The content of this report was first published in our In Focus: Bytedance Bi-weekly Newsletter for all our TechNode Squared members as part of the exclusive membership benefits. We will continue to develop specialized vertical newsletter as we go so be sure to subscribe to our membership program and be the first to obtain insightful analysis as such. By becoming our member, you will also get to add your voice to the first tech journalism network in China and be immersed with everything tech in China. Visit https://technode.com/become-a-member/ to learn more!
JUNE
2019
THE
BYTEDANCE
REPORT
P R E S E N T E D B Y
Bailey Hu and Tony Xu, tech reporters
Alberto Sperindio, Newsletter Editor
INDEX
MEET THE TEAM
2
Background
OVERVIEW
CORPORATE
ECOSYSTEM
APP
OUTLINE
PROBLEMS
DEPTH: INDIA
IN
IS BYTEDANCE SUING?
WHO
3
6
23
26
28
29
The content of this report was first
published in our In Focus: Bytedance
Bi-weekly Newsletter for all our
TechNode Squared members as part
of the exclusive membership benefits.
We will continue to develop specialized
vertical newsletter as we go so be sure
to subscribe to our membership
program and be the first to obtain
insightful analysis as such.
PRIVACY
32
By becoming our member, you will also
get to add your voice to the first tech
journalism network in China and be
immersed with everything tech in
China. Scan the QR code above to
learn more!
VIDEO STARS
31
1
HU
BAILEY
Reporter
Tech
XU
TONY
Reporter
Tech
SPERINDIO
ALBERTO
Editor
Newsletter
MEET
THE
TEAM
Bytedance is the most valuable
startup in the world. Reportedly
worth $75 billion, the company is
moving rapidly to take its place—if it
hasn’t already—among China’s tech
establishment.
But it remains relatively mysterious.
Founder Zhang Yiming gives media
interviews only rarely and while
Bytedance’s flagship news
aggregator Jinri Toutiao has been
around since 2012, the success of
offerings like TikTok (Douyin in China)
is much newer.
To shed some light on this recently
minted and extremely trending tech
titan, we have designed the world's
first Bytedance-focused newsletter.
2
poach; they’re paid more than the industry average in
CORPORATE
OVERVIEW
On April 4, The Information compiled a series of
statistics on Bytedance’s 40,000-strong workforce
and company structure.
In 2018, it turns out, the company’s headcount
doubled to exceed that of Facebook. In addition,
Bytedance employees are reportedly difficult to
China, one Didi executive told The Information.
Ad sales and content monitoring staff each make up a
quarter of Bytedance's workforce.
3
Liu Jiehao, an analyst at research group iMedia, told
TechNode that Bytedance’s massive workforce makes sense
given its current priorities. “The pursuit of revenue and
valuation will be greater than the pursuit of profit” as the
company gears up for a much-anticipated IPO," Liu said.
As a result, while other Chinese internet tech enterprises face
layoffs and restructuring, Bytedance is still seeing “rapid
growth.”
Liu points out that while Bytedance now employs more
people than Facebook, average productivity still lags well
behind the US titan. Despite a troubled year, Facebook pulled
in $55 billion in earnings in 2018 while Bytedance barely
made its roughly $7.4 billion revenue goal, Bloomberg
reported.
Tencent, which employed 54,000 people as of last December,
fell between the two in terms of 2018 revenue (measured in
billions of dollars).
4
“When Bytedance’s growth enters the mature stage, it
needs to pay more attention to input-output ratio and
generation of actual profit,” Liu said.
But retaining thousands of content-monitoring personnel,
at least for the time being, may be a necessity. “Artificial
intelligence technology can reduce pressure for
monitoring to a certain extent,” Liu said, but humans are
still needed to check for vulgar and potentially harmful
content across Bytedance’s still-growing ecosystem of
apps.
