TikTok

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TikTok is a popular video-sharing social network owned by ByteDance. It is used for making and sharing short 15 second to one-minute videos.[1] Known as Douyin in China, TikTok is the international version of the mobile application that was released in 2017 with similar branding as seen in Figure 1.

Figure 1. TikTok Icon[2]

Contents

Company Overview

To better understand TikTok’s platform, it is important to consider its history, parent company ByteDance, sister application Douyin, and its main features.

Figure 2.TikTok's Evolution from 2016-2020

History

Since TikTok’s inception in 2016 as Douyin, there have been three notable events that have led to TikTok’s success. These events include the launch of the application, Musical.ly merger, and COVID-19 boom in 2020 that are represented in Figure 2.

Launch

In September 2016, a short-form video app called Douyin launched in China.[3] Douyin’s popularity skyrocketed and within a year, Douyin had 100 million users and one billion video views each day.[3] In September 2017, an international version of the app, TikTok, was launched.[3] The platform quickly rose to the top of the mobile application charts in many Asian markets.

Musical.ly Merger

Musical.ly was a short-form video app launched in 2014 by Alex Zhu and Louis Yang.[3] The app allowed users to share 15-second lip sync videos. It hit the number 1 spot in the app store in the summer of 2015 and established a new generation of internet stars such as Jacob Sartorius and Loren Grey.[3] In November 2017, ByteDance purchased Musical.ly at a deal valued at $1 billion.[3] In the beginning, ByteDance operated TikTok and Musical.ly as two separate platforms but in August 2018, ByteDance announced it would merge with Musical.ly into TikTok.[3] All Musical.ly profiles were then moved over to the TikTok platform.

COVID-19 Growth

Following a popularity boost during the beginning of the COVID-19 pandemic, TikTok surpassed 2 billion downloads worldwide in April 2020.[3] Not only were more users downloading the app, but user spending increased as well.[3] The application’s popularity boost during the beginning of the COVID-19 pandemic can be attributed to the engagement and entertainment value of the app, which enables people to stay connected while physically distancing.

ByteDance

Founded in 2012, ByteDance is the world’s most highly valued private startup with a current valuation of $140 billion.[4] With its extremely high valuation, TikTok is considered a unicorn company which means that it is a "privately held company with a value of over $1 billion".[5] In November 2020, TikTok was in discussions to raise another $2 billion before having its initial public offering (IPO) on the Hong Kong Stock exchange.[6] Best known for its mobile apps with entertainment value[7], ByteDance’s current CEO is Zhang Yiming, who is also the founder of the company.[7] In 2019, Yiming was named one of the world’s most influential people by Time Magazine.[7] ByteDance controls 23% of the Chinese digital app market and its current offerings include Toutiao, Douyin, TikTok, Helo, and Lark.[7]

Douyin vs. TikTok

Launched in 2016, Douyin is the Chinese version of TikTok created by ByteDance. Both TikTok and Douyin share the same interface.[8] However, Douyin has advanced features that include a more detailed homepage, e-commerce, and the ability to upload full-length movies.[8] TikTok and Douyin completely separate entities. Depending on the user’s location, they will only be able to either download TikTok or Douyin, which is to comply with China’s censorship restrictions.[9]

Features

TikTok’s most notable features include video uploading, video editing, live streaming, social sharing, and dueting/reacting. These features combine music, video, and social networking all in one mobile application.

  • Video Uploading

Users can upload ready-made videos to their TikTok account and edit them by rotating, cropping, or changing the playback speed of the video.[10]

  • Video Editing

TikTok has many in-app augmented reality effects for its users.[10] Users can add a filter or change the colour of their hair or eyes. There are also numerous stickers and animations that can be added. A built-in library of soundtracks allows users to add sounds to their videos.[10]

  • Live Streaming

Live Streaming is a premium TikTok feature that allows video creators to go live and receive virtual gifts from their fans.[10]

  • Social Sharing

TikTok videos can be shared on many social media platforms such as Snapchat, Whatsapp, Instagram, and Facebook directly from the TikTok app. [10]

  • Dueting/Reacting

TikTok’s “duet” feature allows users to film alongside another user’s video.[10] The "duet" feature was originally a trademark of Musical.ly.[10] The “react” feature enables creators to film their reaction to a video.[10]

Artificial Intelligence

TikTok’s success comes primarily from the personalization algorithm technology that it employs. This technology can tailor each user’s experience to serve content that is the most relevant to them.[11] To better understand the technology responsible for TikTok’s success, it is important to understand algorithms, TikTok’s deep learning algorithm, and security concerns with the deep learning algorithm.

Introduction to Algorithms

An algorithm is a set of instructions designed to perform a specific task like doing something useful or solving a problem.[12] For example, a recipe is an algorithm for a dish. The first algorithms date back to 1600 BC where the Babylonians used clay tablets to keep track of grain stock and cattle.[13] In the following centuries, Arab scholars built upon the work of the Ancient Greek, Indian, and Chinese to develop more complex cryptanalysis, encryptions, and cyphers.[13] In 1843, Ada Lovelace produced the first computer algorithm which is the Bernoulli numbers formula that is used to calculate a complex sequence of numbers.[14] By focusing on the general process rather than a specific computation, scientists like Alan Turing further developed computer algorithms through the 1930s.[14] This led to the creation of what is now called the Turing Machine, a system that led to the development of computers on which we can install and run applications.[14] In 1985, Microsoft created Excel, an application that allows users to run robust algorithmic functions, beginning within something as simple as the sum function. [15] Today, algorithms also use artificial neural networks to enable the system to make its own decisions.

TikTok’s Deep Learning Algorithm

In computer programming, algorithms are designed to run the same functions and tasks with higher complexity. Computer algorithms work with input and output and they take inputs and apply each step of the algorithm to that information to generate an output.[12] For algorithms to be valid, they need to be finite, which means it needs an end for the problem to be solved. It must also have well-defined instructions meaning that each step is defined with no ambiguity, and it must be effective by reaching the desired solution consistently.[13] Basic algorithms consist of a precise list of instructions that outline exactly how tasks must be completed. Examples of basic algorithms include the multiplication function on MS Excel, the image cropping tool in MS Paint, and the word search function in MS Word.[16] The implementation of algorithms in computer programming has impacted the efficiency and productivity of many basic processes that humans have carried out in the past and continue to today. But a disadvantage of algorithms is that these functions are limited to the exact steps that an algorithm is asked to perform and, unlike humans, there is no flexibility to learn and improve.[17] However, the behavioural limitations of algorithms changed with the introduction of machine learning.


