As the world goes into quarantine, people are looking for ways to combat boredom. TikTok, owned by Bytedance, is one of the escape routes, with millions of users flocking to the platform for some much-needed entertainment.
Little of this is high-brow viewing. But the short, light-hearted content is meeting a need at an anxious time. Celebrities are joining in: Hailey Bieber, the wife of pop icon Justin Bieber, posted on TikTok for the first time last week, doing a short dance routine with her husband; basketball star LeBron James also shared a video of himself dancing with his family.
“Instead of watching the news and panicking, TikTok is full of witty content that will give your brain a well-deserved break,” MTV writes.
With TikTok now taking the world by storm, does Facebook have reason to be worried? TikTok’s customers are younger people: 60% of users in the US are between 16 and 24, for instance. And as both social media platforms sell ads, they are competing for business. TikTok is already pitching hard to Facebook’s advertising clients.
Back in China, news has surfaced that Bytedance has also put Rmb180 million ($25.7 million) into a Series B funding for China-based celebrity management agency Mountain Top, 36Kr reports. Founded in 2014, Mountain Top is a talent agency with a roster of almost 50 television stars and online influencers, including actresses Zhou Dongyu and Angelababy.
TMT Post, a tech and telecoms news blog, has reported speculation that Mountain Top has already been valued at Rmb5 billion. But profits have been slower to grow, with the company barely breaking even last year. “Part of the reason is that the industry is in a downturn. But when it comes to the A-list stars Mountain Top has signed, the commissions it takes are very limited,” an insider told the blog. “Celebrities have enormous bargaining power over their management company. At best the manager takes a 20% share but more often than not they only get a 10% cut. So in essence, signing these big stars can contribute very little to the company’s bottom line.”
Bytedance is not solely interested in the list of celebrities under management, says thePaper.cn. The newspaper thinks that the internet giant is more focused on aligning with Mountain Top’s multichannel network (MCN) business.
Among the KOLs (i.e. key opinion leaders on social media) on the roster, Mountain Top’s biggest star is comedian and short video queen Papi Jiang (for more see WiC383). Back in 2016 it also became the largest shareholder in Papi Jiang’s MCN PapiTube, which helps content creators make material for short-video platforms. In return it takes a cut of their advertising income or a small percentage of the revenues of the products they sell. PapiTube has helped to launch the careers of many young content creators, a lot of whom have garnered large social media followings.
“Even though it seems like the celebrity halo of A-list stars like Angelababy and Zhou Dongyu is worth more than Papi Jiang, when it comes to Bytedance’s existing business and future strategic planning, its interest in PapiTube is much stronger. It is obvious that the earning power of more traditional celebrities has reached a peak, while the influencer culture has only just started to take off. What is truly going to help enhance Bytedance’s short video platform is going to be Papi Jiang and all the comedians on PapiTube,” thePaper.cn reckons.
The MCN sector has also transformed into an investor darling as the influencer sub-culture proves its commercial worth. One example is Saturday, a shoemaker-turned-MCN, which has seen its share price increase 220% since mid-December. Saturday has had success managing some of the most popular content creators on short-video platforms like Douyin, Kuaishou and Taobao Live.
“Since 2018, Bytedance has been acquiring stakes in companies like online literature platform Wuli Culture and comics app Kuaikan Manhua, just to name a few. In addition to that, it has also laid the track for search and mobile games. It is clear that in 2020, the internet giant is going to makes a lot of waves in the content ecosystem that will put it in the crosshairs of Tencent and Sina,” predicted TMT Post.
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