By Nick Devor
TikTok’s pending ban in the U.S. will leave its 170 million stateside users with hours of time to spend on other apps. Competing social media platforms are eager to get their share, but the attention won’t be spread evenly across the social media landscape.
TikTok is a unique animal — one I’ve become well acquainted with as Barron’s social media editor.
I’m responsible for posting my colleagues’ work to Facebook, Instagram, TikTok, and Snap, so I have plenty of experience with how these platforms work, and the strengths and weaknesses of each.
I’m not sure investors are fully up to speed on those idiosyncrasies. Snap stock, for instance, jumped as much as 7% Friday following a Supreme Court hearing that left traders thinking that justices wouldn’t stop the ban. In fact, for months, Snap has been cited as a major beneficiary of a TikTok ban. I can tell you, it won’t be.
Suggesting that TikTok’s loss will be Snap’s gain is like saying banning television sets will boost sales of smart refrigerators with touchscreens on the door. It’s true you can watch movies and TV on both — but who wants to catch up on their shows while standing in the kitchen?
(Snap and Barron’s publisher Dow Jones have a partnership to post regularly on Snapchat.)
When TikTok landed in U.S. app stores in 2018, it quickly became the most downloaded app in the country. Two years later it was the most popular app in the world, disrupting the social media landscape and forcing the established titans to pivot. Each app now has its own infinite-scroll short-form-vertical-video: Meta Platforms’ Instagram and Facebook call it Reels; Alphabet’s YouTube has Shorts; and Snap has Spotlights.
In the world of TikTok clones, Snap’s Spotlights are a distant No. 4. It has some 500 million users versus roughly 2 billion for YouTube Shorts and TikTok itself. Meanwhile, on Instagram, its 2 billion users spend roughly 50% of their time watching Reels.
Their advantage over Snap comes down to fundamental differences in the way users interact with each platform.
When I first downloaded Instagram in 2012 and Snap in 2014, they were still social networking apps. The content I saw was from people I chose to follow or add as a friend. TikTok’s innovation was bypassing the need for connections and letting its content-recommendation algorithm do the work. Suddenly, we were getting the most addictive videos across the internet, not just the ones made by our friends.
Fast forward to today and platforms like Instagram and YouTube have followed in TikTok’s footsteps by prioritizing algorithmic recommendations and cloning TikTok’s vertical-video format. For YouTube, which is the original viral video website, and Instagram, which has always been about sharing photos and videos, it was a natural pivot.
Snap is a different story. While the company may have dropped “chat” from its corporate name, chatting among friends is still the app’s primary function — even with Spotlights.
That’s not going to satiate someone going through TikTok withdrawal in the event of a ban. Instagram and YouTube, on the other hand, can provide a nearly identical experience to TikTok.
While some TikTok users complain that Reels and Shorts don’t surface interesting (read: addicting) content, that’s likely to change. The platforms will benefit from increased posting and scrolling; social media algorithms need data and input to improve. No one should doubt Meta or Alphabet’s ability to deliver viral content.
Shorts are already a money-maker for YouTube. Ever since the platform allowed users to sell ads against their Shorts in early 2023, “the total creator earnings generated from Shorts have increased every month,” Google Chief Business Officer Philipp Schindler said in a recent Alphabet earnings call. “When creators succeed, we succeed,” he added.
Meta’s Instagram has integrated e-commerce software allowing users to buy products from big and small business accounts without ever leaving the app. That’s similar to the TikTok Shop, which hit a record $100 million in single-day sales this past Black Friday. Instagram is well positioned to pick up the vendors and customers TikTok could leave behind.
The law banning TikTok goes into effect on Jan. 19, unless the platform wins its bid for the Supreme Court to overturn the ban. Until then you can find our account at @barrons on TikTok — or wherever else you get your vertical-video fix.
Write to nicholas.devor@barrons.com