5
APP
ECOSYSTEM:
FaceU
A look at Bytedance’s
lesser-known apps
Duoshan
Beside the most known apps, the
Bytedance’s app ecosystem counts a
good amount of lesser-known
Tomato Novel
glance may not be directly linked to
it.
services and applications that a first
Lark/Feishu
6
Content: Selfies, photo-editing
#11 in Photo & Video/Free
Ranking:
Store, May 7)
(App
Released: September 2014
FaceU
Type: Free (in-app purchases)
Similar to: Meitu, MakeupPlus
(MAU as of December 2018, in thousands. (Image credit: QuestMobile, Infogram)
FaceU, acquired by Bytedance-owned Toutiao in February 2018, is the most popular of the
company’s three photo-editing apps.
If you didn’t already know that Bytedance had multiple photo-editing apps, you could be
excused; after all, their combined footprint—89 million monthly active users (MAU)* in December
2018, assuming each user is unique—was only 15% of the company’s estimated total MAU,
according to QuestMobile.
By contrast, Toutiao alone had 240 million MAU, while Douyin had 426 million MAU the same
month.
*All figures for app users in China only.
7
Before being snapped up by Toutiao, FaceU had completed three rounds of funding, closing a
Series C in October 2017 worth $50 million, according to Crunchbase.
Based on stats from app intelligence firm Qimai, FaceU has generally remained in the top 10 of
the Apple App Store’s free “Photo & Video” category since early 2016. Since being acquired by
Bytedance, it has mostly retained that status, although its ranking in the overall free app category
has seen more volatility.
FaceU is currently linked to Bytedance’s relatively new video-social app Duoshan, which
launched in January 2019. The interfaces are similar (see below), and Duoshan users can directly
log into FaceU using their accounts, as well as send pictures to Duoshan contacts. However, the
reverse is not true. Photo- or video-snappers on Duoshan aren’t directed to FaceU’s enhancement
interface—potentially a lost opportunity for user acquisition.
Left: Upon startup, FaceU users are prompted to log in using Duoshan.
The interfaces of FaceU (center) and Duoshan (right) also look similar.
(Image credit: TechNode/Bailey Hu)
8
Type: Free
Content: Social, short videos
#15 in Social/Free (App Store,
Ranking:
7) May
Released: January 2019
DuoShan
Similar to: WeChat, Snapchat
Douyin (left) and Duoshan (right). (Image credit: Douyin, Duoshan)
You may remember Duoshan from a post-launch surge in media coverage which spun it as a potential
“WeChat-killer,” a claim that TechNode editor-in-chief John Artman doesn’t buy. The app, whose name
can be literally translated as “very shiny,” combines a private messaging function with Douyin’s
trademark short-video format.
9
Since then, however, the hype has died down to a dull roar, as Baidu’s search index shows.
Over the last two months, in fact, search volume for FaceU’s Chinese name exceeds that for
Duoshan.
Searches for Duoshan (blue) and FaceU (green) in 2019 to date, followed by search volume in
April and May. (Image credit: Baidu)
10
FaceU has also had relatively more downloads in the last few months compared with
Duoshan, according to Qimai. Although the photo-enhancement application may be seen as
an attempt to support Duoshan, it’s evident that FaceU has a more stable following.
Estimated downloads of FaceU (top) and Duoshan (bottom) since Jan. 21, when Duoshan
launched. (Image credit: Qimai)
11
Finally, although Duoshan’s rankings are still relatively high in the free social app
category in Apple’s App Store, in recent months it has dropped to the #10-20 range
after consistently ranking in the top five from February through early March.
It seems that WeChat needn’t check its rearview mirror just yet, although Tencent’s
social titan is making moves towards more short-video content.
Since its launch, Duoshan’s overall ranking in the free app category has steadily declined. (Image credit: Qimai)
12
#2 in Books/Free (App Store,
Rankings:
7) May
Released: January 2019
Tomato
Type: Free (ads)
Novel
Content: Books
Similar to: WeChat Read, Midu
Tomato Novel is not among the 13 apps listed on Bytedance’s official website. Its cluttered
user interface isn’t nearly as polished as that of Douyin or Duoshan.
