A global pandemic, record unemployment and nationwide protests have left

people reeling. Through it all though, there's been TikTok, providing

moments of levity and new dance crazes, interspersed with more serious

commentary on the issues that we face.

TikTok, it's like the party you want to be at, a t the moment.

You'll see hair tutorials, cooking tutorials.

People can create challenges, they can create duets, th ey can interact,

they can engage. TikTok is the most downloaded app of 2020.

Since its global release less than two years ago, TikTok and its Chinese

counterpart, Douyin, have amassed 800 million monthly active users, more

than Reddit, Snapchat or Twitter.

Its parent company, ByteDance, is the most valuable startup in the world.

Its reach might surprise you unless you're a member of Gen Z or the parent

of one. But as millions scramble for connection amidst quarantines, more

and more users of all ages are hopping aboard.

We're all just kind of going through the same thing together.

And we happen to be documenting it all through TikTok.

It's not all rosy, though.

The Chinese-owned app faces a slew of regulatory hurdles, privacy concerns

and allegations of censorship.

Amidst these struggles, it's brought in a new CEO.

This guy is Kevin Mayer.

Formerly the Head of Streaming at Disney.

That's basically what Kevin Mayer's first priority needs to be, is to make

sure that Americans trust TikTok.

In the long run, that may prove complicated.

But in the short term, it hasn't prevented tens of thousands of new users

from signing up. The predecessor to TikTok was an app

called Musical.ly. Founded in 2014, it provided a platform for users to

create short, 15 second videos set to a song of their choice.

The content mostly involved lip-syncing and dancing, and it took off

quickly among preteens and teens in the U.S.

This is an app that was built around the fact that there was music that was

licensed to be used on this app.

This was something that Musical.ly decided really to invest in, because

they knew that music and sharing music was inherently social.

By July 2015, a year after its launch, Musical.ly reached number one in the

iTunes app store.

It continued to grow and was bought by the Beijing-based startup ByteDance

for one billion dollars in 2017.

ByteDance already owned Tik Tok, a similar video sharing platform, and

merged the two apps less than a year later.

Now TikTok's main office is in Los Angeles, California.

They're essentially an American startup that is subsidized by a successful

Chinese tech company.

As the app has grown, it's given rise to a whole new pack of social media

celebrities. Content is public by default on TikTok, and the algorithm

that determines what appears on a user's home page gives every creator the

chance to put their video in front of millions.

Really what we saw was a different style of humor.

It wasn't the sketches that you saw on Vine, and it wasn't longer-form

YouTube videos. It was meme culture or like the general public's take on a

meme. What I enjoyed about it is there was some deeper humor in there if

you were paying attention to the trends that were happening.

On Ti kTok, King uses creative video editing to make it look like he's

performing magic tricks, a skill which has earned him over 44 million

followers, the second most on the app as of June 2020.

But at 30, King represents the rare millennial that's broken into TikTok's

top ranks. Many of the most followed users are in their teens, and lip

syncing and dancing remain wildly popular.

So I originally started when I was 14 years old, and so I started using my

facial expressions and hand motions to make these like larger than life

lip sync videos.

And as I grew up, I think the app also grew up.

Now there's so much more that you can do.

While Martin has found her niche with dancing and lifestyle content, she

says there's something out there for everyone.

There's like creators who are huge when it comes to comedy, some still do

lip syncing, some cooking videos, tutorials.

You can do whatever you want as long as it's fun, it's quick and it

catches people's eye.

Stay at home orders have propelled the app's rapid growth in the United

States. So between October and March, according to research fro m

Comscore, its unique visitors has grown from 27 million to 52 million, so

doubled in the past five months.

And within that time period, just in March alone, according to Comscore

TikTok added 12 million new unique visitors.

People in the U.S.

on TikTok spent more time on TikTok than Instagram users spent on

Instagram or Snapchat users spent on Snapchat in the month of March.

That's a big deal since Snap and Instagram are two of the app's main

competitors. They're all extremely popular among young users, b ut in the

U.S. at least, TikTok still has some catching up to do.

We estimate that this year TikTok will have 45 million users.

But Instagram, we're estimating will have over 110 million and Snapchat

will have 85 million users.

But TikTok is also huge abroad, especially in India and China.

In China, it operates as a technically separate but very similar app

called Douyin. And in the first quarter of 2020, TikTok and Douyin were

downloaded 315 million times globally, a 68 percent increase over the

previous year. In April, the company reached two billion overall

downloads. India is by far the app's largest market when it comes to

downloads, accounting for 30.3 percent of the total.

