TikTok as a Platform: Ownership, Revenue, and Infrastructure

Introduction

Social media has significantly transformed human interaction, driven largely by the continuous innovations and applications integrated into its ecosystem. One such application is the widely known TikTok app. Developed and launched by ByteDance, a Beijing-based company, TikTok offers its users a platform for creating and sharing lip-sync videos, short music clips, and looping videos, among other content formats. Emerging in 2018 as the first most-downloaded Chinese app in the United States, TikTok has an approximate global user base of over one billion people. In the context of its economic and infrastructural status and significance, this paper explores TikTok with regard to its ownership, revenue and sources of that revenue, and key market attributes.

TikTok as a Multi-Sided Market Platform

According to the platform concept proposed by Poell et al. (3), TikTok is a multi-sided market platform. This is because it efficiently connects end-users, content creators, and advertisers within its ecosystem (Tiwana 61). Through advanced leveraging of artificial intelligence, the platform has created a personalized experience for all its users. End-users receive recommendations based on their viewing history, while complementors—that is, content creators and advertisers—receive information on the latest trends to help target their content. This network system works efficiently because each group of users affects the satisfaction of the others.

In considering TikTok's platformization, the following perspectives are examined: business studies, software and platform studies, political economy, and cultural studies (Nieborg, David, and Anne Helmond 4276). From a business perspective, TikTok generated approximately $179.6 million in 2019 alone. Although its revenue generation model has not been fully settled, TikTok mostly generates income through in-app purchases, advertising options, and crowdfunding.

With regard to revenue generation for complementors, especially content creators, TikTok does not offer a direct monetization pathway. Instead, influential creators tend to refer their TikTok followers to their already-monetized platforms elsewhere, such as YouTube channels. While this is not an insurmountable limitation, a more effective approach to ensuring complementor loyalty would be to integrate a built-in monetization option. Doing so would allow content creators to derive value from their creativity, and the resulting increase in content would keep primary users more engaged.

Political and Cultural Dimensions

Viewed from a political perspective, TikTok's potential for reaching a broad audience with personalized campaign advertisements is quite evident. Some users have also employed the platform to create short videos voicing political views and promoting political agendas. A comparable example can be found in Facebook's alleged influence on a recent American election through Russian interference. Given the advanced personalization and predictive capacity of TikTok's algorithms, its political significance cannot be overstated and may well require regulatory attention.

In terms of cultural practices and significance, TikTok provides an avenue for content creators around the world to showcase their cultures and aesthetics. While this has the potential to promote cultural appreciation, enlightenment, and tourist interest, the censorship policies applied to TikTok's content impose real constraints. Several countries have raised issues with TikTok on religious and cultural grounds. For example, India banned TikTok in 2019 on the basis of "inappropriateness of content," reasoning that the app had the potential to introduce poor morals and values to young people.

Additionally, some users have raised concerns over TikTok's censorship of content that portrays China in a negative light. While it may be tempting to attribute this censorship to TikTok's prerogative as a Chinese company, such filtering introduces a bias—particularly when it conflicts with the expressive needs of other users. However, since cultural appropriateness is largely subjective, a video creation platform like TikTok can hardly fully control the extent of backlash from affected communities, except through the implementation of country-specific content policies within its platform.

Conclusion

The popular TikTok app, while seemingly streamlined in its current functionality, has been analyzed here as an expanding platform and platform-infrastructure. Due to its existing revenue capacity and the potential for further monetization of its extensive user database, the app holds considerable significance in the technology market. It also exercises infrastructural power over its third-party developers and can have a meaningful economic impact depending on the types of content its complementors are permitted to promote.

Works Cited

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Nieborg, David B., and Anne Helmond. "The Political Economy of Facebook's Platformization in the Mobile Ecosystem: Facebook Messenger as a Platform Instance." Media, Culture & Society, vol. 41, no. 2, 2018, pp. 196–218.

Plantin, Jean-Christophe, et al. "Infrastructure Studies Meet Platform Studies in the Age of Google and Facebook." New Media & Society, vol. 20, no. 1, 2016, pp. 293–310.

Poell, Thomas, David Nieborg, and José van Dijck. "Platformisation." Internet Policy Review, vol. 8, no. 4, 2019. Web. 7 Mar. 2020.

Tiwana, Amrit. "The Value Proposition of Platforms." Platform Ecosystems, 2014, pp. 61–69.