president joe biden signed a bill on Wednesday that TikTok could be banned – for real this time. After so many false starts and stops, some creator economy founders and their clients are rolling their eyes. They’ve been through this before.
“I think two years ago this would have been devastating.” Financial Carat co-founder and co-CEO Eric Wei told TechCrunch. “Now…huh.”
When creators succeed, startups working in the creator economy usually succeed as well. Still, Wei isn’t particularly worried about the friction from the TikTok ban affecting his business, a Series B startup that provides financial services to creators.
“If you create products in startups that help creators make money, then from the point of view of the addressable market, this is good for you,” Wei said. “Your framing can be like, ‘TikTok is gone; As a creator, you have to think about diversifying and how to sustain yourself, so here are XYZ things you can do.’”
The threat of a TikTok ban sounds a bit like “The Boy Who Cried Wolf,” although this time it’s different. This is not only political theater in the form of ongoing hearings in the Senate. This bill, which would force ByteDance to sell TikTok if it cannot find an American buyer within nine months, made its way through the House and Senate to Biden’s desk, where he signed it into law.
But the landscape for creators looks different now than in 2020, when former President Donald Trump tried to ban the Chinese-owned app (and, as he runs for president again, now says he opposes a ban because it would give Meta too much power). Established creators have had about three years of legal back-and-forth and two different presidencies to prepare their businesses for a world without TikTok.
As Wei navigates a large group chat he participates in with other creators, he notices that no one is too scared.
“I’m watching and there are some jokes: One guy jokes, ‘My Snapchat stock is about to explode,’ and another guy said, ‘Let’s do a parody: When TikTokers protest the TikTok ban, who’s in it?'” said. . “A third says, ‘TikTok is about to file a lawsuit.’ I’ve been talking to your inmates,’ and a fourth responded, ‘Where’s my popcorn?’”
This is not the case for all types of creators. Wei notes that TikTok live stream creators and creators who monetize through TikTok Shop could be the hardest hit, as platforms like YouTube Shorts and Instagram Reels don’t invest as much in those features as TikTok. The ban could also be detrimental to politically oriented creatorssince Instagram Reels is not a viable alternative for them: the Meta-owned platform has began to limit The scope of political content. And while the more established creators in Wei’s group chat have been preparing for this for years, the transition away from TikTok could be a big blow to newer creators who don’t yet have a following on multiple platforms.
“To be clear, no one is saying, ‘This is good for us!’” Wei said. But the amount of time creators have had to prepare for this moment has better prepared them to weather the storm.
“This is something that’s been talked about for a long time, so creators are aware; this is not new,” Harry Gestetner, co-founder and CEO of the creator monetization platform. fanfix, he told TechCrunch. “The second thing is that this is not an overnight ban. Creators still have about a year to transfer their followers, so I’m optimistic.”
James Jones, the CEO of Bulkanother financial services company for creators analyzes the situation in parallel.
“There will undoubtedly be a ripple effect among the creator community as a result of the TikTok ban,” Jones told TechCrunch. “But creators are getting better at diversifying the ways they monetize across multiple platforms. “We’ve also seen this film before in the case of Vine, which paved the way for TikTok to fill the void it left.”
TikTok’s secret ingredient is its power to help creators get discovered; More than other platforms, anyone can explode onto the For You page. But while Instagram Reels and YouTube Shorts could have been compared to “kirkland brand TikTok” in 2021, the platforms have matured since then.
In the initial of TikTok Creator Fund, a static pool of money distributed among a growing number of eligible creators, few people were supported by TikTok views alone. This has recently changed when TikTok transitioned creators to its Creativity program, which offers a better deal to eligible creators, but not all creators create videos that fit the requirements of that program. So to make content creation a stable career, they would have to transition to other platforms anyway. YouTube shorts have started share advertising revenue in short-form videos, similar to its long-standing partner program, while Instagram Reels only has occasional and unreliable ads. bonus programs.
Gestetner told TechCrunch that some creators he works with have become disillusioned with TikTok anyway.
“The problems with TikTok go beyond the ban,” he said. “Creators often have their accounts on TikTok removed, banned, or reported, and it’s very difficult to get a response from TikTok. That’s why we’ve been dealing with problems there for years.”
It’s not that other platforms don’t share these transparency problems. But these risks have made it essential that creators not put all their energy into a single platform.
“Five years ago, creators were generally on one platform,” he said. “Now, each creator has a minimum of three and up to five, six or seven platforms that he uses.”
This need for diversification extends beyond the platforms creators use. Creators also need to generate income from a variety of sources, whether through fan memberships, merchandise sales, live performances, or courses.
“I think in our business there will be no impact, or potentially a positive impact,” Gestetner said. “This helps our case, because all creators are skeptical of big platforms and don’t want all of their monetization tied to one particular platform.”
In theory, banning TikTok could create space in the market for another short-form video app, perhaps one that isn’t owned by a massive corporation like Meta or Google. But this probably won’t pose another situation like what happened when Elon Musk bought Twitter and several microblogging apps emerged seemingly overnight.
“I think a really good example of this is: remember Triller?” Wei said. “For a while, we were all excited about it, like ‘Oh my God, TikTok is going away, let’s put money into Triller!’ But then everyone realized that TikTok wasn’t going away. And now years have passed and is anyone talking about Triller anymore?
Well, they might not be talking about Triller either because the company is a walking red flag. In any case, creators won’t have the patience to invest in a fledgling platform that might not last, so they’ll have to make do with Instagram, YouTube, and Snapchat. However, that doesn’t mean TikTok won’t be missed.
“I think the fans will be the most affected overall,” Gestetner said. “But I do think the Shorts and Reels experience is getting very good.”