Chad Spangler shoots a video.
Courtesy of Chad Spangler
As TikTok CEO Shou Zi Chew faced hours of grueling questioning from members of Congress in late March, small business owner Chad Spangler watched in frustration.
The bipartisan congressional committee was exploring how TikTok, the massively popular short-video app owned by China’s ByteDance, could pose a potential threat to the privacy and security of American consumers.
Representatives questioned Chew about the app’s addictive features, potentially dangerous posts, and whether U.S. user data could end up in the hands of the Chinese government. Politicians have threatened to ban TikTok nationwide unless ByteDance sells its stake in the app, a move China has “strongly” opposed.
But this is not the only source of dissent. Creators like Spangler, who sells his works online, worry about their livelihoods.
TikTok has become a major part of the so-called creator economy, which has topped $100 billion a year, according to Influencer Marketing Center. Creators have formed lucrative partnerships with brands, and small business owners like Spangler are using the large audiences they’ve built on TikTok to promote their work and drive traffic to their websites.
“That’s the power of TikTok,” Spangler said, adding that the app drives the majority of sales for his business, The Good Chad. “They’ve captured lightning in the bottle that other platforms just haven’t been able to do yet.”
Spangler has more than 200,000 followers on TikTok, and his business brought in more than $100,000 last year, largely thanks to his reach there. Data from Influencer Marketing Hub shows that the average annual income of an influencer in the United States was over $108,000 in 2021.
TikTok had a meteoric rise in the United States, attracting more and more consumer attention from people spending more time on Facebook, Instagram, Snapchat and Twitter. In 2021, TikTok surpassed one billion monthly users. A month of august A Pew Research Center survey found that 67% of teens in the US use TikTok and 16% said they are there almost constantly.
Advertisers follow the eyeballs. According to Insider Intelligence, TikTok now controls 2.3% of the global digital advertising market, putting it behind only Google, including YouTube; Facebook, including Instagram; Amazon, and Ali Baba.
But with Congress taking on TikTok, the app’s role in the future of American social media is fragile, as is the sustainability of the businesses that rely on it.
TikTok CEO Shou Zi Chew testifies before the House Energy and Commerce Committee hearing on “TikTok: How Congress Can Safeguard American Data Privacy and Protect Children from Online Harms,” on Capitol Hill, March 23, 2023, in Washington , DC.
Olivier Douliery | AFP | Getty Images
In April, Montana lawmakers approved a bill that would ban TikTok from being offered in the state starting next year. TikTok said it opposes the bill and claims there is no clear way for the state to enforce it.
Congress has already banned the app on government devices, and some US officials are trying to ban its use entirely unless ByteDance divests.
ByteDance did not respond to CNBC’s request for comment.
The White House also backed a bipartisan Senate bill in March called the RESTRICT Act, which would give the Biden administration the power to ban platforms such as TikTok. But after a major setback, the momentum behind the bill has slowed significantly.
As the debate escalates, creators are in a state of uncertainty.
Creators are turning to other platforms
Vivian Tu, who lives in Miami, prepared for a possible TikTok ban by working to grow her following and diversify her content across multiple platforms.
She started posting on TikTok in 2021 as a fun way to help answer questions from colleagues about finance and investing. By the end of her first week on the platform, she had over 100,000 subscribers. Last year, she left behind a career on Wall Street and in tech media to pursue content creation full-time.
You share videos in an effort to serve as a friendly face for financial expertise. In addition to posting on TikTok, she uses Instagram, YouTube and Twitter, and she also runs a podcast and a weekly newsletter.
Tu said she started building her presence on multiple platforms before a potential TikTok ban entered the equation, and she hopes she spreads her revenue streams enough to be OK if something happens. thing is happening. But she called her work on TikTok, where she has more than 2.4 million followers, her “pride and joy”.
“It would be a huge disappointment to see the app banned,” she told CNBC in an interview.
Major social media companies in the United States are gearing up to try to fill the void.
Meta, which owns Instagram and Facebook, pumped money into its TikTok copycat, called Reels. CEO Mark Zuckerberg said during the company’s earnings call last month that users share videos more than 2 billion times a day, a number that has doubled in the past six months, adding “we believe that we are gaining market share in short videos”.
Snap and YouTube have invested billions of dollars in their own short video features to compete with TikTok.
Tu said she expects there will be a “mass exodus” of creators who will flock to other platforms if TikTok is banned, but the app is hard to beat when it comes to discover new and relevant content.
“That’s why someone like me, who didn’t have a single follower, didn’t have a single video, could make a video and have the very first one get 3 million views,” he said. she declared. “It really doesn’t happen anywhere else.”
Emily Foster with her stuffed animals.
Source: Emily Foster
Small business owner Emily Foster agrees. She said other media platforms couldn’t offer the kind of exposure she gets from TikTok.
Foster designs stuffed animals that she sells through her Etsy shop and its website called Alpacasews. She said she started sewing the stuffed animals by hand as gifts for her friends and on commission. But when a video of a dragon she made during the pandemic received 1,000 views on TikTok – a miniscule number for her these days – she said it gave her the confidence to open up shop. Etsy.
“I was like, ‘Oh my god, this could be something,'” she told CNBC.
Foster’s designs quickly gained traction on TikTok, where she now has more than 250,000 followers. She recently shared a behind-the-scenes video that showed her packing an order for someone who ordered a stuffed animal from her Etsy shop. The video quickly racked up over 500,000 views and all of its inventory sold out within a day.
Demand for Foster’s stuffed animals quickly outstripped her ability to make them by hand, so she turned to crowdfunding site Kickstarter to raise money to cover manufacturing costs. She raised over $100,000 in her last Kickstarter Campaignwhich came after three of his videos went viral on TikTok.
“My business would never be where it is today without TikTok,” she said.
With the looming threat of a TikTok ban, Foster said she’s been sharing content on Instagram, YouTube and Twitter to try to grow her audience. At this point, she said, her business would likely survive if TikTok went away, but it would be tough.
“The audience just isn’t there, especially for smaller creators,” she said.
Beyond money, Foster fears losing the following she’s worked so hard to build. She said she has met friends, artists and other “fantastic” small business owners on the platform.
“You’re never quite alone. It means a lot,” she said. “I’m stressed about potentially losing sales, potentially losing customers, but most of all it’s the loss of a community that will break my heart.”
For Spangler, the artist, the debate surrounding TikTok is infuriating not just because of what it could mean for his livelihood, but because he feels lawmakers are misinformed about what the app does.
Spangler recalled that a Republican congressman asked Chew in his testimony if TikTok connects to a user’s home Wi-Fi network.
“If you even have a working knowledge of anything tech-related, if you watched those hearings, it was just very embarrassing,” Spangler said. “What’s even more frustrating is that I feel like this is potentially being taken away from me by people who have no idea how this all works.”
Spangler channeled his anger into his works. After the hearing, he designed a T-shirt featuring a zombie-like congressman with the phrase “Does TikTak use Wi-Fi?”
He shared a video about it on TikTok and made almost $2,500 from selling t-shirts in less than two days.
SHOW: TikTok’s regulatory review could be a tailwind for Meta