President Joe Biden has signed a bill that could potentially ban TikTok, a move that has left some creators and their clients in the creator economy feeling indifferent. The threat of a TikTok ban has become somewhat of a recurring theme over the past few years, with multiple false alarms causing fatigue and skepticism among creators. However, this time it seems different, as the bill made its way through the House and the Senate and was signed into law by President Biden.
Despite the potential ban, many creators and startups in the creator economy are not too concerned. In fact, some see it as an opportunity to diversify and explore other platforms. Eric Wei, co-founder and co-CEO of Karat Financial, a Series B startup that provides financial services to creators, believes that a TikTok ban could actually be beneficial for companies that help creators make money. It gives them the opportunity to frame the situation as a chance for creators to think about diversifying their income streams and explore other options.
The landscape of the creator economy has changed significantly since former President Donald Trump first attempted to ban TikTok in 2020. Creators have had several years of legal battles and two different presidencies to prepare for a world without TikTok. While some creators may be affected by the ban, especially those who rely heavily on TikTok’s livestreaming and monetization features, many have been proactive in building their followings on multiple platforms.
The ban could hit politically-oriented creators the hardest, as Instagram Reels, the closest alternative to TikTok, has been limiting the reach of political content. However, creators who have been preparing for this moment for years are better positioned to weather the storm. They have had time to build audiences and establish themselves on other platforms, mitigating the potential impact of a TikTok ban.
Although TikTok’s power to help creators get discovered sets it apart from other platforms, Instagram Reels and YouTube Shorts have also evolved to provide similar opportunities. TikTok’s Creator Fund, initially a static pool of money distributed among eligible creators, has since transitioned into the Creativity Program, offering a better deal to eligible creators. However, not all creators fit the criteria for this program and rely on other platforms for stable income. YouTube Shorts now shares ad revenue on short-form videos, while Instagram Reels occasionally offers unreliable bonus programs.
Furthermore, the transparency issues and account removals that some creators have experienced on TikTok have led to disillusionment with the platform. Creators are increasingly aware of the risks of putting all their energy into one platform and are diversifying both the platforms they use and their sources of income. This includes generating revenue through fan memberships, product sales, live performances, and courses.
The potential ban on TikTok could create an opportunity for a new short-form video app to enter the market. However, creators are unlikely to invest in a nascent platform that may not last. Instead, they will focus on established platforms like Instagram, YouTube, and Snapchat.
Overall, while the ban on TikTok may have some impact on the creator community, many creators and startups in the creator economy are prepared and have diversified their presence across multiple platforms. They have built their followings and income streams beyond TikTok, mitigating the potential disruption of a ban. Additionally, other platforms like Instagram and YouTube have evolved to provide similar opportunities for creators. The ban may also encourage creators to explore new avenues and think more strategically about their careers in the creator economy.
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