that, Bytedance’s popular app will be blocked in the US.
The official position of ByteDance is that they would prefer to shut down the business rather than sell it, and a lawsuit brought May 6th seeks to achieve their aim of blocking the new law in US courts first.
To an extent largely invisible to old people, (fyi my definition of “old people” in this context is anyone over, say, age 21) TikTok is the culturally dominant force of our times. So this will be interesting
Universal Music’s reaction
When mega pop star Ariana Grande wants to launch a hit song, music promotion business professionals know its best bet is to drop marketing dollars on TikTok creators to push music and dance trends, to create buzz for the new music.
Deoz Wilson, an agent for TikTok influencers at RedXTalent, received some of those dollars from Universal, Grande’s music label, in April.
He in turn distributed money to the influencers he represents, who he refers to as “creators.” Universal paid $1,000 for example for San Antonio-suburban teen Ryane Roy to create a short dance video to the new Ariana Grande music.
Roy is a 15 year-old just finishing up ninth grade this month, who also happens to make tens of thousands of dollars per year as an influencer on online platforms. Roy built her online business originally on TikTok with a combination of dance and relatable lifestyle and fashion short videos.
Ava Lewis, another suburban San Antonio teen and real-life friend of Roy’s who has built her own following on TikTok and joined Wilson’s team of influencers last year, also received payment for promoting Ariana Grande’s new music on TikTok.
The possibility of a ban has forced businesses large and small to react.
Back in February, Universal briefly pulled the rights to play its music from the platform. They had complained that TikTok paid them insufficient amounts for royalty rights, although the emerging possibility of the ban probably played a part in their decision as well. Their marketing budget then shifted to other platforms like Instagram.
A TikTok ban of course also threatens the businesses of young entrepreneurs like Wilson, Roy, and Lewis.
Roy reacts
Ryane Roy earns money from a wide variety of revenue streams, including views on YouTube Shorts, shopping links on Amazon & Instagram, brand endorsements, music promotions, as well as paid videos on the celebrity Cameo site. While she has 285 thousand subscribers on YouTube and 153 thousand followers on Instagram, her 1 million followers on TikTok still drive the business.
“What people don’t realize is social media exposure through TikTok is many small business owners’ only source of income, and banning TikTok would be potentially taking this away from them,” says Roy.
While Roy believes the TikTok ban is both wrong and potentially very harmful to businesses like hers, she’s also adjusting to any eventuality.
“Because of the TikTok ban threats, I have been consistently promoting my YouTube and Instagram often to ensure continuity,” something she has been working toward for more than a year.
Wilson, manages Roy, Lewis, and another Texas-based influencer named Leigha Rose Sanderson, as well as a stable of other creators, and has had to adjust as well.
Wilson said “for us, our agency is adapting to the reality [of a potential TikTok ban.] We encourage our influencers to be more active on Instagram Reels and Youtube Shorts. We don’t know if the ban will become real, but we have a Plan B.
Wilson’s business was also built based on the audience-gathering potential of the TikTok algorithm in particular. As much as YouTube and Instagram are useful, they are currently no match for TikTok, in terms of driving audience views and driving the culture. Wilson says “Of course there is also Instagram and YouTube, but the reason why TikTok became so popular and successful is because anyone can become famous on their platform, because of their algorithm.”
The joke in my own family is that I sometimes become aware of music and dance trends on Instagram “Reels” which is the Meta company’s attempt to compete with TikTok. Inevitably, however, the content on Reels that Dad is aware of is weeks or months behind the trends on TikTok, at least according to my kids. That’s fine for a laugh at the older generation, but for a company like Universal it’s absolutely untenable.
Wilson explains that music industry giants like Universal cannot afford to miss the chance to hit the teen zeitgeist for music trends, which happens much faster on TikTok than any other platform.
Bowing quickly and inevitably to the power of TikTok to set the trends, Universal decided in April to reauthorize its music catalog on the platform. Wilson reports that bigger music budgets are now back, from Universal and another client Warner Music, for boosting performers among the slate of creators he represents, like Ryane Roy and Ava Lewis.
Presidential politics are also at play. As President, Trump had previously threatened to shut down TikTok. In the past year he has reversed his position. His re-election would likely help TikTok survive the current ban.
So, powerful forces may save TikTok via lawsuit or political pressure. On the other hand, powerful companies like Meta (with Instagram), Snap (with Snapchat), and Alphabet (with YouTube) would be logical beneficiaries of the ban and might be happy to see it knocked out, to their benefit.
Here’s an interesting experiment you can try with the teens in your life: You may consider them wildly uninformed about political or cultural things that you find important, but they are remarkably well-informed on the issue of TikTok’s banning by Congress. ByteDance and its supporters have made the issue impossible to ignore for the 170 million Americans on the platform. This is being portrayed by ByteDance in terms of freedom of expression, First Amendment rights, artistic creative freedom, and the trampled rights of businesses that have made TikTok their home. Maybe ask a teen in your life what they know about this, just to see if they have strong opinions? Spoiler alert: They do.
A version of this post ran in the San Antonio Express News and Houston Chronicle.
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San Antonio-area teen makes serious money with her business based on TikTok
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