Quantfury Daily Gazette
TikTok: the time is ticking
In the early 1980s, a lot of people were really worried about what was happening to the teenagers. It was a common concern over the years – a generational gap has always been a stable of life. Kids just don’t make sense to their parents and those parents just don’t understand.
But, there was something different about this particular generation gap. It was driven by a technology change. Teens were absorbing this technology in a way that was confusing and concerning to their parents and those concerns grew throughout the decade with many wondering What Could Be Done?
What was the technology? It seems quaint now, but what people were worried about was the emerging popularity of music videos and of the channels that played them on cable TV. Starting in the United States with MTV, and quickly spreading around the world, the music video phenomena is among the most quintessential pop culture touchstones of the era. They are used to this day to demonstrate that a television show or movie is being set in the ‘80s. Show kids watching a music video and you instantly know what decade you are in.
As it turned out, teenagers’ brains didn’t turn to mush from watching too many music videos and very few, if any, became Satan worshipers. As is generally the case, the older generation’s concerns were mostly overstated. Music videos ended up becoming an important aspect of the music industry, which experienced a significant boost in revenues by engaging the teen market so thoroughly.
The purpose of this little history lesson isn’t to make you click away to watch a Duran Duran video, but rather to draw comparisons to what is happening now with TikTok.
The Chinese-owned video sharing app has been making all kinds of noise over the last year and is the fastest growing Social Media app in the world. Like music videos in the 80s, TikTok is primarily a vehicle for teenage expression and absorption right now, is driven by new-ish technology, and old people mostly don’t get it.
In fact, that older generation is a bit scared of the app. Since its value isn’t intuitively understood by most people older than about 25, there’s a tendency to only see the negatives in it. Those negatives are largely security related, with TikTok gaining access to information of millions and millions of Western users’ data.
A Chinese business having that info makes leaders in the West nervous. Those concerns were what was behind former President Donald Trump’s call to ban the app in the United States last Fall.
Privacy issues are a concern with TikTok, but not really at a level much greater than Facebook or Twitter. The mining of personal data is a huge part of any Social Media’s business plan and TikTok is no different. As for the Chinese concerns, it’s likely that the boat has already sailed on that front.
The app isn’t going away and it’s only going to grow. The AI technology it uses to drive engagement is just too addictive for it not to maintain its users and find more. In fact, it’s the AI-driven, curated feed, that sets TikTok apart from the other Social Media apps and is so appealing to its users.
Whereas apps like Twitter, Instagram and Facebook are being driven by user interaction, the way TikTok works is to continually feed the user with new content that matches their interests. It’s a more passive user experience, which is why its more analogous with cable television viewing in the ‘80s than with the aforementioned apps.
It’s also less of a toxic experience for users as the bullying and harassment issues that the legacy Social Media companies are dealing with are far less prevalent.
From a business perspective, all of that of that makes for a better model. You can attract more users, keep them there longer and better target ads to them.
With the Biden Administration seemingly taking the U.S. ban of TikTok off the table, the parent company, ByteDance, is now looking at an IPO this year. It has a current valuation of $250b USD. If that seems high, consider that similar Chinese app called Kuaishou (HKG: 1024) saw a first day gain of 161% with its IPO last year. And, that’s an app that isn’t widely used outside China. The writing is on the wall. Like music videos, TikTok isn’t going away and, in fact, is likely going to be the biggest Social Media app in the world within a few years.
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