Streaming Media
Although governments around the world have restricted or outlawed the use of TikTok, the state of Montana last week became one of the first jurisdictions to extend the ban to consumer users as well. Other states may well follow and while there are challenges to the proposed law creators reliant on the platform would do well not seek out other options should the noose tighten in the run up to the 2024 presidential election.
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“Naturally, content creators across the country who make their living on TikTok are watching to see how this ban plays out,” says Ben Trevathan, President & CFO of cloud-based video platform FanHero. “Many creators are exploring alternative streaming platforms to hedge their risk. Obviously, they want to be able to continue to monetize and maintain a steady income. We encourage them to explore all of their options to understand which platforms truly have the capabilities and monetization systems in place to support them.”
With north of one billion monthly users and annual revenue in excess of $10bn, plus a reach which touches virtually every aspect of business and culture, TikTok is arguably the most influential social video app on the planet.
The bill targets app stores such as those run by Google and Apple, prohibiting them from hosting TikTok. Penalties include fines of $10,000 per violation per day, where a single violation is defined as “each time that a user accesses TikTok, is offered the ability to access TikTok, or is offered the ability to download TikTok.”
The Montana state-level ban is the latest in a series of restrictions to the app applied by administrations concerned about back door data breaches to Beijing.
Montana’s governor, Greg Gianforte, said the move was “to protect Montanans’ personal and private data from being harvested by the Chinese Communist party”.
These concerns are not without foundation. Owner Bytedance sacked four workers and apologised for accessing personal data of journalists who worked for the Financial Times and BuzzFeed.
It has begged the question about what would happen should TikTok be forced out of business in the west.
Guillermo Dvorak, Head of Digital at media and behavioural planning agency Total Media thinks the biggest winner of a potential TikTok demise would be YouTube, reasoning that it be able to gain back some of its lost market share. The biggest losers on the other hand will be creators.
“If TikTok were to either haemorrhage users or be outright banned, the impact on the creator community would be devastating. For many, TikTok was an opportunity to find their voice for the first time. If TikTok were to disappear, or if it were forced to change its format so drastically that it became unrecognizable from its current incarnation, it would be a huge loss for creators. They may have to seek new platforms to distribute their content on if they don’t want to lose out on all that sweet, sweet ad revenue.”
We are not at this stage yet. The Montana ban comes into effect on January 1 2024 and there are already a number of lawsuits challenging its efficacy.
A group of Montana-based creators are suing the state arguing that “Montana can no more ban its residents from viewing or posting to TikTok than it could ban the Wall Street Journal because of who owns it or the ideas it publishes.”
The American Civil Liberties Union accused the state of having “trampled on the free speech of hundreds of thousands of Montanans who use the app to express themselves, gather information, and run their small business in the name of anti-Chinese sentiment.”
NetChoice, an industry trade group that counts TikTok as a member, said the bill “ignores the U.S. Constitution.”
“The government may not block our ability to access constitutionally protected speech – whether it is in a newspaper, on a website or via an app,” said Carl Szabo, NetChoice’s general counsel.
Olexandr Kyrychenko, a partner at the IMD Corporate law firm, told The Guardian that no TikTok users would be fined because the bill targets companies rather than individuals. Yet he thinks the “eyewatering” $10k a day fine would encourage companies to comply.
“It would certainly be a costly gamble to keep download options available once the bill comes into force and app stores would be well advised to comply,” he said.
Then there are the logistics of enforcing a ban on app stores which operation nationally, not state by state.
TechNet, a trade organization that counts those companies as members, told Montana lawmakers at a hearing in March that “app stores do not have the ability to geofence on a state-by-state basis. It would thus be impossible for our members to prevent the app from being downloaded specifically in the state of Montana.”
Change is inevitable, especially in tech and perhaps TikTok has had its Icarus moment. Perhaps creators reliant on TikTok should be looking to diversify to other platforms.
“The key factors to future growth will come from platforms that are distribution channel agnostic, are economically attractive and deliver data-backed insights to creators,” reckons Trevathan. “Disruption in an established platform is painful, but it presents the opportunity to review the full range of available alternatives.
His advice to creators is research the options to understand how much money is being captured by the platform versus going into the creator’s pocket.
Naturally he points to FanHero which “offers the exact same streaming capabilities of platforms like YouTube but with better monetization and customization to support smaller creators or niche businesses."
While the drive for innovation may remain, the absence of TikTok would create a void that other platforms would vie to fill.
“A ban on TikTok could bring about the birth of a new generation of short-form video platforms, ones that learn from TikTok’s success and bring something fresh to the table,” Gilbert told IBC. “Regardless, a ban on TikTok in the US would be a game-changer for the future of short-form videos and could have ripple effects throughout the tech industry.”
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