Business March 28, 2023
TikTok US Ban Threatens Small Businesses, 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.
don’t ban tiktok! it might force the music industry to invest in artist development again, thus creating sustainable, project-focused artists instead of annoying one hit wonders !!!! pic.twitter.com/CY2HMJXLGl
— Thomston (@ThomstonMusic) March 24, 2023
“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.
Metaverse Gaming Market Expected to Reach $119.2 Billion by 2028
The metaverse gaming market is estimated to encompass $22.7 billion in 2023 and projected to reach $119.2 billion by 2028, according to a recent report from ReportLinker.
The metaverse has been a hot cake in the tech industry in recent years and was boosted by Mark Zuckerberg’s decision to change Facebook’s name to Meta. However, the market has been limping towards AI, which stole the spotlight from virtual reality.
“The global metaverse in gaming market size is estimated at USD 22.7 billion in 2023 and is projected to reach USD 119.2 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 39.3%,” stated the report.
The growth of the metaverse in the gaming market is expected to be fuelled by several significant factors, including the dynamic and evolving landscape of adjacent technology markets “such as extended reality (XR),” which encompasses “virtual reality (VR),” augmented reality (AR), and mixed reality (MR).
Expectation of rapid growth
In 2021, the gaming industry experienced rapid growth, with billions of people playing video games globally and generating over $193 billion in revenue.
Gaming companies quickly became early adopters in exploring the potential of the metaverse. Looking ahead to 2023, it was projected that the metaverse will continue to reshape the gaming landscape.
A survey from last year shows that about 52% of U.S. gamers believe the metaverse will change the game industry.
“According to the survey, just over half (52%) of gamers believe the metaverse will change the video game industry and a plurality (41%) think that the metaverse will have a positive impact on the industry (vs. 25% who disagree),” reads the survey report of Globant and polling firm YouGov.
Moreover, 40% say the buzz around “metaverse gaming is warranted,” though nearly “one-third (30%) were undecided” on that subject.
Who are the big players?
The metaverse is not just a single platform, virtual experience, or game; it is an entire world recreated to provide an immersive experience. Gaming is one of the many experiences in the metaverse that is powered by AI, VR, and AR.
Whenever it comes to gaming, some of the giant games like Fornite, Unreal, and Roblox come to mind.
Read Also: Meta Seeks to Boost Its Metaverse Gaming Credentials
And those are expected to be significant players in the metaverse due to their existing influence and capabilities in the gaming industry, as a report from 2022 states.
“As gaming platforms like Fortnight gain functionality and evolve into technologically advanced social meeting places, it becomes more likely that a functioning Metaverse, with an independent economy, systems, and processes is in our future,” reads the report.
Fortnite has transformed into a social meeting place, offering interactive events and branded experiences.
Unreal’s powerful engine enables immersive media experiences, while Roblox’s user-generated content and virtual currency have attracted millions of users. These factors position them to thrive in the evolving metaverse landscape.
Europe expecting significant growth
Europe is expected to witness significant growth in the gaming metaverse market, with the second-highest CAGR during the calculation period.
The UK, Germany, and France lead the way in technology investment, while Russia and Spain are also adopting new display technologies.
“The substantial growth of the virtual world immersive interactive gaming industry in Europe is a crucial driver for the gaming metaverse market in this region,” stated the report.
The immersive interactive gaming industry in Europe, along with the demand for AR, VR, and MR technologies in the entertainment sector, serves as a driving force, indicated ReportLinker.
@riseofaitech are now entering the Metaverse and the Play2Earn gaming space which, according to a 2021 Bloomberg report, is valued at $500bn with huge growth predictions. @sanboy23@Iamchike2@nainiydd#NFT #Crypto #P2E $AITECH pic.twitter.com/uMzyD2aSqL
— 오라클🔺 (@hoonjitw) June 1, 2023
Initiatives such as the European Association for Virtual Reality and Augmented Reality (EuroVR) and projects like Augmented Heritage and International Augmented Med (I AM) contribute to market growth.
With increasing startups in extended reality, particularly in Sweden, Europe is poised for increased growth in the gaming metaverse markets.