Machine learning, considered as a subset of artificial intelligence, is defined as the use and development of computer systems that can learn and adapt.[18] Unlike basic algorithms that follow explicit instructions, machine learning algorithms use statistics to find patterns in massive amounts of data.[17] This means that machine learning enables the system to run analyses of large amounts of data, also known as big data, to teach itself patterns and improve over time.[17] A further subset of machine learning, and the one employed by technologies such as TikTok’s algorithm, is deep learning.


Deep learning imitates the workings of the human brain in processing data and creating patterns for use in decision making.[19] Deep neural networks give machines the enhanced ability to find and amplify even the smallest patterns through multiple layers of computational nodes.[19] These nodes work together to inspect input data and deliver final outputs in the form of predictions.[19] Examples of these complex algorithms include Google’s search engine optimization algorithm to show users the most relevant search results and Twitter’s personalization algorithm to show users content they are interested in.[20]

Figure 3. TikTok's Personalization Options[21]

ByteDance is famous for having some of the best machine learning algorithms in the industry.[22] The TikTok algorithm uses computer vision and natural language processing technology to understand and analyze written content, images, and videos and tailors content specific to the user.[23] Figure 3 shows the TikTok account setup page that helps improve personalized content recommendations.[24]


The TikTok algorithm uses several factors to base its suggestions of short video clips:


1. User Interactions

The first and most important element in TikTok's algorithm is user interactions.[25] Similar to the Instagram algorithm, the TikTok algorithm provides users with posts that they can engage with. This content includes specific accounts that users have interacted with frequently, types of videos users have liked or shared most frequently, and most importantly, video completion.[25]


The video completion rate is the strongest ranking indicator in this category.[25] This means that if a user watches a video to completion, it is more likely to be pushed for further distribution to other feeds than the one that viewers quickly scrolled through or watched for one or two seconds.[25]


As the largest factor in TikTok's algorithm, user interaction has a significant role in determining the quality of the content, as only the most captivating content can reach the largest audiences.[25] TikTok’s For You Page, which is the interface of the application that displays tailored content to users, is classified as some of the most valuable digital real estate for content creators.[26]

2. Video Information

Given that the algorithm is more likely to push content that a user explores, the second strongest ranking category is the video information.[26] This information includes the viewing and searches of a specific hashtag or sound bite that will result in the user viewing more content with the same hashtags and soundtracks.[26]


3. Account or Device Settings

Users’ location, language preference, and device type also contribute to optimizing the user experience.[26] However, these factors do not have as much weight as other ranking signals.[26] This means that TikTok allows users to discover and be found by a global audience while also serving users content created by people in their area.


All TikTok videos, irrespective of who posts them, are shown to its interested users. When videos are posted, they are shown to an account’s followers, as well as other potentially interested viewers.[26] For new profiles, videos are shown to a small subset of users that might be interested in the content.[26] Next, user interactions with the video allow the algorithm to analyze whether or not to push the video for further distribution, through video completion rates, as well as other interactions like comments, likes, and shares.[26] A positive user response automatically makes content available for more users to see and attempts to maximize the content's exposure to its target audience.[26]

Security Concerns with the Deep Learning Algorithm

While being a powerful technology for providing personalized user experiences, the TikTok algorithm has also created issues requiring government intervention due to concerns surrounding privacy and security.

Government Intervention

Because US lawmakers and users raised security concerns in November 2019 about TikTok’s potential connections to the Chinese government, there has been a widespread push for transparency from the platform.[26] The initial fear was that TikTok’s algorithm was collecting consumer data and understanding consumer behaviour.[27] Considering the ongoing United States-China trade war, ByteDance’s image is seriously impacted if the Chinese Communist Party wields any power over one of China’s largest tech giants.[26] Before a potential ban in the United States, large technology companies such as Microsoft bid for an acquisition in August 2020 for TikTok’s American operations.[28] This deal was blocked, however, due to the Chinese government discretely adding "personalized content recommendation algorithms" to its list of export-controlled items.[28] A minority ownership deal was later made with Oracle to handle data and source code but the algorithm and technology were still owned and controlled by ByteDance.[29]

Privacy

User privacy is another security concern due to the wide demographic reach of TikTok that is further examined in the Ethical Issues section. TikTok claims that it visually scans for content that violates its rules and that its algorithm does not take into account how videos are filmed or the specific content of the videos.[26] Internal training documents released by The Intercept in March 2020 show directions for TikTok moderators to suppress videos from people deemed too ugly, poor, or disabled: rules that the company claimed were either outdated or never introduced.[26]

Filter Bubble

Due to the nature of personalization algorithms, users are at risk of entering the ‘filter bubble’, which is a world of intellectual isolation that only shows users content relevant to themselves and creates polarization.[30] Researchers have become worried that TikTok could prove to be one of China's most effective weapons in the global information war that could bring Chinese-style censorship to mainstream US audiences and shape how Americans understand real-world events.[31] For example, during the anti-government protests in Hong Kong during 2019, the hashtags “HongKongProtests” and “HongKongProtestors” were not displaying on the app, and search results were met with error messages claiming the hashtags did not exist.[31] Virality is a significant part of TikTok’s customer acquisition, making it implausible that only serious issues that reached a global audience happened to be hidden by the application.

Psychological Impacts of Social Media

Because popular social media platforms are free to join, 3.6 billion people are users of at least one social media website or application.[32] There are significant concerns around young people that are growing up in the age of social media due to their exposure to content, opinions, and points of view that could shape their perspectives in dangerous ways.[33] The randomization of what content classifies as ‘viral’ is not only due to the perceived quality of the content.[34] There is also a property of the network that changes to allow some ideas to spread but not others.[34] For many people, social media is now a medium of business, a platform to empower people and push for change, or a platform for daily entertainment. For younger people, social media is now a regular fabric of life.[33]


As a result, it is valuable to understand the relevant psychological frameworks and outcomes due to social media use. In particular, the Friendship Paradox, the Majority Illusion, the Matthew Effect, reduced attention spans, and cyberbullying are the most important concepts to consider.


