How TikTok is Transforming Content Consumption

Remember when shows used to air each week live and in order to watch the show you had to be tuned in at the predetermined time? For me that show was The Office, I would look forward to Thursday night’s when it would air. I would have to watch through 8 minutes of commercials just so I could watch 22 minutes of content. A lot has changed in the way we view content since 2008. With the introduction of Netflix, specifically in its current form, every season of The Office became available on demand without ever seeing a commercial. If you ever need to pull up a specific scene of The Office, there is YouTube allowing you to watch as many clips as you desire with a few 15 second commercials here and there. This shows over a thirteen-year period of time how quickly things have evolved in the way we consume content. What if you could cut out the ads, cut out the expensive studios and use AI to master what content a user sees all while increasing their screen time to unprecedented levels? Well this is essentially the business model of TikTok.

TikTok which was founded in China in September of 2016 by the company ByteDance and is known in China as Duoyin, which explains why their logo is shaped more like a d than a t. The company was created with AI at the forefront of their business strategy. TikTok uses AI in two ways, the first is very simple and not different from what YouTube, Netflix and Instagram do in that they track how long each video is watched by each user and look to customize the content users see so they watch as much as possible. What differentiates TikTok’s platform is the videos are short, usually less than 60 seconds, enabling the algorithm to collect a lot of data very quickly. The second and much more unique way that TikTok uses AI is in helping content creators edit their content and create viral videos. On most applications when content creators film a video the editing becomes the most cumbersome part, it can require hours of editing to get a fifteen-minute video. This is one of the many reasons that content creators on YouTube post weekly opposed to every day, the editing can be very tedious. TikTok looks to eliminate this friction through AI. The AI software embedded in the app has editing capabilities making it easier for content creators to quickly upload videos and have more content to post. “With TikTok, users can film, add filters, cut/paste clips, overlay audio, leverage sophisticated AR, and more due to the company’s high research investment into “computer vision [and] virtual reality” (HBS, 2019). This creates a cycle of easy content for the consumers and makes creating viral videos even more accessible. The below figure shows that as of 2019 this strategy and investment in technology is working. TikTok is shattering the competition when it comes to screen time.

TikTok at almost 2X the next company

TikTok currently makes money though selling adds on its platform that are seen by users. With over 2 billion downloads of the app the company is not short of eyes looking to view their apps. Exact figures of how much ByteDance makes from TikTok is complicated and unclear as the information is not publically available. ByteDance is a private company however analysts value ByteDance as high as $180 Billion according to CNBC. (CNBC, 2020)

From a business perspective it is very significant what TikTok has been able to accomplish. Consumer’s attention spans have been dwindling for years and as cable companies have struggled with how to adapt to this TikTok took in one step further. Instead of paying millions to create content as the big studios do they created a platform for short easy to maneuver content attracting billions of users which will translate to attracting billions of dollars in advertising dollars.

I have never used TikTok personally, but I am sure we have all seen a TikTok video even if it was not directly on the TikTok platform. I am personally a big fan of cooking shows and predominantly watch them on YouTube. Earlier this month, March of 2021, YouTube released a beta version of what it calls “YouTube Shorts”. These are essentially TikTok videos on the YouTube platform, in fact the majority of the videos that I see are filmed on the TikTok platform and then uploaded by the content creators to YouTube. This as significant because in addition to influencing the way that consumers view content TikTok is influencing the way that other companies do business. This is a trend that I believe is here to stay for a variety of reasons but most importantly if I can watch Kevin Malone make Kevin’s Famous Chili in sixty seconds why would I watch the same video over fifteen minutes?

Kevin’s Famous Chili

It will be interesting to see where TikTok goes over the next decade. Will their AI be able to evolve to the level at which it needs to remain the leader of the pack? Will it be able to avoid legal issues in the United States? These are complex questions that the leadership at ByteDance will have to navigate.

Articles:

https://www.cnbc.com/2020/05/27/tiktok-bytedance-profit.html

11 comments

  1. therealerindee · ·

    I do not use or view videos on TikTok, but I have heard from many different people that the AI is so good they find themselves in like 3 hour long worm holes of just clip after clip. Which begs the question, don’t you have the attention span for a full show at that point? Or is the fact that the content is consistently changing to show you even more things you like the only way you view that long? Jury is out, but TikTok has definitely mastered the correct AI algorithm for the goal of the app.