Chinese City Pledges $1.42bn to Boost Metaverse Industry Growth
Chinese city Zhengzhou has announced a plan to boost the metaverse industry by providing a significant 10 billion yuan ($1.42 billion) fund for local companies’ growth and development.
Although the People’s Bank of China banned digital assets in September 2021, the Asian power centre seems liberal towards the metaverse.
Under the new government’s draft, metaverse companies relocating their headquarters to Zhengzhou will have the opportunity to grab a start-up capital investment of up to 200 million yuan ($28.34 million).
In addition, the municipal government will provide a promising opportunity for companies operating in the metaverse sector within the city.
Chinese city Zhengzhou has released a policy draft to support the development of the metaverse industry with a $1.42 billion fund, aiming for a thriving metaverse industry by 2025 pic.twitter.com/5dLGj1Rmp1
— 0xClaudia (@0xClaudiaCloud) May 29, 2023
For each project that receives certification as viable by the government, companies will have the chance to secure a substantial grant of 5 million yuan ($710,000), regardless of their headquarters location.
Moreover, the government is offering other benefits such as rent subsidies for the metaverse company within Zhengzhou.
Open for public to review
The draft is now available on the municipal government’s website for feedback and review by the public.
“The public is now open to solicit opinions, and all sectors of society are welcome to put forward their opinions and suggestions,” reads the translation.
Hence, the purposed plan is only a draft to date, and the government has not mentioned the specific date of the fund allocation.
The metaverse-related sectors in Zhengzhou are expected to generate annual revenues exceeding 200 billion yuan ($28.34 billion) by the end of 2025, according to the municipal government.
Amid speculation about China lifting an absolute ban on crypto, the public is taking this draft as positive news for the industry.
“More positive news for crypto from China, that’s great,” wrote a Redditor in reaction to the news.
“One positive thing after the other,” another agreed, hopeful of China’s liberal step towards the crypto industry.
Will China overtake the West?
Western industry leaders like Meta wanted to be the leaders in the metaverse, but are now pivoting towards AI. Whereas China appears to be positioning itself as a potential metaverse hub.
As part of its commitment to spearheading China’s digital advancement, Nanjing, the capital of Jiangsu province, has also launched the China Metaverse Technology and Application Innovation Platform.
Chinese cities are promoting the metaverse sector as the future of the digital economy.
— ICNN (@icnncryptonews) May 29, 2023
“The Metaverse is a vague concept and every [company] is interpreting it in its own way. In China, it’s very much a government-led concept,” said Brady Wang, an associate director at tech market research firm Counterpoint.
The Chinese government is clearly keen on the technology.
“The key difference [in the metaverse] between China and the rest of the world is it’d be heavily regulated in a centralized manner,” said Zhengyuan Bo, a partner at China-focused research firm Plenum.
Bo emphasised that the monetization of digital assets within the metaverse is constrained due to limited space for growth.
“I think in a decade or two, China will play a bigger role in everything than the US,” speculated one Redditor.
“America hates China because China doesn’t do what America wants it to. They hate it because it exists. I’m happy China is dedollarizing,” another Redditor expressed.
Microsoft Accuses CMA of Irrationally Blocking $68.7bn Activision Takeover
Microsoft has blamed Britain’s Competition and Market Authority (CMA) for “irrationally” blocking its $68.7 billion takeover of Call of Duty video game maker Activision.
The tech giant announced its plan to acquire Activision to “bring the joy and community of gaming to everyone, across every device,” back in January 2022. The proposed takeover aimed to bring Activision’s popular franchises, like Call of Duty, under Microsoft’s umbrella.
“Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash,” stated the company.
Read Also: Google Opens Up Access to its Search Labs with Generative AI
However, its bid faced regulatory obstruction amid concerns over industry consolidation. The deal’s block provoked Microsoft to appeal, heightening anticipation for the outcome and its potential implications on the gaming landscape.
The regulatory body blocked Microsoft’s takeover of Activision in April, saying it would encourage market monopolies and stifle competition in the growing video game streaming market.
EU offers favorable conditions for businesses
The company has accused the regulator of making “fundamental errors” while blocking its deal.
