TikTok, the Western social video app, from ByteDance, a major Chinese interactive entertainment company, has become a cause celebre with Donald Trump on one side wanting to ban TikTok, and others contending it is a restraint of free speech and an illegal action by the Trump Administration.

TikTok is the up and coming mobile video app that is growing rapidly in the U.S. and is hugely popular in India and other countries around the world. TikTok has also been recently banned by the Indian Government, in part due to the border tension between China and India.

Due to the Trump Administration’s action against TikTok, ByteDance has been in discussions with Microsoft, Oracle and others, such as Walmart, who has confirmed they are discussing the deal with Microsoft.

TikTok is all about super short video. Another major competitor in the short video digital world is Quibi which launched earlier this year, at a price tag of $4.99 or $7.99 a month, with or without ads respectively.

Quibi received close to $2 billion in financial backing, and was founded by Jeffrey Katzenberg who is Chairman. Katzenberg is well-known in Hollywood as an entertainment and creative success, having co-founded DreamWorks SKG, as well as being the past CEO of DreamWorks Animation. Katzenberg was Chairman of Disney Studios for 10 very successful years before DreamWorks. Katzenberg

recruited Meg Whitman, the former CEO of eBay EBAY -5.3% and former Republican nominee for Governor of California in 2010, to be the CEO of Quibi.

TikTok and Quibi are both short-form, but otherwise these two companies are wildly different. Perhaps the most significant difference is how Quibi and TikTok differently define “short”. Let’s take a look at the key differences between TikTok and Quibi and consider how these differences have led to big success for TikTok, and failing fortunes for Quibi, which is rumored to be considering eliminating their subscription fee and becoming free.

Short-form: While Qubi defines short-form content as 10 minutes, about 100 million Americans have demonstrated with their deep engagement with TikTok, that they prefer truly short videos – no longer than 1 minute and often as short as 15 seconds. In today’s world with multi-tasking run rampant, multiple devices grabbing our attention, and the fast-paced tempo and “click-bait” of digital content, 10 minutes is not really short. Maybe for a senior citizen, but not for a member of the Z or Millennial Generations. Under the category of short hits of digital entertainment, TikTok is besting Quibi.

Pricing: Consumers have shown a deep affection for long-form TV and film content, including a willingness to pay for that content on services like Netflix NFLX -5% and Disney Plus, as well as the majority of American households that subscribe to traditional pay cable and satellite TV. But the advertising supported video content services, like YouTube, Instagram, Facebook, Snapchat, TikTok and others show the great affection of consumers for free content. In the realm of pricing, TikTok’s free content is beating out Quibi’s paid content.

Virality: TikTok makes it super easy to share a video you like (or made) with others by email, posting to Facebook, Instagram, Snapchat, as well as Whats App, Twitter, Facebook Messenger, and text messaging. Yet, Quibi has spurned viral sharing opportunities. Similarly you can readily find TikTok content on YouTube, Facebook, Instagram and other services where TikTok compilations have become top performing videos. Quibi’s content distribution strategy is focused on the Quibi app.

Authenticity vs. Stars: In many cases Quibi has followed the paradigm of traditional Hollywood with big budgets (by digital terms), known actors and famous writers. TikTok’s content is authentic,

refreshing, and relatable because it is created by your relative, your neighbor, or your buddies at school and work. TikTok takes the day for authentic content that appeals to Every-Person (the more modern version of the Everyman concept). Plus, TikTok content is free to make (for TikTok) while Quibi has expensive writing and production budgets for their content.

Additionally, TikTok content has something for everyone from travel and cooking to life hacks, workout tips, and of course, the famous TikTok challenges and dances. A unique type of content has also risen up on TikTok, what I call “intergenerational content”. Perhaps it is driven by the at-home scenario being lived by some many families during the Covid pandemic.

But whatever the reason, TikTok is a great place to find siblings goofing off together, kids and their parents acting out short-skits and interactions, and even a popular Grandma cooking with her grandson. Most TikTok accounts are registered to teens and young adults, but Mom and Dad, plus others from the older generations are hanging out on TikTok too.

When you consider these factors it is not surprising to see that TikTok is riding a tidal wave of consumer appeal, while Quibi is floundering.

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In the midst of a major economic recession, disputes in Washington over further relief payments to Americans, issues of racial injustice, and other important national and international issues, a huge number of Americans (reportedly 100 million) are now faced with a new challenge – the possible banning of Tik Tok which has become very popular in the U.S. over the last year, particularly in the 13 to 34 age groups. Forbes senior editor, Abram Brown, wrote an interesting article recently about the possible motivations for President Trump to want to ban Tik Tok.

Most of the discussion about Tik Tok lately has been around the fear of possible Chinese use of Tik Tok for espionage or privacy/security infringements. Tik Tok is owned by ByteDance, a Chinese-based company.

No one seems to be asking the question, who is going to be most affected by the threatened shutdown of Tik Tok in the U.S., which, of course, are the users of Tik Tok in America. Tik Tok works very hard to support the creators on the app and have launched a $200 million program to fund work by Tik Tok creators. This announcement was received positively by creators and the whole industry that has grown up around them, often called the Creator Economy. Avi Gandhi, Executive Vice President at Wheelhouse, an agency that works closely with influencers/creators said, “We work with a number of creators with major presences on Tik Tok. What we consistently see and hear is that they’re eager to do more for their fans, but can be bottlenecked by resources.”

I recently conducted a national online survey where we see that for the purpose of viewing free digital video, across the entire U.S. adult population, YouTube and Facebook dominate. But when you look at the population of those 18 to 34 years old, you see that Tik Tok has become very popular with a usage number equal to Snapchat, below Instagram, and ahead of Twitter.

Instagram is still the “one to beat” in the 18-34 year old group of video viewers online. And now Instagram is releasing Reels, a direct competitor to TikTok. Instagram is owned by Facebook, who continues to have the highest number of consumers in the 18 to 34 year old age group of any digital service presenting free online video. There are other TikTok competitors, such as Triller who recently raised $200 million and is supported by a number of the major music companies. Triller has reached the top of the App Storein many countries recently. Many TikTok creators have alerted their viewers on TikTok to the possible ban of TikTok in the U.S. and referred their viewers to their other social media outlets, such as Instagram, YouTube, Triller and others.

Because Reel is part of the Instagram app and because of the reach of their parent company, Facebook, it is evident, and already happening, that many consumers are going to download Reel. Between Triller and Instagram Reels, not to mention Lickee, TikTok has plenty of people waiting to step into their shoes, or prepared to compete directly with TikTok.

Tik Tok users are super happy with the content at Tik Tok and presumably will be quite unhappy if the app is banned. When asked to rate their satisfaction with the various digital services consumers use to view video, the viewers of Tik Tok were the most satisfied among the consumers of any of the free digital video services.

I reached out directly to Kevin Mayer, the newly appointed CEO of Tik Tok, and former head of Disney DIS +3.3%’s Direct to Consumer and International groups. Mr. Mayer said in a statement, “Tik Tok lets hundreds of millions of people across the US and around the world experience new ideas and find their voice through short, immersive, expressive videos. It’s truly inspiring to see how our users form communities and connect through this platform, and we are dedicated to continuing to provide a fun and safe experience for them to show their creativity and engage with entertaining content.”

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