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One of the most divisive debates of 2024 is whether or not the United States government should ban TikTok in the United States. The ban offers ByteDance, the creator of the app TikTok, the option of selling to an American company or being removed from US consumption within six months of the ban taking place. On March 13, 2024, the House of Representatives passed the TikTok ban bill. It is set to head to the Senate, where the outcome is unclear. Considering this possibility, let’s look at TikTok’s financial impact in the United States and its correlation to other nations using the social media platform.
TikTok, launched in September 2016, has rapidly grown to boast over 1 billion monthly active users, making it the fourth-largest social media platform globally. In 2023, TikTok reported an impressive $14.3 billion in annual revenue. Its rise to prominence is notable, particularly considering its acquisition of Musical.ly in November 2017 for $1 billion, which facilitated adding 80 million US users to the platform. Notably, in 2023, TikTok surpassed all other social media apps to become the most downloaded app in the United States, with over 47 million downloads. This achievement overshadowed the download counts of Facebook and Instagram, which came in at second and third place, respectively, with 35 million and 34 million downloads.
Every day, over 750 million users in China access Douyin, the local version of TikTok. While similar in concept, Douyin caters to Chinese markets with distinct features, user demographics, and content preferences. This app is expected to generate a substantial $20.81 billion in ad revenue this year, contributing significantly to the Chinese economy. In contrast, TikTok’s revenue in the United States reached $16 billion in 2023. Despite this, it accounted for only 13% of ByteDance’s $120 billion global turnover. Considering the significant revenue generated by both TikTok and Douyin, a potential ban on TikTok in the United States would impact the American economy and disrupt the global market dynamics of short-video sharing platforms.
ByteDance, the parent company of TikTok, plays a significant role in global employment, with over 38,408 jobs attributed to its operations worldwide. TikTok supports over 7,000 jobs in the United States alone, making it a substantial contributor to the American workforce. If the proposed ban on TikTok moves forward, it could lead to significant turmoil for thousands of citizens who rely on these jobs for their livelihoods. Furthermore, the ban would have broader implications for TikTok’s global standing in the competitive landscape of short-video sharing services. Should the ban occur, Meta (formerly Facebook) is estimated to capture approximately 75% of TikTok’s revenue, with Alphabet (Google) and Snap Inc. projected to capture 15% and 10% respectively. This shift in market dynamics could have far-reaching consequences for both the social media industry and the economy.
In conclusion, the potential ban on TikTok in the United States represents a pivotal moment in the intersection of technology, national security, and global economics. With the House of Representatives already passing the TikTok ban bill and the Senate’s decision pending, the outcome remains uncertain. However, the implications of such a ban are significant, affecting not only the American economy but also global market dynamics and employment opportunities. As discussions continue, it’s essential to consider the broader ramifications and seek solutions that balance national security concerns with preserving economic prosperity and technological innovation. Ultimately, the fate of TikTok and its impact on society will be determined by the decisions made by policymakers and stakeholders in the months to come.
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