Chad Spangler is making a video.
Courtesy: 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.
A bipartisan congressional committee was investigating how TikTok, the hugely popular short video app owned by Chinese company ByteDance, could pose a possible threat to the privacy and security of American consumers.
Representatives spoke to Chew in regards to the app’s addictive features, potentially dangerous posts, and whether US user data could find yourself within the hands of the Chinese government. Politicians threaten to ban TikTok nationwide unless ByteDance sells its stake within the app, which China has said it “strongly” opposes.
But that is not the one source of opposition. Creators like Spangler, who sells his creations online, are apprehensive about their livelihoods.
TikTok has turn out to be a significant component of the so-called creator economy, which is reported to have exceeded $100 billion a yr Influencer marketing hub. Creators have forged lucrative partnerships with brands, and small business owners like Spangler are using the sizable audience they’ve built on TikTok to promote their work and drive traffic to their sites.
“That is the strength of TikTok,” said Spangler, adding that the app drives most of his company, The Good Chad’s sales. “They’ve captured lightning in a bottle that other platforms have not yet been able to do.”
Spangler has over 200,000 followers on TikTok, and his business brought in over $100,000 last yr, largely due to his reach. Influencer Marketing Hub data shows that the common annual income of an influencer within the US was over $108,000 in 2021.
TikTok is experiencing meteoric growth within the US, attracting increasingly consumer attention from individuals who spend more time on Facebook, Instagram, Snapchat and Twitter. In 2021, TikTok surpassed one billion monthly users. August Pew Research Center survey found that 67% of teens in the USA use TikTok and 16% say they use it almost always.
Advertisers follow the eyeballs. According to Insider Intelligence, TikTok currently controls 2.3% of the worldwide digital promoting market, only surpassed by it Googleincluding YouTube; Facebook, including Instagram; Amazon and Alibaba.
But with Congress pushing for TikTok, the app’s role in the long run of American social media is uncertain, as is the sustainability of the businesses that rely on it.
TikTok CEO Shou Zi Chew testifies before the House Committee on Energy and Commerce on “TikTok: How Congress Can Protect U.S. Data Privacy and Protect Children from Harm Online,” at Capitol Hill on March 23, 2023, in Washington, D.C. .
Olivier Douliery | AFP | Getty’s paintings
In April, Montana lawmakers approved a bill that might ban TikTok from offering within the state from next yr. TikTok said it opposed the bill and said there was no clear way for the state to implement it.
Congress has already blocked the app from government devices, and a few US officials are attempting to ban its use altogether unless ByteDance resigns.
ByteDance didn’t respond to CNBC’s request for comment.
The White House also backed a bipartisan Senate bill called the RESTRICT Act in March that might give the Biden administration the facility to block platforms like TikTok. But after significant opposition, the momentum for the bill slowed dramatically.
As the talk heats up, the creators find themselves in a state of limbo.
The developers are turning to other platforms
Vivian Tu, who lives in Miami, has been preparing for a possible TikTok ban by working to build an audience and diversify her content across multiple platforms.
She began posting on TikTok in 2021 as a fun way to answer co-workers’ questions on finance and investing. By the top of her first week on the platform, she had over 100,000 followers. Last yr, she left her Wall Street and tech media careers to pursue full-time content creation.
Here he shares videos, trying to be the friendly face of a financial expert. As well as to posting on TikTok, he uses Instagram, YouTube and Twitter, he also runs a podcast and a weekly newsletter.
Tu said she began constructing her cross-platform presence before the potential TikTok ban entered the equation, and hopes to opened up her income streams enough to be OK should something occur. But she called her work on TikTok, where she has over 2.4 million followers, her “pride and joy.”
“It will be an enormous disappointment if the app was banned,” she told CNBC in an interview.
Top social media corporations within the US are preparing to try to fill the vacuum.
goal, which owns Instagram and Facebook, is pumping money into its TikTok follower, called Reels. CEO Mark Zuckerberg said through the company’s earnings call last month that users share videos greater than 2 billion times a day, and that number has doubled previously six months, adding, “we imagine we’re gaining share briefly videos.”
Snap and YouTube are investing billions of dollars in their very own short video features to compete with TikTok.
Tu said she expects a “mass exodus” of creators flocking to other platforms if TikTok is banned, however the app is difficult to beat when it comes to discovering recent and relevant content.
“So someone like me who did not have a single follower or a single video could take a video and make the primary one get 3 million views,” she said. “It really doesn’t occur anywhere else.”
Emily Foster along with her stuffed animals.
source: Emily Foster
Small business owner Emily Foster agrees. She said other media platforms cannot even come close to offering the sort of exposure TikTok does.
Foster designs stuffed animals that he sells through her Etsy shop and its website called Alpacasews. She said she began hand-sewing stuffed animals as gifts for friends and to order. But when a video of a dragon she shot through the pandemic got 1,000 views on TikTok – a number that’s low for her nowadays – she said it gave her the arrogance to open an Etsy shop.
“I used to be like, ‘Oh my God, this could possibly be something,'” she told CNBC.
Foster’s designs quickly gained popularity on TikTok, where he now has over 250,000 followers. She recently shared a behind-the-scenes video of herself packing an order for somebody who ordered one of each stuffed animal from her Etsy shop. The video quickly garnered over 500,000 views and her entire stock sold out in someday.
“The audience just doesn’t exist”
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 production costs. In her last one, she raised over $100,000 Kickstarter campaignwhich surfaced after three of her videos went viral on TikTok.
“My business would never be where it’s today without TikTok,” she said.
With the upcoming threat of a TikTok ban, Foster said she shares content on Instagram, YouTube and Twitter to try to expand her fan base. She said at this point her business would probably survive if TikTok disappeared, however it can be difficult.
“The audience just doesn’t exist, especially for smaller creators,” she said.
Apart from the cash, Foster worries about losing what she’s worked so hard for. She said she met “incredible” friends, artists and other small business owners on the platform.
“You are never quite alone. It means rather a lot,” she said. “I’m stressed in regards to the potential loss of sales, the potential loss of customers, but greater than the loss of a community that can break my heart.”
For Spangler, an artist, the talk surrounding TikTok is infuriating not only because of what it could mean for his livelihood, but additionally because he thinks lawmakers are misinformed about what the app does.
Spangler recalled one Republican congressman asking Chew in his testimony about whether TikTok connects to a user’s home Wi-Fi network.
“Even when you’ve got a working knowledge of anything related to technology, in case you watched those auditions, it was just very embarrassing,” said Spangler. “It is also frustrating that I feel like individuals who don’t know how things work can take that away from me.”
Spangler directed his anger at his work of art. After the hearing, he designed a T-shirt depicting a zombie-like congressman with the words “Does TikTok Use Wi-Fi?”
He shared a video about it on TikTok and made nearly $2,500 selling T-shirts in lower than two days.
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