The Friendship Paradox

The Friendship Paradox highlights an important issue of social media: based on the topology of networks, and how they are connected, a user’s friends will, on average, always seem to have more friends, money, or happiness than them.[33] This illusion can have serious impacts on younger generations because it appears that the rest of the world lives a better life, without exposing the realities that come with it. The message that is missed, however, is that the part of a user’s life that is publicly on display is a manufactured illusion to build their brands and grow their businesses.[33]


The Friendship Paradox is important to understand because of a major issue with social media today: influencers and celebrities can normalize a specific behaviour that can easily reach a larger audience and impact the behaviour or opinions of these people.

The Majority Illusion

In 2015, an experiment by Lerman & Co that was led by University of Southern California researcher Kristina Lerman discovered the Majority Illusion Paradox, in which an individual can observe a behaviour or attribute in most of their friends, even though it is rare in the network as a whole.[35] [34] This observation means that an individual can form a local impression that a specific attribute is a global truth, even when the reality is entirely different.[34] It is the perception created through an individual’s network, that an idea, opinion, or product is more popular than it actually is.[36]

Figure 4. The Majority Illusion Illustration[37]


As illustrated in Figure 4, when the most ‘popular’ or well-connected nodes are coloured, they impact the largest population. Hence, the nodes tend to skew the opinions of the largest number of people. The interconnectivity of the network also explains the primary phenomena of social networks, in which the key is to start with a small number of well-connected early adopters that mislead the rest of the network into thinking it is common.[34] Additionally, the Friendship Paradox is used to explain the spread of antisocial behaviour. Various studies have shown that teenagers consistently overestimate the amount of alcohol and drugs their friends consume. Lermann supports this by claiming that “if heavy drinkers also happen to be more popular, then people examining their friends’ drinking behaviour will conclude that, on average, their friends drink more than they do”. [34]


The issues of the filter bubble also align with the behaviours that are assumed to be a global truth. This alignment exists because the filter bubble gives the perception that the information an individual is exposed to is correct since the individual assumes everyone is exposed to the same information. TikTok has attempted to deal with the issues of the filter bubble within its For You Page algorithm by showing posts that are unrelated to a user. But with this effort, the app reinforces the user to keep scrolling because the user can interact with content that may or may not interest them. And that differentiation, which is very similar to a slot machine experience in Vegas, is the key to retaining the user's attention for hours on content that impacts their perception.[38]

The Matthew Effect

The Matthew Effect is the trend that over time users follow those who have more followers.[33] In the context of TikTok, this means that users with an increasing number of followers will grow exponentially over time. As a result, this effect leads to an information imbalance over time as observed in both the Friendship Paradox and the Majority Illusion. Social media has scaled up and industrialized social behaviour phenomena that have existed before the emergence of social media, but it has done so rapidly and on a global scale.

Reduced Attention Spans

Along with psychological impacts like social standing, technologies like TikTok also have a direct impact on our attention spans. The information age has changed the overall attention span of people, as found in a study from researchers at the Technical University of Denmark.[39] The research indicates that the collective global attention span has narrowed due to the vast amounts of available information today. The study showed that people today have more things to focus on but they often focus on things for shorter periods.[39] [40]
Figure 5. Research from Microsoft indicating that attention spans have been reduced over the last two decades[41]


“Content is increasing in volume, which exhausts our attention and our urge for ‘newness’ causes us to collectively switch between topics more regularly,” according to Philipp Lorenz-Spreen of Max Planck Institute for Human Development who also participated in the study.[39] The functionality of an application like TikTok embodies this issue perfectly given that the For You Page is a constant flow of a wide variety of new videos and sounds, allowing users to shift their focus anywhere from new recipes to investment strategies to dance trends.


Lorenz-Spreen and his research partner Dr. Philipp Hövel, indicate that topics become popular more rapidly, but the interest fades away at a similarly increased rate.[39] This outcome causes narrower spans of collective attention towards individual topics due to the increasing competition for novelty.[39] Further research into the attention span of people was conducted by a research team from Microsoft Canada that surveyed 2,000 participants and studied the brain activity of 112 other people using electroencephalograms (EEGs).[42] Microsoft found that since 2000, which is when the mobile revolution began, the average attention span of an individual in 2015 dropped from 12 seconds to 8.25 seconds, as illustrated in Figure 5.[42]


In the context of TikTok, reduced attention spans stem from users scrolling through images and sounds at fast speeds that repurpose reality into ironic bite-size content.[43] Heavy multi-screeners find it difficult to filter out irrelevant stimuli, as they are easily distracted by the multiple streams of media and the constant rotation of new content that they are exposed to.[43] With a significant number of influencers creating new trends, TikTok impacts multiple industries such as fashion, music, and art, but fame can decline rapidly when a new trend emerges.[44] [45] This decline in popularity poses new challenges for marketing teams trying to get new products visible to their target audiences and for educators that still use classic teaching methods.[46]

Cyberbullying

Cyberbullying, which is defined as bullying through digital media and technology, is demonstrated on TikTok through videos targeting minorities, racist videos, or through users leaving demeaning comments.[47]


Similar to other social media platforms, TikTok also has received serious cyberbullying concerns from parents of adolescents using the platform.[48] In particular, parents have flagged abusive language, comments, or messages.[48] Identifying insensitive content on the app is challenging because it is difficult to filter or monitor who sees a video, which means that content can show up on your feed at random. From a control aspect, ‘hypersexualized’ videos on TikTok can be a major concern for parents of young children.[48]


Cyberbullying is not limited to regular TikTok users and TikTok celebrities have also faced these challenges. In contrast to movie celebrities, TikTok influencers are younger and receive criticism from other users that they are not prepared to handle.[49] Young creators on TikTok are under significant pressure, given that there are millions of people that are influenced by their actions and words. Similar to mainstream celebrities, it is more common for established TikTok influencers to have managers and public relations personnel to help improve their public image.[50]


To address existing cyberbullying issues, TikTok has created resources that allow users to report bullies to moderation teams and has introduced privacy controls for comments, duets, or blocking users.[51]

Legal and Privacy Considerations

TikTok has been at the forefront of recent legal and privacy concerns due to its obligations under Chinese Security laws that could put user data and interactions on the app in the control of the Chinese Communist Party. As a result of these concerns, the app has observed scrutiny for the information that can be collected, particularly from its For You Page, which has led to legal challenges and employee download restrictions. Further, ethical concerns about user privacy have been amplified by the app’s censorship policies and its content management practices that have contributed to numerous controversies.