In the categories tab, a sharp divide exists between genres targeted toward men (“gaming novels,”
“science fiction”) and women (“modern romance”). (Image credit: Tomato Novel)
13
Nevertheless, in March, Chinese media outlet Jiemian linked Tomato Novel back to
Bytedance, sparking speculation about the new reading app.
Jiemian noted a marked resemblance to Midu, a product launched by Toutiao
competitor Qutoutiao. Tomato Novel's logo also looks similar to that of WeChat Read,
Tencent’s reading app from 2015.
Unlike WeChat Read, however, which promises an ad-free experience and a limited
amount of free content, Tomato Novel appears to actually be paying users to stay inapp.
The icon at the center of the bottom navigation bar is literally labeled “Benefits.”
Users who click in are offered monetary rewards for accomplishing tasks, such as
reading for five, 30, or 60 minutes a day.
The app’s homepage (left) offers different categories of recommended content. Users receive cash
gifts and rewards for performing different app-related activities (center), and can opt to watch a video
for 30 minutes of ad-free reading (right).
14
All content is free, although image and video ads are liberally scattered throughout
the books, disrupting the reading experience. For that reason, as we previously
reported, Tomato Novel has received a fair number of negative reviews from users.
Readers have also complained about low-quality content.
However, no doubt thanks largely to its compensation scheme, Tomato Novel has
remained ranked among the top five free apps in the Books category in Apple’s App
Store since March, according to Qimai. As of May 7, its average rating across Apple and
Android stores was a solid 3.6 out of 5 stars.
Since late March,Tomato Novel has consistently ranked highly in the App Store’s Books category for
free apps. (Image credit: Qimai)
15
Type: Free
#170 in Business, Apple App
Ranking:
(May 21)
Store
Released: Jul. 2018
Lark/
Feishu
Content: Work/productivity
Feishu and its international version Lark were originally created as a productivity platform for
Bytedance employees. Last July, the company debuted the app on the ic and Android stores.
However, it’s still not completely public; while anyone can download either version, work
teams must apply to use the app. Lark’s functions also overlap with a few major platforms on
the Chinese market.
Competitor: DingTalk
Among free productivity apps, Feishu’s biggest competitor is Alibaba’s DingTalk. The
platform does occasionally garner complaints from employee-users but its reach is
undeniable. According to the official website, 7 million enterprises use DingTalk.
Last year, DingTalk reported that it had more than 400 million individual users. The platform consistently
ranks at the top of the “free” category of the Apple China App Store’s business category.
16
Feishu’s layout for basic work group chats, as well as the organization and nature of its
features, resemble those of DingTalk—with a few exceptions.
Rankings in the Apple App Store’s “Business” category as of May 21 (Image credit: Qimai)
Feishu’s layout for basic work group chats, as well as the organization and nature of its
features, resemble those of DingTalk—with a few exceptions.
Feishu (left) and DingTalk (right)
are similar in appearance. Feishu
has a few additional features,
including an option to poll
coworkers in chats and to create
group-wide multimedia
“announcements.”
17
However, it lacks one of DingTalk’s most useful and also most controversial features
—an option to track employees’ GPS locations in order to keep them accountable.
In fact, DingTalk offers enterprises an entire suite of built-in optional services, from
online reimbursement to in-app business trip booking. For now at least, Lark only
has the option for enterprises to build their own apps—with sample features
including a punch in/out button, a “bug tracker” for collaborative projects, and job
application submission forms.
Lark offers a sample image of an app that individual businesses can choose to integrate into their platform.
(Image credit: Lark)
18
Competitor: WeChat Work
While relatively high-ranking in the Apple China App Store’s “Business” category,
WeChat Work hasn’t achieved DingTalk’s scale. Earlier this month, Tencent said the
three-year-old app had 1.5 million companies registered in its ecosystem, compared to
Alibaba’s self-reported 7 million.
