Will TikTok’s ban impact creator economy startups?Not so, say the founders.

Image credits: Bryce Durbin/TechCrunch

President Joe Biden signed a bill on Wednesday that will now effectively ban TikTok. There have been so many false starts and stops that some creator economy founders and their clients are rolling their eyes. They’ve been through something like this before.

“Two years ago, this would have been devastating,” Eric Wei, co-founder and co-CEO of Karat Financial, told TechCrunch. “Now…what?”

When creators succeed, startups operating in the creator economy usually succeed as well. Still, Wei isn’t particularly concerned that the friction from TikTok’s ban will affect his business, a Series B startup that provides financial services to creators.

“If your startup develops a product that helps creators make money, this is actually good for you from an addressable market standpoint,” Wei said. “Your framework might be something like, ‘TikTok is gone. As creators, we need to think about diversification and how to support ourselves. So here’s XYZ thing you can do.’ not.”

The threat of a TikTok ban feels similar to “Boy Who Were Werewolf,” but this time it’s different. This is not just political theater in the form of ongoing Senate hearings. The bill, which would force ByteDance to sell TikTok if it doesn’t find a U.S. buyer within nine months, passed the House and Senate and went to Biden’s desk, where he signed it into law. did.

But the landscape for creators appears to be different than it was in 2020, when former President Donald Trump tried to ban Chinese-owned apps (and now that Trump is running for president again, has said it is opposed to the ban because it would affect (larger powers). The prominent creators have gone through nearly three years of legal back-and-forth and two different presidencies to prepare their businesses for a world without TikTok.

As Wei scrolled through the large group chat he was part of with other creators, he noticed that no one seemed too panicked.

“As I was looking through it, there were a few jokes. One guy joked, ‘My Snapchat stock is going to explode,’ and another guy joked, ‘Let’s make a skit. TikTokers protest TikTok ban. When we do that, who’s going to participate?’” he said. . “A third person said, ‘TikTok is going to sue, they’re talking to insiders,’ and a fourth person said, ‘Where’s my popcorn?'”

This doesn’t apply to all types of creators. Platforms like YouTube Shorts and Instagram Reels are not as invested in these features as TikTok, so TikTok live streamers and creators who make money through their TikTok Shops could be hit the hardest, Wei said. He points out. The ban could also be detrimental to politically oriented creators, as Instagram Reels is not a viable alternative for them and Meta-owned platforms have begun to limit the reach of political content. And while creators with established Way group chats have been preparing for this for years, the move away from TikTok could be a huge blow to new creators who don’t yet have a following on multiple platforms. There is.

“Let me be clear: no one is saying, ‘This is good for us!'” Wei said. “But thanks to the time the creators had to prepare for this moment, And now we’re ready to weather the storm.

Harry Gestetner, co-founder and CEO of creator monetization platform Fanfix, told TechCrunch. “Secondly, this is not an overnight ban. We still have about a year before creators transfer their followers, so I’m optimistic.”

James Jones, CEO of Bump, another financial services company for creators, sees this situation in parallel.

“There’s no doubt that there will be a ripple effect on the creator community as a result of the TikTok ban,” Jones told TechCrunch. “But creators are getting better at diversifying the ways they monetize across multiple platforms. We’ve seen this movie before with Vine as well, and the void left by TikTok. It paved the way for filling the gap.”

TikTok’s secret sauce is its power to help creators get discovered. More than any other platform, anyone can have a blast on the For You page. But while Instagram Reels and YouTube Shorts may be likened to a “Kirkland-branded TikTok” in 2021, the platforms have matured since then.

TikTok’s original Creator Fund was a static pool of money distributed to a growing number of eligible creators, few of whom supported themselves solely through TikTok views. This only recently changed as TikTok moved creators into its creativity program. The program offers more favorable terms to eligible creators, but not all creators create videos that are worth the program’s bill. Therefore, if you want to make content creation a stable career, you should move to other platforms anyway. YouTube Shorts has started to share ad revenue with short-form videos, similar to its long-standing partner program, but Instagram Reels only has occasional and unreliable bonus programs.

Gestetner told TechCrunch that some of the creators he works with are disillusioned with TikTok.

“The problem with TikTok is not just the ban,” he says. “Creators too often get their accounts deleted, shadowbanned, and reported on TikTok, and it’s very difficult to get a response from TikTok. We have addressed the issues there.”

It’s not like other platforms don’t share these transparency issues. But these risks make it important for creators not to put all their energy into one platform.

“Five years ago, creators generally used one platform,” he said. “Today, every creator uses at least three platforms, and at most he uses five, six, or seven platforms.”

This need for diversification extends beyond the platforms used by creators. Creators also need to earn income from a variety of sources, including fan memberships, merchandise sales, live performances, and courses.

“I think there will be no impact on our business, or there could be some positive impact,” Gestetner said. “This helps our case because creators are all skeptical of big platforms and don’t want all of their monetization tied to a particular platform.”

In theory, a ban on TikTok could make room in the market for another short-form video app, perhaps one not owned by a large company like Meta or Google. But it probably won’t spark a new situation like when Elon Musk bought Twitter and several microblogging apps sprung up overnight.

“I think a very good example of this is something like this: Remember Triller?” Wei said. “For a while, we were all excited like, ‘Oh my god, TikTok is going away, let’s put our money on Triller!'” But then everyone realized that TikTok was going away. I realized that it’s not going away. After all these years, does anyone talk about Triller anymore? ”

Well, they might not even be talking about Triller. Because the company is raising red flags. Either way, creators don’t have the patience to invest in nascent platforms that may not last, so they have to make do with Instagram, YouTube, and Snapchat. However, that doesn’t mean TikTok won’t be missed.

“I think the biggest impact overall is the fans,” Gestetner said. “But I think the short experience and reel experience has gotten a lot better.”