Microsoft has claimed the CMA had not taken “proper account of three long-term commercial agreements which Microsoft had entered into with the other party” in the filing with the Competition Appeal Tribunal.
After the ruling, Microsoft president Brad Smith slated the regulator, suggesting the decision conveyed a “clear message” that the European Union (EU) offered more favorable conditions for starting a business in comparison to Britain.
Additionally, Activision, which is also the creator of the popular mobile game Candy Crush, accused the UK of having an unwelcoming business environment, stating that it was “closed for business.”
Hence, while the CMA has halted the acquisition, the EU has given the green light for the merger.
Need for broader understanding
Chancellor Jeremy Hunt expressed his belief that regulators should understand their “wider responsibilities for economic growth” following the blockage of the deal.
“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth” stated Hunt.
One of the reasons companies like Microsoft and Google are interested in investing in the UK is due to the presence of independent regulators that are not influenced by politicians, argued Hunt.
‘Takeover won’t be unfair’
The fact that the deal was blocked by the UK but welcomed by the EU has made headlines. Evidently in giving the green light, EU officials believe Activision’s takeover by Microsoft won’t be unfair.
In the meantime, it is still awaiting a confrontation with the US Federal Trade Commission which has filed a lawsuit to block the deal. The trial is scheduled to start in early August, with a decision expected by the end of the year.
EU approves — with conditions to license to rivals access to Activision's content for 10 years — @Microsoft's $MSFT's deal to buy 'Call of Duty' maker @Activision https://t.co/kjSxzJzjwm via @YahooFinance
— Alexis Keenan (@alexiskweed) May 15, 2023
“Where we diverged with the CMA was on remedies,” stated Margrethe Vestager, the EU’s competition chief.
She stated that a 10-year free license was granted to consumers, enabling them to stream all Activision games they hold licenses for via any cloud service.
“And why did we do this instead of blocking the merger?” she questioned.
“Well, to us, this solution fully addressed our concerns. And on top of that, it had significant pro-competitive effects.”
However, the Chief Executive of the CMA Sarah Cardell reiterated her support for the decision, emphasizing the regulator’s objective to establish favorable conditions for competition that would foster the growth of both large and small companies.
“I don’t find that we are operating sort of, broadly speaking, in a hostile environment,” stated Sarah.
Man Loses $600,000 to Scammer Using Face-Swapping AI
Google Opens Up Access to its Search Labs with Generative AI
Fake Pentagon Explosion Photo “Caused a $500 Million Market Cap Swing”
OpenAI Launches ChatGPT App for iOS, Android on the Way
ChatGPT’s Bogus Citations Land US Lawyer in Hot Water
White House Takes Steps to Study AI Risks, Assess Impact on Workers
Opera Unveils GPT-Powered AI Chatbot Aria
The Annual Crypto306 Exhibition To Be Hosted In Dubai On 8th May
Metafest 2023 Set for Return to Switzerland This April
TMRW Conference Announces Dates and Location for Its Second Belgrade Edition
TMRW DUBAI 2023 Three-Day Experience
BusinessThu 1 Jun 2023 06:36 GMT
Metaverse Gaming Market Expected to Reach $119.2 Billion by 2028
AIWed 31 May 2023 17:45 GMT
Judge Orders All AI-Generated Research To Be Declared in Court
CryptocurrenciesWed 31 May 2023 07:03 GMT
Floki Inu (FLOKI) Volumes Surge 300% on China Metaverse Game Plans
AITue 30 May 2023 15:07 GMT
Nvidia Debuts AI Tools in an Era Where “Anyone Can Be a Programmer”
BusinessTue 30 May 2023 10:43 GMT
Chinese City Pledges $1.42bn to Boost Metaverse Industry Growth
AITue 30 May 2023 06:40 GMT
ChatGPT’s Bogus Citations Land US Lawyer in Hot Water
AIMon 29 May 2023 20:30 GMT
Sandbox Founder Remains Bullish on Metaverse ‘Marathon of Many Sprints’
CryptocurrenciesMon 29 May 2023 17:00 GMT
Hong Kong Police Launch Metaverse Platform to Fight Cyber Crime