The company announced that it now has over 150 million US monthly active users, on the eve a TikTok hearing. After the intense, long hearing in which lawmakers told TikTok CEO to ban the app, many may be wondering where all those users will go if the social media network goes away.
Answer: Probably other large American tech platforms.
Many of the biggest US social media companies copied TikTok's features for years. This would make it easier for users and creators to move away from the platform. Reels, Instagram's short-form video tool, was introduced in 2020. Snapchat has Spotlight, YouTube YouTube Shorts, and Spotify even has a TikTok-like video stream with recommended music and other content.
In a recent investor's note Ali Mogharabi, an analyst with financial services firm Morningstar, stated that if a ban was approved and enforced, content, user count, engagement and likely ad dollars to Snap, Instagram, YouTube and other platforms will increase.
Washington's actions to clamp down on TikTok because of national security concerns could end up benefiting some of the same American tech firms that Washington scrutinizes for other reasons, such as their market dominance or impact on teens.
These companies could still be benefited even if there is no ban. Mogharabi stated that this uncertainty could cause some TikTok content creators and encourage them to push their audiences to other social networks.
One company already sees a boost. Snap's stock rose during the TikTok appearance before Congress, amid renewed discussions between federal officials about a TikTok ban.
On Thursday, TikTok CEO Shou Chen was quizzed by lawmakers. They expressed deep suspicion about his company's efforts to protect US user data as well as their concerns about China-related ties. ByteDance, TikTok’s parent company, is located in Beijing. It could be subject to Chinese data requests laws, which could force it to give user data to the government.
Washington Republican Rep. Cathy McMorris Rodgers was the Chair of the House Energy and Commerce Committee. She opened Thursday's hearing telling Shou that 'Your platform should not be allowed.' House Speaker Kevin McCarthy stated that he supports legislation to ban TikTok, and Secretary of State Antony Blinken stated that TikTok should be 'ended in one way or the other'.
Analyst Lian Jye su, with ABI Search believes that users will follow their TikTok influencers wherever they go.
Su stated that most users will follow the content creators to their next destination. "Instagram and Snapchat are the best options as content creators still prefer to monetize their content. Youtube Shorts is also a great option.
Su stated that smaller platforms also have the potential to gain ground. Triller, a short-form video platform with over 450 million users, actively pursues TikTok content creators by offering cash bonuses, partnerships, and other incentives to move platforms. Other platforms that may be more appealing to creators include Dubsmach, a Reddit-owned platform for short videos, and Clash which allows users to create looping 21-second videos.
Talk of a TikTok ban is possible, but it's still premature. If TikTok's Chinese owners don't agree to spin it off, the Biden administration will ban the app from the United States.
During a Thursday primetime special on TikTok, Rep. Raja Krishnamoorthi stated that he doubts the app will go dark. He stated that a sale was most likely.
Some US tech platforms may find it difficult to sell the app.
In the investor's note, Moghaharbi stated that Snap has a weaker network impact than Meta and that a more trusted US TikTok could make it harder to attract users to TikTok or prevent them from migrating there.