- TikTok has dominated headlines in 2020 as both a fast-growing app and an alleged national security risk facing a potential ban in the US.
- With so much chatter around its early success and political issues, TikTok has regularly made its way into investor and analyst calls this year.
- Execs at media giants like Netflix, Snapchat, and Twitter; e-commerce businesses like eBay and Shopify; ad holding companies like WPP and Publicis Groupe; and music industry players like Spotify and Warner Music Group have all spoken with investors about TikTok's impact on their respective businesses.
- Here are the key takeaways from Business Insider's analysis of hundreds of company transcripts powered by the financial research firm Sentieo Inc.
- Visit Business Insider's homepage for more stories.
It's been a noisy year for TikTok.
After smashing downloads records at the start of the year, the ByteDance-owned app was blocked in India and later became a target of the Trump administration, which is pushing for a US ban or forced sale.
With so much buzz around its early success and political issues, TikTok has regularly made its way into the investor calls of its competitors, partners, and customers.
Dozens of executives across a huge swath of industries have mused about TikTok to investors this year, according to a Business Insider review of hundreds of company transcripts powered by the financial research firm Sentieo Inc.
The number of times TikTok was mentioned at least once in a company transcript jumped 430% between 2019 and 2020 (through November) in Sentieo's data set.
Execs at media giants like Netflix, Snapchat, and Twitter; e-commerce businesses like eBay and Shopify; ad holding companies like WPP and Publicis Groupe; and music industry players like Spotify and Warner Music Group have all chatted with investors about TikTok's impact on their respective businesses.
Here are some of the top companies that have discussed TikTok with investors and analysts this year:
- Advertising: Publicis Groupe, WPP
- CPG: McCormick & Company, Reckitt Benckiser
- Cybersecurity: Intrusion, Cloudflare, WISeKey
- E-commerce: Shopify, eBay, Asos
- Finance: PagSeguro Digital, SoftBank Group
- Gaming and Esports: Ubisoft, Score Media and Gaming (The Score), Super League Gaming
- Media: Netflix, Snapchat, Twitter, IAC, JOYY Inc. (owns TikTok competitor Likee)
- Music: Spotify, Warner Music Group, Vivendi SA (owns Universal Music Group), Saregama, The Singing Machine Company, LiveXLive Media, Hipgnosis Songs Fund
- Retail: Walmart, Dunkin', Westwing Group AG, Abercrombie & Fitch, Vera Bradley, American Eagle Outfitters, Ralph Lauren Corporation, Superdry, Crocs
- Tech: Oracle Corporation, Microsoft, Fastly, Salesforce
In conversations with investors, CEOs have considered the threat TikTok poses to their bottom line, its effectiveness as a marketing tool, its impact on the music and gaming industries, and what a forced sale or outright ban would mean for their businesses.
The general consensus is that TikTok, like its social-media rivals YouTube and Instagram, should be taken seriously.
"Five years ago I didn't think there would be something called TikTok with dance videos being shared," Adam Blitzer, an executive vice president and GM at Salesforce, told investors during an April call. "But you can certainly bet that that trend will continue. And so if that trend is going to continue, you want to be at the center of it."
What a TikTok ban or sale could mean for a company's bottom line
The broader conversation around TikTok in 2020 has centered on the app as an alleged national security risk, leading to threats of a ban or forced sale by the Trump administration. That narrative has bled into conversations with investors and had a tangible impact on the businesses of its partners.
During earnings and analyst calls, cybersecurity and data center companies like WISeKey, Cloudflare, and CyrusOne have all used TikTok as an example of why companies should be thoughtful about data security and where they host their data centers.
The San Francisco-based cloud-computing company Fastly's largest customer was TikTok before ByteDance pulled much of its business away in the third quarter due to "the potential of a prohibition of U.S. companies being able to work with this customer."
In India, where a ban on TikTok has been in full force since June, analysts and investors have asked companies how they've adapted to TikTok's absence and if they'd consider taking its place in the country.
François-Charles Sirois, executive chairman at the Indian telecom company OnMobile, explained to investors in August why it didn't make sense for the company to make a TikTok copycat to fill the void.
"I think that we would get beaten out in the market with all the others currently doing that," Sirois said. "So unfortunately, we will not address this market."
In October, Indian music label Saregama's executive director Vikram Mehra explained how the company had shifted its licensing strategy after TikTok's removal.
"In India, there have been a large number of these video-sharing apps that have come up," Mehra said. "There are multiple of these coming in the market, which, again, gives a great opportunity for labels like ours to go and give them music licenses."
Competitors like Snapchat have acknowledged TikTok as a threat
TikTok entered 2020 with significant momentum, surpassing two billion downloads globally by April. With its swift rise, executives at Snapchat, Twitter, and Netflix have all either been asked about TikTok on investor calls or proactively addressed the risk it poses to their businesses.
"TikTok is much more focused on entertainment and really driven by user-generated content, premium user-generated content," Snap Inc. CEO Evan Spiegel said at J.P. Morgan's Global Technology, Media and Communications Conference in May. "But they're going to be very competitive, I think, in the market. They're going to do a great job continuing to grow their business. They're extremely aggressive, and we really admire them, frankly, and have learned a lot from them."