Data Collection and Chinese Security Laws

Chinese security laws require Chinese-based entities to cooperate with Chinese intelligence and to share user data.[52] These laws could result in users facing prosecution for content that is not approved by the Chinese government.


In response to concerns about illegal data collection and TikTok’s obligations under Chinese security laws, TikTok released a statement in October 2019 indicating that the data of its US users is stored in the United States and none of its data is subject to Chinese law.[53] Further, TikTok has pushed the narrative that the Chinese government cannot obtain user data easily due to the “gray areas” in China’s national security laws.[54] However, the threat posed by these laws has been raised by organizations such as the Human Rights Foundation which emphasize that under these laws “the police can request online platform service providers to hand over information about their users, or remove content the government deems to be ‘endangering’ national security”[55] and, therefore, serves as a threat to internet freedom. TikTok continues to say that the Chinese government cannot monitor or censor content on the platform.


TikTok left Hong Kong in July 2020.[56] Currently, TikTok does not have a headquarters, but its senior executives work from the office located in Shanghai, China.[57] Its main office that controls U.S. operations is based in Culver City, California.[58]

For You Page

Figure 6. TikTok's For You Page[59]

As shown in Figure 6, the For You Page is the first screen that a user views when they access the app. On this interface, TikTok recommends videos that are determined by various factors that include user interests that are first entered by new users, as well as adjustments to user interests changing over time.[60]


Because TikTok thrives on showing relatable, funny, interesting, and popular videos, it has suppressed posts by “less popular” users that include the physically disabled, developmentally disabled, LGBTQ, and overweight people. In defense of this, TikTok has said that the suppression of these users by its algorithm was because of their “anti-bullying policies” but many question if these are more business-related reasons rather than in the interest of protecting these “less popular” users. [61]

Employee Download Restrictions

Since December 2019, some government agencies and corporations have banned employees from downloading and using the TikTok app on work devices.

Government Agencies

The restrictions on government employees downloading TikTok began when the Pentagon sent a "Cyber Awareness Message" on December 16, 2019 claiming that there could be “potential risk associated with using the TikTok app” and that military personnel should “uninstall TikTok to circumvent any exposure of personal information”.[62]

  • In December 2019, the US Navy banned TikTok from government devices.[63] A Navy bulletin said that members with TikTok accounts who did not remove the app from work devices would be blocked from the Navy intranet.[63]
  • In January 2020, the US Air Force banned TikTok, along with other government branches such as the US Coast Guard, US Marine Corps, and the US Department of Homeland Security.[63]
  • In February 2020, the Transportation Security Administration (TSA), an agency of the U.S. Department of Homeland Security that has authority over the security of the traveling public in the United States, banned TikTok.[63]
  • In July 2020, the Democratic and Republican national committees warned staff not to download TikTok because of security concerns.[64]

Corporations

Corporations such as Wells Fargo and Amazon also introduced policies prohibiting the download of TikTok on work devices. In July 2020, Wells Fargo told employees to remove TikTok from company devices “due to concerns about TikTok's privacy and security controls and practices”.[64] In the same month, Amazon also told employees to delete TikTok from their phones, before reverting the policy on the same day and calling the policy an "error”. Amazon claimed that "due to security risks, the TikTok app is no longer permitted on mobile devices that access Amazon email” before justifying that it was an error.[65]

Ethical Issues

In terms of ethical issues, TikTok has come under focus for censoring videos that mention various topics or events, overlooking mature and inappropriate content on its platform, and using the app to promote Chinese foreign policy.

Censorship

Figure 7. TikTok Content Violation Notification[66]

Topics and events that have been especially moderated by TikTok include Tiananmen Square, Tibetan independence, criticism of China’s government, 1998 riots in Indonesia, the Cambodian genocide, and even racial injustice issues.[67] The censorship policies followed by TikTok have resulted in content being banned and categorized as either a “violation” or “visible to self”.[67] Content that is deemed a violation is deleted from the site entirely, and the user receives a notification (Figure 7) and can also be banned. But content that is set to “visible to self” remains on the app and receives limited visibility.


While many apps and social media platforms have rules and regulations, TikTok has been controversial for designing rules that seem general-purpose when they aim to remove content due to specific objectives.[67] For example, a ban on criticism of the Chinese Communist Party follows a general ban on criticism of policy or government in any country. [67]

Mature and Sensitive Content

As examined earlier, many parents of children and teenagers are also concerned about mature content and violence that can be viewed on the TikTok platform. ideos that have appeared on the app can show children lying to their parents and consuming alcohol and drugs.[68] There have also been depictions of children and teenagers acting out violent and historical events that are viewed by many as inappropriate and inconsiderate of the actual events. [69] Also, children and young adults can be observed wearing revealing clothing not suitable for their age.

Content Visibility Controversies

Figure 8. Censored: Violent Scenes from the Hong Kong Protests in June 2019[70]

In September 2019, TikTok was called out for censoring the Hong Kong protests by pro-democracy activists and for supporting the Chinese government narrative through hiding scenes of tear gas, water cannon, and street brawls like those depicted in Figure 8. Hashtags related to these protests generated a single video or an error message.[31] ByteDance defended the removal of this content by claiming that protest content can be considered as “dangerous acts” or “violence, graphic, shocking, or sensational content”, and thus could be removed according to its guidelines.[71]


TikTok again made headlines in June 2020 because it set the views to zero for the popular hashtags “BlackLivesMatter” and “GeorgeFloyd”[72], when the hashtags had actually generated over 2 billion views.[73] After users complained that these posts were being censored, TikTok apologized and claimed that it was a technical issue.[72] This resulted in a controversy of recent events that were already controversies on their own. To address this issue, TikTok established a diversity council and donated over $4 million to non-profit organizations addressing racism.[72]

National Security

National security concerns surrounding TikTok due to its Chinese origins have arguably been a key reason why the app has made news headlines and been a concern for both governments and people. Due to these concerns, early protective measures were taken by multiple governments and followed by bans and legislation on the app around the world. President Donald Trump and his administration also contributed to measures taken by the company to avoid a ban in the United States. Meanwhile, it is important to examine Canada’s contrasting response to TikTok.

