How TikTok got here again to life after Trump’s threats
Last summer, TikTok seemed to be on the ropes. The company lost its CEO. Rivals stormed in. And the Trump administration seemed determined to go out of business.
Now the viral video sharing app seems to have recovered.
This month, TikTok announced an expanded partnership with Universal Music Group that will access the entire music catalog. This is a blow to LA-based arch-rival Triller.
The company, which has a strong presence in Culver City, continues to generate vibrant trends in pop culture. For example, what started as videos suggesting songs for a musical about the popular Pixar film “Ratatouille” became a real virtual musical with actor Tituss Burgess last month.
And the federal government’s threats to pull TikTok out of US app stores for security reasons because of its ties to China appear to have subsided – at least for now.
White House press secretary Jen Psaki on Wednesday did not reveal a schedule for action against TikTok or a sale of TikTok’s U.S. operations to American companies. “We are fully evaluating … the risks to US data, including TikTok, and will address them decisively and effectively,” she said.
TikTok sued the federal government last year. On Thursday, the Justice Department asked that the appeals process be suspended until new agency officials are familiar with the issues raised in the case, adding such a review “which may narrow the problems presented or completely eliminate the need for judicial review” .
Although it is uncertain how the Biden administration will ultimately react to TikTok’s alleged security threats, analysts said the developments are giving the company much-needed leeway.
“I don’t think they’re out of the woods, but I think it’s probably less threatening or seem less threatening than the previous administration,” said Ray Wang, chief analyst with Constellation Research in Palo Alto. “Advertisers are still very interested, they are still getting active monthly users, and I think that’s the most important thing.”
After a steady decline in monthly installs, TikTok saw another surge in the US in December. According to mobile research firm Sensor Tower in San Francisco, the increase was 33% from November to 5.7 million installs. This increase continued into January, with installations increasing by 5%, the company estimates.
“It is possible that the recent surge in installs was due to the predicted stability in TikTok’s situation or other variables such as marketing campaigns,” wrote Stephanie Chan, mobile insights strategist at Sensor Tower, in an email.
TikTok, which reported 100 million users in the US last year, declined to make executives available for interview.
The company’s executives have long touted their ambitions to become a cultural hub, the place where trends begin. During the pandemic, the app’s popularity soared as the folks who stuck home uploaded funny videos dancing to music or just watching the steady stream of clips for hours. The app became a platform for people to discover new music and the next big stars.
“We’ve seen everything from personal finances to cooking tips to people hanging out with their family, and all of these other trends are really starting to adapt and become part of the culture like we haven’t seen with any other platform. “Nick Tran, TikTok’s director of global marketing, said at a session at the CES virtual show last month.
The company has recruited Hollywood executives from well-known companies, including Kevin Mayer, a key architect behind the streaming service Disney +, as CEO. And it became a key force in popularizing songs.
TikTok also became a thorn in the side of Donald Trump.
Some of its users ordered tickets for a Trump rally in Tulsa, Okla., In an attempt to thwart Trump with the intent of not showing up. This may have played a role in the less than expected participation in the rally – a factor that TikTok believes led the former president to target the app.
The exponential growth was seriously threatened when Trump highlighted potential security risks due to the app’s ties to China last summer.
Trump raised concerns about China-based parent company ByteDance providing US user data to the Chinese government. TikTok says it doesn’t and will not.
Trump then issued executive orders, including calling for TikTok to sell its US holdings or to impose a nationwide ban. The Treasury Department’s Foreign Investment Committee also recommended that ByteDance divest its US TikTok operations, which led the company to investigate the sale of stakes in Oracle and Walmart to address security concerns.
Uncertainty about the company’s future drove TikTok into a potential freefall as advertisers withdrew their spending on the app, new hires worried about their employment status, and Mayer went out after three months in office when TikTok’s global ambitions were thwarted. Vanessa Pappas, the former managing director of TikTok US who became interim manager, spoke in a court statement about the damage to the company’s business.
Competitors like Triller rushed to poach popular TikTok developers to get onto their platforms, while companies like Instagram and YouTube released their own versions of short videos. On August 1st, Triller suddenly became the No. 1 app for iPhones in the US
The company is majority-owned by Proxima Media, the investment firm led by Ryan Kavanaugh, the once high-flying media mogul who previously ran Relativity Media, which filed for bankruptcy in 2015.
To reassure concerned video artists, Pappas stated in a TikTok video, “We don’t plan on going anywhere.”
So far, their message has been proven true.
TikTok and its creators challenged executive orders in court and won several legal victories that broke an app ban and challenged the legality of Trump’s executive orders.
It is unclear how the Biden administration will react or whether the company will be forced to divest its US operations.
Last week, the Wall Street Journal reported that a proposed deal for ByteDance to sell stakes in Walmart and cloud computing company Oracle was on hold. Oracle did not respond to requests for comment. Walmart declined to comment.
Right now, TikTok continues to be popular with users and brands. The company has signed contracts with major labels such as Warner Music Group and Sony Music Entertainment and recently expanded its agreement with UMG to include the entire music catalog.
“We are really excited to have our artists able to interact directly with their fans in all of these unique ways on the platform,” said Michael Nash, executive vice president of digital strategy, Universal Music Group. “Here the new is accepted, but great songs from the past are also rediscovered.”
The deal was a blow to Triller, who once envisioned replacing TikTok in the United States
Earlier this month, UMG pulled its music from Triller after the record label said the app had withheld payments from artists, a charge that Triller denies. According to App Annie, an app analytics company based in San Francisco, Triller fell to a national ranking of 957 for iPhones on Thursday.
“If TikTok had been banned, they would have had a much better opportunity to get involved,” Wang said. “When you have the content creator, you have the influencer, you win.”