TikTok Has Forced Its Competitors To Adopt A Less Lucrative Business Model

Whether there is a ban on the TikTok app or not, one thing is for sure. The leading social media app has definitely played a part in forcing its competitors to take on less lucrative business models.

The platform’s CEO is all set to testify before the US Senate and there is no doubt that he’ll be grilled left and right regarding the many woes and worries that the country has regarding the app being a threat to America’s national security.

But as the grumbles from Capitol Hill increase with each passing day, the shares of Pinterest, Meta, and Snapchat get higher.

The fate of TikTok is hanging on by a thread as critics fear sanctions are on the way and a possible division of the firm from its leading Chinese-owned parent company ByteDance.

If it stays great but in case it does end up leaving, we cannot forget how it has managed to alter the world of social media forever. And it’s safe to say that it’s going to make it hard for incumbent apps on social media to survive, keeping in mind this trend.

Over a span of just six years or less, we saw the platform wean the world away from old tactics linked to social media and networking while getting addicted to videos that were short form in design. Algorithms were carefully curated to favor this type of content and users started to adore it. But the problem here is that this model makes it so much more difficult to produce funds than older ones, and it would always be doing so.

To put things into better perspective, TikTok monetizes its respective audience in the US at just $0.31 each hour. Moreover, in the year 2023, it’s going to make only $67 from the average user located in the US.

This is in stark comparison to apps like Instagram where users will be making $200 and even more than that!

Thanks to insights from Insider Intelligence, it was revealed how the TikTok platform compares against others in terms of ad spending in 2023.

Snapchat was in a close tie with TikTok at $0.38 per hour while Meta’s Facebook stood at $0.9. But Instagram seems to be minting the most profits with nearly $1.7 per hour. How’s that for a unique array of stats?

H/T: Economist

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