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TikTok US Ban Threatens Small Businesses, Creators and Entertainment Industry

TikTok US Ban Threatens Small Businesses, Content Creators and Entertainment Industry

China-owned video-sharing platform TikTok is on the verge of a nationwide ban in the United States. A possible ban will force more than 150 million users in the United States to uninstall the app, which will also affect 5 million small businesses and content creators.

TikTok has transformed from a social platform for content creators to a major entertainment force that has disrupted Hollywood and changed the entertainment industry.

Also Read: Congressman Says TikTok Ban Won’t Ensure Americans’ Data Safety

A ban on TikTok now could have dire consequences for not just the app’s biggest stars and small businesses, but also for movie studios, record labels, casting directors, agents, and actors, who would need to drastically change their business practices.

TikTok has not transformed from a dancing and lip-syncing video sharing app into something more, a platform that amplifies unheard voices.

“TikTok is the most democratized content platform we’ve ever had and it has revolutionized Hollywood,” said Adam Faze, studio chief of entertainment studio FazeWorld.

The consequences of a TikTok ban

TikTok has provided an opportunity for individuals who were previously excluded from the media and entertainment industry to bypass conventional gatekeepers and enter the industry.

“I see TikTok as the old days of free network TV … Taking it away would go back to an era where we’re relying on legacy media brands and what Hollywood wants us to watch, because they’re the only ones who can afford a marketing budget to find an audience,” said Faze.

According to a recent survey by The Washington Post, TikTok’s user base comprises a greater proportion of young and non-white individuals.

TikTok’s audience is younger, more diverse, and has lower incomes compared to other social media platforms. 53% of non-white adults and 59% of Americans ages 18–34 use TikTok. People with lower incomes and without college degrees are also more likely to use TikTok, the survey shows.

Faze produced successful TV shows for TikTok, including “Keep the Meter Running” which became an instant hit, reaching millions of viewers.

The studio chief revealed that while shooting an episode in London, the production team were chased down the street by young fans of the show, due to its success on TikTok.

Reaching users at scale

Alex Sanger, executive vice president of global digital marketing at Universal Pictures, says the company heavily relies on TikTok for movie marketing.

TikTok is the bridge to “reach basically everyone at scale” for the company, he explained.

“We use it as an awareness builder, we use it to drive deeper engagement with our IP, and we use it further down the funnel to convert people into moviegoers.”

It’s natural to wonder what happens when that awareness builder is no longer available.

TikTok a ‘discovery mechanism’ for record labels

Despite its growing popularity, TikTok is facing accusations of sharing users’ personal data with the Chinese government, which has led to a possible ban in the United States.

The crackdown has got the music and entertainment industries worried.

Tatiana Cirisano of Midia Research, an entertainment industry consultancy, warned that a TikTok ban would majorly disrupt the music industry.

“This isn’t just about artists losing a tool, this is a major discovery mechanism for major labels themselves, the [potential ban] is more important and more related to their bottom line than you might think,” said Cirisano.

The way “artists are marketed and introduced” to the public is also changing.

“TikTok is something the music industry has been relying on to help solve some of those challenges over the past couple of years,” argues Cirisano.

TikTok has also become a source of revenue, with the industry generating revenue from licensing deals on tracks played on the social media app.

Blurred entertainment lines

Bill Rosenblatt, President of GiantSteps Media Technology Strategies, puts the music industry among the many business contemplating how a potential TikTok ban could affect their bottom line.

Six years of hyper-rapid growth have made TikTok the third-largest social media platform in terms of user numbers, behind only Facebook and Instagram.

“Although entertainment is the largest content category of TikTok videos by a wide margin, it’s not known how much of that is specifically related to music,” stated Rosenblatt.

Rosenblatt noted that the categories within “entertainment” are blurred on TikTok, with many users getting famous through lip-syncs, dance routines, or videos set to someone else’s music. However, only a small number of users are artists who distribute or promote their own music on the app.

To understand the impact on the music industry if TikTok disappears from the US market, it helps to understand the effect it’s had on the business thus far, explained Rosenblatt.

A potential ban on TikTok in the US could have significant consequences for not only its users, but also for the entertainment and music industries that have come to rely on the platform for marketing and revenue.

It remains to be seen how this situation will develop and what the ultimate outcome will be.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.

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