  2. Will be interesting to see if TikTok will become something other than the pandemic fad of 2020. I do have to say, though, Disney + rolled out WandaVision one episode/ week, and it was nice to go back to the “good old days” of TV watching.

  3. Scott Siegler · ·

    “The trick is to undercook the onions, everyone is going to get to know each other in the pot.” I appreciate the reference to this classic episode of the Office, and I also appreciate reading this article from the perspective of someone else who hasn’t touched TikTok on a personal level. You make some great points about it changing the way people are consuming content and also influencing the way companies are creating content, and I hadn’t thought about that on a very deep level until now. I can see myself eventually using TikTok in the future based on this uniqueness that it offers.

  4. abigailholler1 · ·

    It certainly feels like TikTok has taken the world by storm (or dance)! While I can’t say I’m an avid TikTok-er either, I will admit I downloaded the app for about 2 weeks, and then deleted it over privacy concerns of the app. I’m actually a bit surprised that the privacy concerns and looming legal issues in the US haven’t stunted TikTok’s user base growth more in the US. I guess it’s an example of the creepy/cool line shifting a little towards the ‘cool’ side for younger generations!!

  5. Jie Zhao · ·

    I also have not used TikTok before, but I am guilty of falling into Facebook/Youtube video rabbit hole, it’s like they know exactly what I want to watch next! I am interested to find out more about how TikTok will impact our memory span, especially on kids and teenagers. Yesterday, I was in the car with my 14-year-old cousin for an hour, and the entire time he was watching TikTok, and seems like no matter much he scrolls the contents just keeps on coming. I’d also be interested in what is TikTok’s AI technology’s advantages over other platforms such as Instagram as it also has its short video feature (Reels) which to have becoming increasingly popular but definitely not as much as TikTok.

  6. alexcarey94 · ·

    Contrary to what other’s have said above I have a Tik Tok and can attest that the algorithm is so good it pulls up videos that are something you would directly be looking for. You will see in my presentation this week how brands are also using AI to understand the best influencers on platforms like Tik Tok to use to sponsor their products through both Natural Language Processing and computer vision.

  7. I have used Douyin for a while, and I have uninstalled and installed it again at least 4 times. Their recommendation algorithm is so powerful that you didn’t even realize you have already spent hours on it every day. Every time I was realized that I spent too much time on it, I would uninstall it, but then after a couple of weeks reinstall it back. It’s like a “drug” that once you are in it, it’s hard to leave, which concerns me a lot especially for teenagers who don’t know how to “control themselves”.

  8. lourdessanfeliu · ·

    This was a very nice post! I have installed and uninstalled the tiktok app multiple times during the pandemic and as Alex mentioned the algorithm is pretty great at showing the content you would be interested in.. While I don’t currently use the app, I do feel the younger generations are going to continue using the app and it will not be just a 2020 fad.

  9. marissaspletter · ·

    Having younger siblings, I can attest that the AI algorithms keep the younger users trapped in. Similar to Vine, Tik Tok strategically crafted videos short enough for anyone’s attention span. The platform also shares quick recipe videos, that I prefer to watch rather than a 15-minute YouTube video (but I will not speak on what the people eating my food would prefer).

  10. kellywwbcedu · ·

    I can attest to the addictive nature of TikTok. I downloaded it this summer and would be on it for hours. It has mindless, entertaining content that seems never-ending. I also proclaimed that my sole purpose in life was to go viral on TikTok (which I accomplished twice… not bragging). TikTok seems to be attracting older demographics now as well, and I believe they have done a better job of this than other social media platforms. With the other social media giants following TikTok’s model, it will be interesting to see if they are able to maintain this dominant run that they are on.

  11. AndraeAllen · ·

    Famous Chilli in 60 seconds! Please share that link!
    I too am not a TikToker but I have watched people fall into the rabbit hole of content. When I read that TikTok is valued at 180 billion dollars, a quick does not compute message appeared between my eyes and the screen. Are our eyes really this valuable? I get that a lot of companies follow the mantra of “What got us here won’t get us there.” But at what point will changing the product that brought you success actually back fire and cost you customers. Thanks for the post!

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