At the time, Spiegel sought to differentiate Snapchat's product from TikTok's, noting that Snapchat was "really focused on your core friends and family" while TikTok was focused on user-generated entertainment. But the company has since released a series of new features to compete with TikTok, including a TikTok-like tab called Spotlight.
Twitter has yet to release its own TikTok copycat functionality (though the company did recently launch a Snapchat-inspired feature called "Fleets"). But an Oppenheimer analyst asked Twitter's CFO Ned D. Segal in August whether the company would consider rebooting its now-defunct short-video brand Vine to compete with TikTok. Segal didn't shut down the idea entirely.
And Netflix co-CEO Reed Hastings listed TikTok as a competitor alongside YouTube, HBO, and Fortnite during the company's third-quarter earnings in October. Netflix is currently testing a vertical feed of short videos called "Fast Laughs," according to TechCrunch.
Music execs have addressed TikTok's impact on the industry during calls with investors
While TikTok may pose a challenge to other media platforms, it's been a boon for companies in the music industry who have regularly talked up the app during analyst and investor calls.
"Eighteen months ago, nobody had heard of TikTok," Stephen Cooper, Warner Music Group's CEO, said at Goldman Sachs's Communacopia Conference in September. "Now it's one of the largest platforms on the planet, and there would be no TikTok without music."
"The way the TikTok users are utilizing that service from at least our perspective, increases the ability of music to go viral," Cooper later told investors during the company's Q4 earnings call in November.
Cooper was one of several music industry execs who discussed TikTok with investors this year. The app's outsize impact on the music industry has been undeniable as record labels and artists have made songs chart by tapping into existing TikTok fads, creating original songs for the app, or adapting tracks to work better for TikTok's short-video format.
"TikTok is a great discovery vehicle for music as it is for a lot of cultural memes that's going on in the world today," Spotify's CEO Daniel G. Ek told investors during the company's third-quarter earnings call in October. "To the extent that we're looking at something like TikTok, it is more about giving our artists, looking at what they're doing on that platform and making sure we provide more creative ways that allows them to express themselves on our platform, too."
A slew of other music industry businesses like Vivendi SA (owner of Universal Music Group), the concert-streaming company LiveXLive Media, karaoke brand The Singing Machine Company, and song management company Hipgnosis Songs Fund all explained to investors how TikTok had boosted their businesses either through direct partnerships or positive ripple effects from the attention it's brought to music.
"The music industry is benefiting from emerging fitness and social platforms, including Peloton, TikTok, and Triller, that have all seen a surge in usage during recent months," Hipgnosis' CFO Chris Helm said at the company's Capital Markets day for analysts and investors in September. "These platforms and similar apps will deliver incremental revenues to Hipgnosis over and above forecast during the coming months and years."
Bragging about billions of views on TikTok (and complaining about the app's trolls)
One consistent (and unsurprising) trend among execs who mentioned TikTok in investor calls was the tendency to boast about their marketing successes on the app.
Leaders at companies like e.l.f. Beauty, Crocs, toy and entertainment brand Spin Master Corp., Abercrombie & Fitch, fashion retailer Asos, video-game company Ubisoft, and CPG giant Reckitt Benckiser all highlighted the billions of views they'd garnered from TikTok marketing efforts (TikTok has yet to publicly define what it counts as a "view").
But not all executives were happy with their brands going viral on TikTok.
Life360, a social app that helps parents keep track of their kids through location sharing, drew the ire of TikTok's young user base who viewed its tool as snooping and launched a coordinated campaign to flood the app with one-star ratings on Google Play and the Apple App Store.
The internet trolling, which in some cases involved directly mocking Life360's CEO Chris Hulls, elicited a public response from the company during two earnings calls.
"During the lockdown, we've also been part of an organized TikTok campaign by a small group of teenage influencers who have been spamming certain apps such as video conferencing and homework apps with one star ratings and reviews," Hulls said in April.
In the company's third-quarter earnings in October, Hulls (who has become a TikTok star himself) provided an update on its public relations showdown with TikTokers.
"We have continued to engage with the teens, and during the quarter, launched a new bubbles feature which provides the option of greater location privacy while maintaining all the safety features that are important to parents," he said.
Hulls then went on to boast about the company's billions of views on TikTok.
"Our recent TikTok Hashtag challenge has generated more than 4 billion views and overwhelmingly positive sentiment from teens," he said. "We are seeing encouraging early signs of a recovery in our iOS app store ratings, which have now increased to more than 4 stars."
Read more about TikTok's impact on the music and media industries below:
- How the 'Planet Money' TikTok account has become a breakout hit through careful scripting, engaging in the comments, and making a 24-year-old its star: "Planet Money" is one of the few traditional media brands that have successfully ported content over to TikTok.
- ViacomCBS is betting that pitting aspiring TikTok stars against each other can lead to its next reality TV hit: AwesomenessTV, a division within ViacomCBS focused on digital content, released its first TikTok reality show "AwesomenessTV's Next Influencer" last month.
- How a 91-year-old record label is using TikTok to promote its artists, including hiring micro influencers to spark trends: RCA Records' digital marketing lead, Tarek Al-Hamdouni, walked Business Insider through the label's strategy for promoting artists and songs on TikTok.
Disclosure: Mathias Döpfner, CEO of Business Insider’s parent company, Axel Springer, is a Netflix board member.
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