It does offer options for employees to apply for business trips and reimbursement,
similar to DingTalk. When clicking into tabs such as “approval,” the resulting interface
loads as a mini-program, with a slight lag time.
WeChat Work’s main advantage is its connection to its more social counterpart. Upon
download, users are given the option to log in using WeChat accounts and to
automatically connect with existing friends. They can also link an enterprise account to
WeChat, using the work application to chat directly across apps.
The app’s overall design remains somewhat clunky, however, and it’s missing some of
the functionality of DingTalk. Perhaps for that reason, its ratings across Apple and
Android app stores (3.7) are close to a full point lower than those of both DingTalk (4.5)
and Feishu (4.5), according to Qimai.
In order to apply for
reimbursement, users
must enter a miniprogram
interface to
find an online form.
(Image credit:
WeChat Work)
19
Competitor: Google Docs/Shimo
An introduction to Lark’s version of Docs. (Image credit: Lark)
One of Lark and Feishu’s more interesting features is a collaborative document platform
that seems specifically tailored for tech enterprises. The interface appears to be a blend of
Google Docs, WordPress, and popular Chinese doc-sharing platform Shimo.
It’s an interesting alternative to both DingTalk and Enterprise WeChat, which offer users
cloud storage space to share documents. Rather than creating files separately and
uploading them to be shared, Lark users can choose to collaborate directly on documents,
spreadsheets, and even coding blocks.
20
Additional features of Feishu’s answer to Google Docs (Image credit: Lark)
Not only does that intersect with the coverage of Shimo and Tencent Docs—a Google Docs
lookalike launched last April—but it also creates a potential rivalry with GitHub, which is
massively popular in China and currently partnering with Ping’an Cloud on enterprise
services.
Other features
On the international version Lark, hints of cross-platform partnerships are evident. In the
“Announcements” section of group chats, users can embed YouTube and TikTok videos as
well as files from productivity platform AirTable. They can also add bots from Slack-like site
Trello into group chats, although this feature has no discernable functionality yet.
The integration of features from popular Western platforms could presage partnerships—
and potentially big plans—for Bytedance’s first workplace app.
21
New products
TechNode: “Released via a Singapore-headquartered subsidiary, Lark Technologies is an
online collaborative platform that combines three functions: calendar, documents, and
chat.”
Lark has been Bytedance’s internal communication and collaboration platform since
November 2018. Its launch marks a push for a larger share of the Slack-dominated
productivity market. Although features such as slideshows and video conferencing aren’t
yet available, Bytedance will reportedly increase the app’s team size to 1,000 by the end
of 2019. In addition, Bytedance acquired cloud-based productivity tool Mubu in 2018, 36Kr
reported a few days before Lark’s launch.
Jiemian: Bytedance has released the reading app “Fanqie Xiaoshuo,” or “Tomato Novel,”
which offers a wide array of free online novels but shows an ad every three pages or so.
The app has received bad reviews for frequent ads and low-quality content, but still ranks
third among the free reading offerings on Apple’s China App Store as of April 9, beating
Tencent’s WeChat Read
Finally, Bytedance plans to launch a K-12 online education platform by summer 2019,
36Kr reported. The new platform could put to use its experience from two existing, notso-successful
Bytedance education products (aiKID and Gogokid) to become a major
player.
It’s also good at picking winners
Bytedance’s hits aren’t due just to a user-friendly approach. Last year, the company
snapped up American short video app Musical.ly—with its 100 million monthly active
users—and combined it with TikTok to solidify its standing in Western markets.
CNN: “Musical.ly shot to popularity after its 2014 launch. Its predominantly young user
base was drawn to the way the app allowed them to post short clips of themselves lipsyncing
to popular songs.”
22
OUTLINE:
BYTEDANCE
BET BIG ON AI
FORBES: BYTEDANCE’S “SUCCESS CAN BE ATTRIBUTED
IN LARGE PART TO THE ARTIFICIAL INTELLIGENCE AND
MACHINE LEARNING ALGORITHMS THAT DELIVER
CUSTOMIZED CONTENT FEEDS TO ITS USERS.”