Early Protective Measures

Following actions taken in late 2019 and worsening relations between the United States and China, the Trump administration continued to attack TikTok.[74] White House advisor Peter Navarro shared on television that the United States was considering outlawing Chinese apps such as TikTok and WeChat over security concerns.[75] These concerns were echoed shortly after by Senate Minority Leader Chuck Schumer and Arkansas Senator Tom Cotton.[54]

Bans, Attempted Bans, and Legislation

In consideration of national security and because of worsening relations with China, eight countries have banned, attempted to ban, or introduced legislation to restrict the use of TikTok. These countries include Indonesia, Bangladesh, India, Japan, Australia, the United States, Pakistan, and Armenia, as illustrated in Figure 9.

Figure 9. Map of Countries with TikTok Bans, Attempted Bans, and Legislation


Indonesia

In July 2018, Indonesia banned TikTok for “containing pornography, inappropriate content, and blasphemy”.[76] This was overturned a week later after TikTok agreed to censor “negative content”.[77]

Bangladesh

In February 2019, Bangladesh blocked TikTok among thousands of other sites and apps because of pornography and gambling related content on the app. [78] The app is now active again but with some censorship in place.

India

In June 2020, India banned TikTok and 58 other Chinese apps.[79] While India claims the ban is about preserving “data sovereignty,” the ban was triggered by a border clash between Indian and Chinese soldiers.[80] Today, the app remains banned in the country.

Japan

In July 2020, Japanese lawmakers announced they were seeking to restrict TikTok to prevent the Chinese government from accessing user data.[81] It is the country’s fifth most-downloaded app with an estimated 10 million users.[82]

Australia

In July 2020, Australian politicians made demands for TikTok to be banned in the country.[83] In August 2020, however, the Australian federal government decided against banning the app but continues to warn its people about the potential security concerns with the app’s connections to China.[84]

United States

In the United States, TikTok is currently pending a ban but it is still currently accessible to Americans.[85] The proposal to ban the app is currently being challenged by government lawmakers. The Trump administration defends its attempt to ban TikTok over national security concerns, claiming the app makes U.S. user data susceptible to influence by Chinese leaders. Lawyers for the U.S. government are urging the U.S. District Court in Washington, D.C., to move forward with restrictions on TikTok that are effective before President-elect Biden’s inauguration.

Pakistan

On October 10, 2020, Pakistan banned TikTok over allegations of immoral content and security concerns [86] but the ban was overturned 10 days later on October 19, 2020. [87]

Armenia

People living in Armenia have been unable to upload or watch footage on TikTok since October 1, 2020.[88] No official statement has been released by the country’s government; however, the disabling of the application is likely due to propaganda that is being spread by Azerbaijan surrounding the 2020 Nagorno-Karabakh war that lasted from September 27, 2020 through November 10, 2020.[89] The war was a conflict between Azerbaijan and the Republic of Artsakh together with Armenia over the Nagorno-Karabakh region.

ByteDance and the Trump Administration

Figure 10. President Trump's Executive Order on August 6, 2020[90]

There were concerns held by the White House that TikTok could function as a surveillance tool for the Chinese Communist Party by sharing American user data or causing other disturbances because TikTok’s parent company, Byte Dance, is located in Beijing, China.


As shown in Figure 10, President Trump signed an Executive Order on August 6, 2020 requiring that TikTok must sell its US operations to a U.S. company, such as Walmart, by September 15, 2020 or else it would be shut down in the United States. [91] If it was not satisfied, the initial order would have prohibited American companies from advertising on TikTok and app stores such as Apple and Google would have to stop offering the TikTok app. At the same time, President Trump indicated that the U.S. Treasury Department should receive an unspecified significant percentage of the sale for facilitating the transaction.[92] No significant proof has been provided by the Trump administration, although both Republicans and Democrats believe that China cannot be trusted and poses a threat to the United States.


On August 14, 2020, President Trump signed a second order extending the deadline for TikTok to sell its US operations to November 12, 2020.[93]


In late August 2020, Walmart and Microsoft together intended to purchase TikTok’s operations in the United States, Canada, Australia, and New Zealand.[94] But on September 13, 2020, ByteDance informed Microsoft that it would not complete the deal with Microsoft and instead chose Oracle to be the app’s technology partner. [95]


On September 19, 2020, President Trump approved a tentative deal creating “TikTok Global”, where Oracle and Walmart would own 20% of the company. However, this deal did not involve a transfer of TikTok’s valuable algorithm [96] which is responsible for the national security concerns held by the Trump administration. If the deal is completed, Oracle would be TikTok’s cloud provider and would be responsible for “hosting all TikTok's U.S. user data and securing computer systems to ensure U.S. national security requirements are satisfied”.[97] Meanwhile, Walmart would provide its “e-commerce, fulfilment, payments and other services to the new company”.[97] Experts such as Kirsten Martin, Professor of Technology Ethics at the University of Notre Dame, and Alex Stamos, Facebook’s former Chief Security Officer, believe that this deal has not improved the security concerns surrounding TikTok and that TikTok’s data collection and sharing practices are consistent with other tech companies.[98]


Since the 2020 US Elections in early November, ByteDance has been trying to extend the deadline of the draft deal until President-elect Joe Biden becomes the U.S. President. The deal must be approved by the Committee on Foreign Investment in the United States (CFIUS) that is reviewing the deal. On November 13, 2020, the CFIUS extended the deadline for the deal from November 12, 2020 to November 27, 2020. [99] On November 26, 2020, the CFIUS extended the deadline from November 27, 2020 to December 4, 2020 for TikTok’s US operations to be sold and to prevent a ban.[85] As of November 26, 2020, the potential deal between Oracle and Walmart has not materialized and it would require approval from Chinese regulators. [100]


President-elect Joe Biden also considers TikTok as a concern. [101] On this matter, Biden has said that “the United States does need to get tough with China. If China has its way, it will keep robbing the United States and American companies of their technology and intellectual property”. [102] It is expected that the Biden administration will work with allies to confront Chinese tech companies unlike the Trump Administration, and it will approach this tech battle with negotiations surrounding data privacy. [103]

Canada’s Response

TikTok is currently accessible in Canada. Ann Cavoukian, Ontario’s former Privacy Commissioner, and Canada’s Public Safety Minister Bill Blair believe that Canada will not ban the app.[104] Cavoukian believes that one reason the app will not be banned is that Prime Minister Justin Trudeau wants to “preserve a relationship with China” and he does not want to “do anything that may be perceived to be anti-China”.[104] Similarly, Liberal Member of Parliament Nathaniel Erskine-Smith says that a ban on TikTok would only be considered if it can be determined that user personal data is owned outside of Canada; however, he believes that government workers should not download the app on their personal devices. [105]

Implications

Significant use of the app has led to highly noticeable political and social outcomes. Because the platform attracts younger users, it assists in forming the political thoughts of these users, bringing attention to ongoing social issues, and enabling trolling which is defined by the Cambridge English dictionary as “the act of leaving an insulting message on the internet in order to annoy someone”. [106]

Political

Figure 11. Empty Seats at Trump Rally in Tulsa, Oklahoma[107]

TikTok has made headlines for its role in sabotaging a Trump rally, spreading awareness of racial injustice movements, and creating concerns surrounding its misuse before the US Elections in November 2020.