But China is definitely the largest from a revenue standpoint, accounting

for about 72 percent of total spending on the app.

The U.S. is third in terms of downloads and second in terms of revenue,

and its influence continues to grow.

Viral dances and memes have propelled a number of songs to the top of the

U.S. charts, most famously, Old Town Road in 2019 .

And now the moms, dads and siblings of the TikTok o bsessed have started

to get in on the trends as well, learning dances and performing challenges

together. You're still laughing at them, but actually the fact that

parents are getting on it, I mean they needed that demo so badly to even

make it to this level that they're at now.

In order to build out a sustainable revenue model, e xperts say that TikTok

eventually needs to attract older users.

Advertisers are going after broader demographics and especially those with

purchasing power.

But TikTok is not under immediate pressure to make money just yet.

Its parent company ByteDance is valued at over 100 billion dollars and

made three billion dollars in revenue last year.

That's because it owns a host of other, more profitable Chinese apps, most

notably Douyin and a news aggregator called Toutiao.

TikTok's revenue model is still very, very nascent.

This is a company that has some advertising, we have some of the users

starting to do sponsorships.

But at the end of the day, this is a company with hundreds of millions of

users here in the U.S.

that's still not making as much money as it could some day.

Monetization aside, many say that CEO Kevin Mayer's first priority needs to

be the regulatory and privacy concerns facing the app, which stem from its

Chinese ownership as well as its popularity among children.

You know, it's never been the case that so many Americans are putting so

much of their visual data in the hands of a Chinese company.

And as we know, the relationship between the Chinese government and

Chinese corporations is a pretty tight one.

While TikTok claims that all American user's data is stored within the U.S.

and is not subject to Chinese law, many security experts remain skeptical.

Similar concerns exists in India, where data protection laws are weaker

and thus citizens are more vulnerable.

Regulators are going to be very weary of that separation.

Where's the data held?

What's the cross-pollination look like?

A number of incidents over the years have provided ample reason for worry.

An investigation by The Guardian last September revealed that TikTok

moderators were instructed to censor videos related to Tiananmen Square

and other content deemed sensitive by the Chinese government.

While the company claimed that these guidelines had been phased out by the

time of the investigation, it still helped spur the Federal Committee on

Foreign Investment in the United States to open an ongoing review into

ByteDance's acquisition of Musical.ly.

It seems unlikely that ByteDance would be forced to divest itself of what

was Musical.ly, now is TikTok.

But I do think that this all speaks to the great amount of concern and

oversight over this app that's gone from a tiny little thing to this huge

powerhouse. Most recently, the app received criticism for what it said was

a technical glitch, in which post tagged with #BlackLivesMatter and

#GeorgeFloyd appeared to have zero views when they actually have over two

billion. And in the past, both India and Indonesia have instituted brief

bans on the app due to concerns over inappropriate content like violence

and pornography. Lastly, there are ongoing issues regarding children's

privacy. Users under 13 are technically not allowed on TikTok, but there's

not much really preventing them from signing up.

In February 2019, the company paid 5.7 million dollars to the FTC to

settle charges that it was illegally collecting children's personal

information. This then prompted the U.K.

to conduct their own investigation into the matter.

While TikTok said it would make changes, in May 2020 a coalition of

consumer groups filed a complaint stating that TikTok had not kept its

promises. It's all undoubtedly a lot for Mayer to inherit.

But given his background at Disney, some say he may be exactly the right

person to address these concerns.

So he is someone who has experience dealing with regulation, dealing with

oversight, and especially dealing with online security issues, which are

certainly front of mind for TikTok as they navigate their relationship

with the FTC. If Mayer can secure the trust of U.S.

consumers and investors, Byt eDance could be well positioned for an IPO in

the next year or two. Beyond that, experts say that TikTok's long-term

prospects depend upon its ability to keep users engaged while building out

a sustainable monetization strategy.

YouTube could be seen as a model in the way that YouTube shares advertising

revenue with its content creators.

Mayer's background in streaming services also has both analysts and

creators excited about what new forms of content may lie on the horizon.

I have been begging TikTok to get into the streaming game.

People have speculated that TikTok might get involved in original

programming. To make TikTok sustainable, you're going to have to do

long-form content.

I don't see a version where you make 60 second videos forever and it stays

cool for another two to three years.

King also says TikTok's live-streaming feature has room to grow.

It's super popular in China, but hasn't yet taken off in the U.S.

I think what's next for TikTok is how they figure out how to make money,

how they figure out how to create a home for advertisers, and how they

make sure that content creators themselves want to stick around and don't

want to go jump off to whatever the next cool app is going to be.