Rather than creating content, Bytedance focuses
on curating it. It has invested heavily in AI
technology in order to keep a lead over
competitors.
Forbes: Bytedance’s “success can be attributed in
large part to the artificial intelligence and
machine learning algorithms that deliver
customized content feeds to its users.”
Synced: Last August “US chipmaker Intel and
Chinese tech pioneer Bytedance announced they
will collaborate on setting up an AI research lab,
talent training, and development of AI
applications.”
23
BYTEDANCE
BY THE NUMBERS
01
Exponential growth
Since its first valuation at $10 million in
July 2012, Bytedance's value has soared.
The last few years—marked by
Douyin/TikTok's launch (2016) and the
acquisition of Musical.ly (2017)—have seen
particularly rapid growth. Two rounds of
Series D in 2017 nearly doubled the
company's valuation.
02
Fighting for attention
Bytedance's first hit was news app Jinri
Toutiao. Here's how it compares to similar
offerings in China's mobile market, based on
monthly active user (MAU) count in
December 2018. (Do-it-all app WeChat, in
comparison, reached over 1 billion MAU.)
24
03
Short video offering
In addition to its hit Douyin, Bytedance
has also spun off Xigua Video and Vigo
Video, whose small-town users overlap
more with Toutiao's audience. In terms
of MAU in December 2018, here's how
they measured up to each other as
well as competitor Kuaishou. Together,
the four apps dominate the short
video sphere in China.
TikTok around the world
04
The top 10 countries where TikTok, the
international version of Douyin, was
downloaded last year are spread out
geographically. India led with 119.3
million downloads, while no other
country surpassed 40 million.
Bytedance also had big losses
The Information: “Last year, after the costly launch of its video app TikTok outside of
China, the company lost $1.2 billion.”
As with its user engagement figures, TikTok’s retention rate has not been stunning.
With user time already occupied by apps with longer histories and high rates of
engagement, TikTok will find it trickier to retain users in overseas markets the way
Douyin did in China. Losses could further expand in 2019 as Bytedance steps up
marketing efforts for TikTok and other apps targeting overseas markets.
05
25
PROBLEMS
Legal disputes
Bytedance has been involved in several lawsuits since its inception, mainly in China but,
recently, facing troubles globally also. While they may have an impact on their reputation,
Bytedance has been able to cope with them every time they rose.
Ongoing legal disputes
TechNode: “Tianjin Binhai New Area People’s Court issued a ruling on Wednesday to stop
Bytedance from using user information taken from WeChat and QQ on two of its apps.”
Bytedance and Tencent engaged in some acrimonious exchanges on Mar. 24, taking turns
calling each other's claims “nonsense.” After the ruling came out, Bytedance said it respected
the ruling but had requested a review. Meanwhile, Tencent seems to have made progress in
efforts to curb—if not stifle—the growth of Douyin and chat app Duoshan. Prior to this case,
Tencent had banned links from Douyin and Duoshan on WeChat and stopped users from
registering accounts for Bytedance apps using WeChat.
Another court ruling on a similar issue was made on Mar. 12, this time in favor of an individual
plaintiff. However, Bytedance said that it had not been notified of the ruling and only learned
about it in news reports.
Techweb (our translation): “If the report from Yicai [the media outlet that broke the news] is
real, then the court didn’t follow the basic legal procedures and jumped to the ruling.
Normally, courts aren’t so rash,” said Li Liang, vice president of Bytedance.
BiaNews: On March 27, in a Jinri Toutiao post, Bytedance vice president Li Liang shared a
screenshot of a court ruling that orders Baidu to apologize and compensate Li for at least one
slanderous online article.
Li’s case could help Bytedance gain an upper hand in future disputes. Baidu, however, doesn’t
seem to be complying. The search giant was ordered to apologize to Li in a “conspicuously”
placed online announcement within 10 days of the ruling, but so far TechNode has found no
such posts.