TikTok was infamously known for the mass-false registrations by its teenage users for a Trump rally in Tulsa, Oklahoma in order to keep seats empty during the pandemic that proved successful (Figure 11).[108] In the summer of 2020, the app amplified recent controversial protests surrounding race and security in the United States and around the world such as the Black Lives Matter protests. [109]


Unlike other social media platforms such as Facebook and Twitter, TikTok does not permit political ads.[109] Justifying why TikTok does not permit political ads, Blake Chandlee, TikTok VP of Global Business Solutions, said: “any paid ads that come into the community need to fit the standards for our platform, and the nature of paid political ads is not something we believe fits the TikTok platform experience”.[110] Further, he has said that “we will not allow paid ads that promote or oppose a candidate, current leader, political party or group or issue at the federal, state or local level — including election-related ads, advocacy ads or issue ads”.[110] Facebook announced it would ban political ads on its platform on October 7, 2020.[111] Facebook’s ban has been effective since the US election polls closed on November 3, 2020.[111]


Despite these restrictions on politicians and campaigns, people still use TikTok to promote their political views and their desired political leaders.[112] An example of this includes the teenager-created political channels called “Hype Houses” that engage youth with politics in a way that can appeal to them through short videos.[109] As examined earlier, filter bubbles have also been fostered through the platform and it has worked to connect like-minded people which has observed both negative and positive impacts.


In addition, TikTok was a major concern for spreading misinformation ahead of the US Elections in November 2020. Nicholas Beauchamp, Assistant Professor of Political Science at Northeastern University said this was a concern because videos are harder to monitor than text & because politicians cannot clarify “fake news” due to TikTok’s advertisement policies. [113]

Social

Figure 12. TikTok Mansion in Beverly Hills[114]

TikTok has also contributed to social implications outside of the political realm, which is especially important given that TikTok wants to be considered as a “positive, refreshing environment” that fosters creativity.[110]


As part of creating new TikTok influencers, the app has brought voices to Canadian Indigenous content creators that bring attention to issues affecting them and their communities.[115] Robyn Ottolini, a young musician from Ontario, also signed a deal with a Nashville music label after posting a song on TikTok that became viral and received the attention of label executives.[116]


Clubhouses that function as management companies for TikTok influencers have also emerged in Los Angeles and Beverly Hills.[117] These companies receive a portion of the incomes earned by these “influencers” who do not pay rent for the mansions that they live in such as the one depicted in Figure 12.[117] Instead, TikTok influencers produce content for various brands and product lines. Recently, these management companies have been listed on the stock market; however, they face limited business prospects.[117]


In response to COVID-19 deniers, a Starbucks barista posted a video on TikTok of herself making a drink with her bare hands and stirring the drink with her fingers. As a result, Starbucks launched an internal investigation. [118]

Business Analysis

To better understand TikTok’s position in the business world, it is important to consider the company’s market size, users, business model and monetization strategies, business applications, competitors, and advantages and disadvantages.

Market Size

TikTok is currently available in 150 markets around the world in 39 different languages.[119] While official numbers have not been made public, Hootsuite estimates TikTok has 800 million monthly active users, which makes TikTok the world’s sixth most used social media app.[120] With an estimated 2 billion downloads worldwide, TikTok is also the seventh most downloaded app of the 2010s.[119]

Users

TikTok’s users can be defined by their location, age and gender, and consumption behavior.

Location Demographics

Figure 13. Number of TikTok Downloads by Country[121]

Despite TikTok’s popularity around the world, 57% of the TikTok/Douyin user base is located in China.[119] Meanwhile, India had the second largest user base with almost 120 million monthly active users as illustrated in Figure 13.[121] Prior to India's ban of the TikTok app, there were a total of 323 million TikTok downloads in the country.[120] In the United States, TikTok has about 80 million monthly active users.[119] Brazil is TikTok’s fastest-growing market in terms of downloads and, in that country, there have been 54.6 million TikTok downloads so far in 2020.[121]

Age and Gender Demographics

According to Reuters, about 60% of TikTok’s monthly active users in the United States are between the ages of 16 and 24.[122] As of June 2020, TikTok has more American users between the ages of 10 and 19 compared to those between 20 and 29, as presented in Figure 14.[123] However, the number of older users is rising, which indicates that the average age of the app’s users is increasing as well.[123] In terms of gender, 56% of users are male, while 44% are female.[124]

Consumption Behavior

Figure 14. TikTok Users in the US by Age[123]

Research has found that the average time spent on TikTok is around 45 minutes and an average user session is 4.9 minutes.[119] An average session length is a good indicator of the popularity and performance of the app relative to its competitors. In comparison to TikTok’s average user session, Facebook averages at 4.7 minutes, Instagram at 3.1 minutes, and Snapchat at 1.6 minutes.[119] Seventy percent of TikTok users consume videos on the platform while 55% of users upload videos, which means that content creation and engagement levels are extremely high.[125] TikTok currently has a one-week retention rate of 26% which is significantly lower than the average retention rate of media apps, which is 43%.[119] This means that while TikTok is engaging its users today, these users could move on to the next best social media platform rapidly.

