Week in Review - TikTok buys more influence

Saturday, July 25, 2020 • By Lucas Matney

Hey friends, welcome back to Week in Review. Last week, I wrote about the startup competitors chipping away at Google’s G Suite products. This week, I’m diving into TikTok’s early steps to control how their platform develops creatively.

If you're reading this on the TechCrunch site, you can get this in your inbox here, and follow my tweets here.

The Big Story

This week, TikTok evolved the relationship between social media platforms and creators with a new “Creator Fund,” one that is likely going to give the app greater agency in deciding what type of platform it wants to be.

TikTok’s “For You” feed is aggressively algorithmic, which makes the constant flow of high-end “acceptable” content key. While users can just scroll through feeds of accounts they follow, surfing “For You” to discover new content is more central to the platform than similar features are on other social media services. TikTok has been opinionated about the type of stuff it wants to surface, something they’ve repeatedly gotten flack for in the past.

This curation has occurred alongside the company’s faster-than-usual adoption of ads, something other fledgling social media platforms have generally waited a bit to integrate. This is all largely because TikTok is following a time-honored formula that works for short-form content like Instagram Stories posts, just dropping interspersed sponsored content in between unsponsored content as a user swipes.

This week, the company announced that it’s launching a $200 million “Creator Fund” to keep popular TikTokers happy on the platform. Eligible creators must be 18 years or older, meet a certain (unspecified) baseline for followers, and *interestingly* they must also post original content that is in line with TikTok's community guidelines. The company says they’ll start accepting applications soon from U.S.-based creators.

With YouTube, there’s an incredibly strong economic relationship between creators on the platform and the powers-that-be at YouTube. If a high-profile creator screws up, the company can directly demote the quality of advertisers they have access to, directly punishing them. With Instagram, the ad network is a bit more disparate, with a confusing web of sponsorships, so the company is in a somewhat less explicit position to punish popular creators that are behaving badly.

Building out a distinct creator fund will give TikTok more editorial control over the platform’s stars as it scales quickly, ensuring that the company, not influencer marketing agencies, are in charge of how their web of content develops. It may open up the company to more criticism if paid creators later garner controversy while operating on TikTok’s dime, but avoiding the bucketed advertising access programs à la YouTube will probably keep those controversies from spiraling, allowing TikTok to more quietly handle disputes.

Image Credits: Costfoto / Barcroft Media / Getty Images

Trends of the Week

Twitter subscriptions?
Twitter CEO Jack Dorsey indicated this week that the company was eyeing additional sources of revenue beyond advertising, namely paid user subscriptions. Social media companies in the U.S. have been reluctant to embrace paid subscriptions, but Dorsey’s suggestions that Twitter may begin tests of new subscription products for Twitter is big news. Read more about it here.

Musk is rich(er)
With the volatility of 2020 strangely keeping public markets frothy, it’s been another great year for billionaires, though Elon Musk seems to be having a better few months than most. On the back of ridiculous growth in Tesla’s share price, the company hit performance indicators that have allowed Musk eligibility to receive a $2.1 billion stock bonus. Read more about it here.

Fake fans are coming to sporting events
In a distinctly 2020 story, Fox Sports announced this week that it would be livening up TV broadcasts of baseball games with “virtual fans,” aiming to give games a less dystopian feel. Read more here.

Twitter hack was ugly
Last week’s Twitter hack was a rough one, but now the company is getting to understand just how ugly it was. Twitter shared this week that hackers accessed the direct messages of dozens of accounts, including those of an elected official. Read more here.

HBO Max details user haul
The wave of streaming services has been getting more fascinating by the month as the recent slew of entrants Quibi, HBO Max, Apple TV+, Disney+ and Peacock all fight for their slice of consumer spending. HBO Max apparently onboarded 4.1 million subscribers in its first month of availability, a number that seems decent, considering just how confusing their rollout was from a messaging perspective. Read more about it here.

Slack files antitrust complaint
Teams has been a thorn in Slack’s side since Microsoft announced it would be bundled with 365. Well, Slack is really unhappy with the situation it sees as anti-competitive, formally filing an antitrust complaint against Microsoft this week with the EU. Read more here.

Image Credits: Thomas Trutschel / Getty Images

TechCrunch Disrupt

Gaming has always been one of the world's most massive niches, but as game-streaming and esports have drifted to the forefront of mainstream culture, it's clear that there's plenty of room left for the industry to expand. One harbinger of this shift has been the widespread adoption of esports leagues in high schools and colleges across the country, a movement that has pushed online gameplay as just another athletic program schools should be offering.

One of the central catalysts of this change has been Delane Parnell, whose company PlayVS has pushed school districts in the United States to embrace esports, all while courting venture capitalists to shower the startup with tens of millions in funding.

We're amped to announce that Parnell is joining us at TechCrunch Disrupt in September to discuss the future of esports competition and gaming's continued mainstream drift.