TikTok faces a critical challenge in the United States. Parent company ByteDance has until January 19, 2025 to disassociate itself from the short video app, or else the app could be banned. This scenario, while complex for TikTok, could open the door for other social platforms to take advantage, especially Meta.
The Opportunity for Other Social Media
In the US, TikTok has more than 170 million users. If its ban is confirmed, these users will have to look for alternatives to continue creating and sharing content. Platforms such as Meta, YouTube and Snap are positioned as the main beneficiaries. As they could attract these users in search of a similar space.
Jasmine Enberg, an analyst at eMarketer, argues that the exit of TikTok would destabilize the social media landscape. To favour these platforms at the expense of content creators and small businesses.
The impact of the ban would be severe, especially for small businesses that rely on TikTok to promote their products. According to TikTok estimates, these companies could lose more than $1 billion in revenue, while content creators would see a drop of up to $300 million in monthly profits.
Lessons from the Indian Ban of TikTok
India banned TikTok in 2020, and its experience provides a model for what could happen in the U.S. In that country, after TikTok‘s exit, new short video platforms such as Chingari and Moj emerged, although none managed to overtake Instagram, which consolidated its position as the most popular network for similar content.
This case demonstrates that, although the gaps generated by the exit of a platform may be exploited by new players, the large platforms, such as Instagram and YouTube, are the ones that in the long term tend to dominate.
Economic Impact and Challenges for Competitors
TikTok has not only been popular for its content, but has also had a significant economic impact. In 2023, the app contributed $24.2 billion to the U.S. economy in terms of advertising and marketing, in addition to generating $8.5 billion in the country’s Gross Domestic Product.
While banning the platform could open up space for new players, competitors face the challenge of matching TikTok‘s sophisticated algorithm, which has been key to its global success.
TikTok is currently in a legal battle to avoid its ban. Recently, an appeals court rejected an attempt by ByteDance to temporarily block the law that would force the sale or shutdown of the app in the U.S. Now, the company will appeal to the Supreme Court. TikTok defends its position, assuring that US user data is not sent to China, but remains on servers located in the US.
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