Business Model and Monetization

With TikTok’s valuation estimated to be at $140 billion, it is important to consider the app’s current business model, its existing monetization strategies that include advertisement revenue and in-app purchases, and future monetization strategies.[4]

Business Model

According to renowned Chinese investor Connie Chan, “TikTok is the first mainstream consumer app where artificial intelligence is the product. It’s representative of a broader shift.[23] The algorithm uses several factors to base its suggestions on short video clips. Since the app is available for free, TikTok’s value comes from the major user base and, as a result, it uses an attention-based business model.[126] This means that TikTok makes money by obtaining the attention of the audience. In 2019, before the COVID pandemic brought TikTok to an all-time high, the company generated $176.9 million in revenue.[127] TikTok’s revenue in 2019 contributed to 71% of the company’s all-time revenues.[127] Therefore, TikTok should expect to see even higher growth in numbers in 2020.

Advertisement Revenue

Similar to most advertising models, advertisement revenue is based on impressions which are clicks or actions taken on the advertisement. In TikTok’s leaked pitch deck, it states that advertisement prices range from $50 to $150,000 on the platform.[128] Advertisement formats include top view, brand takeover, in-feed advertisements, branded hashtag challenge, and branded effects.[129] The Branded Hashtag challenge is a feature introduced by TikTok in 2019 that allows companies to sell products associated with the hashtag directly to consumers on the app.[130]

In-App Purchases

TikTok currently ranks sixth in terms of consumer spending on apps worldwide.[120] On the app, users can purchase TikTok coins which can then be used to purchase virtual gifts for creators.[131] Creators that receive these gifts can exchange them for money of which then TikTok takes a cut. These coins start at 100 coins for $0.99 and increase to 10,000 coins for $99.99.[131]

Future Monetization Strategies

To continue its success, TikTok must improve its monetization strategy. In the near future, TikTok may roll out a music streaming service that would rival the likes of Apple Music and Spotify.[132] The app could also potentially offer a paid subscription model for original extended content.[133] Through TikTok’s partnership with Shopify, TikTok will soon be able to monetize its potential as a social shopping platform. TikTok plans to start introducing new in-app features that will make it easier for users to shop directly through the TikTok app.[134]

Business Applications

Both companies and influencers have found ways of leveraging TikTok to monetize off the video-sharing social network platform.

Companies

With the majority of TikTok’s users being highly-engaged Generation Z and Millennials, brands can use the platform to connect with the next generation of consumers. [129] There are numerous ways for brands to promote themselves on TikTok, such as the hashtag challenge. Through the hashtag challenge, brands can convert users into ambassadors through the power of “shared experience”.[129] One prominent example is Chipotle that created the “Lid Flip Challenge”.[135] The campaign drove a digital sales record and more than 110,000 challenge videos were submitted. Chipotle also became one of the most followed brands on the platform. TikTok’s algorithm allows users to discover new content based on their viewing preferences, which can assist brands in achieving fast growth and maximum visibility.[129] In October 2020, TikTok announced that it was partnering with Shopify.[136] This would allow merchants on Shopify to run their marketing campaigns directly from the Shopify dashboard within the new TikTok channel app.[136] This means that merchants can now target their audiences across various demographics on TikTok. According to Satish Kanwar, Vice President of Product at Shopify, this partnership means that “Shopify merchants —even those without a strong TikTok following of their own yet—can connect with these new audiences using content that feels authentic and genuine to the TikTok experience”.[136]

Influencers

Figure 15. TikTok Influencer Charlie D'Amelio[137]

The rise of influencer marketing is largely due to the growth of social media platforms and these influencers can make a living from making and sharing content with their followers. In recent times, influencer marketing has become superficial and inauthentic, leading to “influencer fatigue”.[138]


During the COVID-19 pandemic, TikTok has spearheaded a shift towards more genuine content by highlighting creators’ unfiltered personalities and humour not typically found on social media apps like Instagram. TikTok’s algorithm gives exposure to everyday creators who may not have large followers and reduces “influencer fatigue” by providing users with more authentic and relatable content.[139] These content creators on TikTok become famous almost overnight as their videos become viral in contrast to other platforms where it would usually take a longer time to develop a following.


Kudzi Chikumbu, Director of Creator Community at TikTok, states that “especially in this year, that is kind of interesting and wild, people are coming back to themselves and wanting to share their authenticity”.[139] This change brings about a new form of influencers, but whether they are here to stay is dependent on TikTok’s ability to motivate them to stay or they will move onto the next best platform. Being a TikTok influencer can be quite lucrative as observed in Charli D'Amelio (Figure 15), who has 100 million followers on TikTok and an estimated net worth of $4 million.[140][141] However, the bulk of this money comes from brand deals and not TikTok. In order to maintain its appeal to content creators, TikTok announced that it was launching a $200 million creator fund in July 2020.[142]

Competition

As TikTok faces an uncertain future in the United States, competitors such as Triller, Snapchat, YouTube, and Instagram have tried to take this opportunity to grow their user base. Since TikTok offers little monetization opportunities to its creators, the easier way for individuals to make money off the platform is to directly connect with brands.[143]

Comparison of TikTok and its Competitors
App Year Launched Monthly Active Users (MAU) Total Number of Downloads
TikTok & Douyin 2016 800 million 2 billion
Triller 2015 65 million 130 million
Snapchat 2011 381.5 million 75 million
YouTube 2005 2 billion -
Instagram 2010 1 billion 1.8 billion

Triller

Launched in 2015, Triller is a video app turned social media platform but with an emphasis on Hip Hop music. Users film videos of themselves rapping and use the app’s AI editing software to create professional music videos. With major celebrities such as Snoop Dogg, Migos, and 21 Savage invested in the company, Triller is more about music than TikTok.[144] Recent updates to the app allow users to share quirky videos of themselves dancing and singing, quite similar to TikTok. There is a crowdfunding feature on Triller that allows users to raise money for a cause or simply for themselves; however, the exact amount of money that creators can fundraise for themselves is unknown.[144] Amid TikTok ban rumours, the app reached number 1 on the app store and it currently has a total of 65 million monthly active users and 130 million downloads.[145][146]

Snapchat

TikTok is a video-sharing app while Snapchat is centered on photo and video messaging with short-lived “stories” that allow people to share updates that last for 24 hours. Launched in 2011, the demographic of Snapchat consists of mainly Millennials, while TikTok is geared towards Generation Z. Snapchat has 381.5 million monthly active users and 75 million downloads.[147][148] In regards to monetization opportunities for influencers, Snapchat currently does not offer any. Currently, Snapchat is working with top music publishers to allow users to add music to their snaps to compete with TikTok.[149]

