How TikTok Rivals Stand to Benefit From U.S. Ban -- WSJ

By Nate Rattner and Peter Santilli

A forced sale or ban of TikTok makes the future uncertain for one of America's favorite apps and opens the door for competitors eager to compete for attention and ad dollars.

President Biden on Wednesday signed a bill that gives TikTok's China-based owner, ByteDance, up to a year to sell the app before it would be banned in the U.S. The measure is part of a sweeping aid package for Israel and Ukraine.

Known for its short-form videos, TikTok has been downloaded more than other major social-media apps in the U.S. each quarter since 2020, according to Apptopia.

TikTok has also emerged as a small but fast-growing player in the advertising space.

The platform recorded $6.6 billion in U.S. digital ad revenue last year, according to estimates from Emarketer. While only 2.4% of the market, that represents 32% growth from the prior year.

TikTok's users are highly engaged, spending more than 90 minutes a day on the platform on average, according to Apptopia. That's more than users of YouTube, Facebook, Instagram or Snapchat.

YouTube and Instagram each offer short-video features in their apps and would likely be the biggest winners of a TikTok ban, said Tom Grant, vice president of research at Apptopia. Americans might also choose to spend some of their freed-up minutes with other types of entertainment such as streaming services, gaming or dating apps.

"If you take TikTok away, it's not like well, I have a budget of time I spend on social," Grant said. "It's more like, this really fun, cool, engaging thing is gone."

Other social platforms including YouTube and Instagram and localized short-video apps Moj and Josh saw user growth in India in the year following that country's banning of TikTok in 2020, according to an analysis by research firm Sensor Tower.

Despite its place as one of the most-used social-media apps in the U.S., TikTok isn't the growth engine it once was. Average monthly active users are down over the past year, data show.

TikTok trails YouTube, Facebook and Instagram in terms of total U.S. monthly users, according to Sensor Tower data as of March.

A third of U.S. adults and 62% of 18- to 29-year-olds say they use TikTok, according to a Pew Research Center survey conducted last year. More than half of Americans use YouTube and Facebook, the survey found.

--Kara Dapena contributed to this article.--

This explanatory article may be periodically updated

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Write to Nate Rattner at nate.rattner@wsj.com and Peter Santilli at peter.santilli@wsj.com

(END) Dow Jones Newswires

April 24, 2024 17:55 ET (21:55 GMT)

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