YouTube

Since its inception in 2005, YouTube has emerged to become the second largest search engine after Google, with 2 billion monthly active users.[150][151] Total app downloads for YouTube cannot be determined as the app comes preinstalled on Android devices and the majority of users access YouTube via its website. YouTube is a video sharing platform that allows users to upload, rate, view, and subscribe to other user’s channels. The difference between TikTok and YouTube is that TikTok focuses on short-form videos while users can upload full-length videos on YouTube. YouTube creators have the opportunity to monetize their videos by collecting advertisement revenue and they can make around $18 per thousand ad views or about $3 to $5 per thousand video views.[152]

Instagram

Instagram is a photo-based social media platform and it is the leading app in influencer marketing with 1 billion monthly active users.[153] Influencers on the app can make around $88 to $630 per post, with top influencers having prices that may vary greatly.[154] Although Instagram has been downloaded more than 1.8 billion times globally compared to TikTok’s 1.5 billion, TikTok’s user growth has been more substantial as Instagram was launched seven years before TikTok.[155] In 2020, Instagram launched Reels that allows Instagram users to post short-form entertainment videos that directly competes with TikTok.[156]

Advantages and Disadvantages

As a mainstream application, TikTok offers many advantages that have supported its rapid growth and popularity. However, the app has many drawbacks, as well.

Advantages

Similar to YouTube, TikTok’s main advantage is that it is primarily a video-sharing social network. In comparison, Instagram can feel more overwhelming due to the number of products such as feed posts, Instagram stories, Instagram live, and now Reels.[134] Another advantage of TikTok is how it makes it easy for individuals to become content creators. Due to the randomization of the For You Page, users receive more exposure compared to other social media platforms which makes it easier for their accounts to become viral. This app also provides accessible tools and charges no fees for exposure to this broad audience. This app is accessible to all users as it does not focus on high production value. In addition, limited time or resources are needed to make videos because of the content format limitations. TikTok is accessible for users to create videos because the focus is not on high production value and, since the content format limitation is 15-60 seconds, significant time or resources are not required to produce a video.

Disadvantages

TikTok may be unable to retain people’s interests because as much as 26% of people abandon the app within a week of downloading it.[119] On the other hand, it can also be easy to overuse TikTok, leading to massive time wastage that is an advantage for TikTok but a disadvantage for an individual. With increasing numbers of people using the app, it is challenging to create consistent viral content. The challenge to stay relevant on the app may also make the app less appealing to influencers and deter them from leaving platforms such as Instagram, which is the leading influencer marketing app. As with all social media platforms, there are major security concerns and even more so due to the app’s Chinese origins. Security and safety are also a concern due to numerous cases of individuals posting offensive content, creating fake accounts, and using the platform to harass others.[157]

Figure 16. TikTok's COVID-19 Resources[158]

COVID-19 Pandemic

During the early days of the COVID-19 Pandemic, TikTok reached an all-time high and surpassed two billion downloads worldwide.[159] In March 2020, the app observed a 27% increase in downloads compared to February 2020 with 6.2 million downloads.[159] Not only were more users downloading the app, but TikTok’s user spending also increased by 21% for a total of $2.9 million in gross revenue.[159] The app also observed an increase in Generation Z and Millennial usage, with many of them actively posting content.


TikTok demonstrated its commitment to informing users on COVID-19 by providing educational resources and information from credible sources as shown in Figure 16. This information could be accessed from the Discover Tab. When users searched for coronavirus related topics, they could also find videos from reliable sources on the subject.[160] Since early 2020, TikTok has deleted over 29,000 coronavirus related videos that contained “medical misinformation” and it has placed a coronavirus information banner over videos containing hashtags or words relating to the pandemic.[161]

Conclusion

Since its inception as Douyin in 2016, TikTok has made significant developments. With 800 million monthly active users, TikTok is one of the largest social media platforms today. ByteDance arguably has some of the best AI algorithm technology in mobile consumer technology today. But there are moral, legal, and ethical reasons to improve that algorithm to be more inclusive and to be aware of the direct impacts of buying people’s attention.


As a result of Chinese Security Laws and the Chinese origins of the TikTok app, privacy concerns and national security implications were heightened. In 2019, the app observed government agencies in the United States and major corporations introduce download bans on company devices. Additionally, ethical issues were raised surrounding the application’s censorship practices and its management of content. At the global level, countries such as Indonesia, Bangladesh, India, Japan, Australia, the United States, and Pakistan introduced bans, attempted bans, or other legislation. Notably, executive orders signed by President Trump also propagated the sale of TikTok’s US operations to Walmart and Oracle; however, the deal has not yet been completed. In Canada, the government has not yet implemented any legislation on TikTok, and this is likely due to the relationship Canada wants to foster with China and the lack of evidence indicating user data is owned outside of Canada. In addition, TikTok has contributed to various political and social outcomes. In particular, it has created an environment for youth to engage in political discourse and to address social issues. On the social forefront, TikTok has amplified the voices of creators of minority backgrounds, catalyzed careers in music for content creators, and provided its users with credible resources on the COVID-19 pandemic.


To leverage its existing success, TikTok should focus on using its current popularity to its advantage and building multiple revenue streams, so that there are more users anchored to its suite of products such as its upcoming music streaming service. Given the retention rate of social media applications, and the current valuation of ByteDance, investing in the development of a range of multimedia applications can help TikTok dominate the industry and continue to redefine the way people consume content. The future of influencer marketing is reliant on the popularity of social media platforms, and as an industry, influencer marketing has become oversaturated and there is a loss of consumer confidence in the superficialness of these influencers. The industry has undergone a shift towards producing more authentic content and TikTok contributes a large part to that.


TikTok may be one of the most popular apps today, but its future remains uncertain. For this app to be successful in the long term, it depends on whether TikTok can adapt to its existing users' future demands while maintaining profitability through new monetization strategies. If it cannot adapt to these demands, TikTok could observe a future like Vine, a similar short-form entertainment app that failed to meet the ever-growing demands of its users. After Vine shutdown, creators on the platform moved on to other social media platforms that emphasize the need for TikTok to maintain its appeal to these individuals through increasing their monetization strategies. Without these individuals posting new content, TikTok will become obsolete, and its users could spend their time on Triller, Snapchat, YouTube, or Instagram.

Authors

Janice Chan Abbas Kherodawala Adam Suleman
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada


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