Bloomberg: “The three biggest record labels are demanding more money for songs played on
TikTok and its Chinese counterpart Douyin, setting up a showdown with the hugely popular
video apps, people with knowledge of the matter said.”
Seeing the potential of the two apps, Universal Music, Sony Music, and Warner Music are
asking for a larger share of the pie. As Douyin and TikTok are highly dependent on music,
Bytedance is unlikely to accept the demands in full. In addition, TikTok still lags far behind its
Chinese counterpart in terms of profitability.
26
WHO IS BYTEDANCE SUING?
The $5.7 million settlement is TikTok’s highest fine yet
—and perhaps the biggest push yet to comply with
regulations. Children under 13 will be restricted to an
ecosystem where they can only watch video content
specifically curated for their age group.
While the update is certainly an improvement, it
seems to only resolve a legal dispute rather than the
core issue. Young users can easily bypass the
restrictions by entering false birth dates.
Who Bytedance is suing
According to media reports, Bytedance and Tencent
have a storied rivalry. That's reflected in the more than
70 lawsuits that Beijing Bytedance Technology has
filed from 2015 to 2019: Tencent has featured in 27% of
cases brought against companies.
TechNode: “Tech giants Baidu and Bytedance on
Friday filed lawsuits against each other for unfair
competition, with both companies seeking RMB 90
million (around $13 million) in damages and extended
public apologies.”
Baidu claimed that Bytedance stole the results from
their search engine for use in news aggregator Toutiao,
and Bytedance accused Baidu of directly using
popular videos from Douyin in a product named
“Simple Search.” Although the two companies have
been exchanging lawsuits for some time, their
previous demands have never reached this scale. As
the rivalry between the two companies becomes more
direct due to overlapping features in their products,
Baidu and Bytedance could see increased legal
disputes in the future.
The Verge: “TikTok will no longer allow children under
13 to upload videos, leave comments, build a profile, or
send messages, after a settlement with the Federal
Trade Commission today required the company to
come into compliance with a federal children’s privacy
law.”
CNET: "We know that a significant amount of children
are being contacted via popular live-streaming apps,
such as TikTok, by abusers who are using them as a
hunting ground,” said a spokesperson for the National
Society for the Prevention of Cruelty to Children
(NSPCC) in late February.
More recently, in China Douyin attempted to address
similar problems with a new “youth mode.”
On Mar. 4, EEO reports (in Chinese), Douyin launched a
new version with a “youth mode” that limits underage
users to viewing educational content such as videos on
painting and photography. The mode, which can be
turned on and off by parents, also blocks the default
search feature and cash gift function for content
producers.
Just as with TikTok, however, there’s no way of making
the mode mandatory.
BBC: “Video-sharing app TikTok is failing to suspend
the accounts of people sending sexual messages to
teenagers and children, a BBC investigation has
found.”
Online predators have been a longstanding issue for
TikTok, and Bytedance has repeatedly pledged to
address it. The app, however, still lacks mandatory
verification methods to prevent young children from
using it. That’s true even in the US, where the app
significantly restricted the access of users under the
age of 13 after reaching a $5.7 million settlement deal
with the Federal Trade Commission.
In light of the lingering predatory behaviors on TikTok
alone, Bytedance’s 10,000 content monitors may still
not be enough.
27
IN DEPTH
IN INDIA
How Bytedance pursued localization
to a fault
Following in the footsteps of
smartphone brands like Xiaomi and
Oppo, Chinese apps saw surging
adoption rates in India last year. In
2018, according to a report by
Sensor Tower, 44 of the country’s
top 100 Android apps were Chinese.
That places it on par with Indian news app
ShareChat, which launched in 2015 and has in
fact sued Helo for copying its interface.
ShareChat’s investors include both Xiaomi and
Beijing VC firm Shunwei Capital, which led a $99
million Series C for the startup in September.
According to data from Sensor Tower, here’s how
downloads of Helo, ShareChat, and smaller
competitor Dailyhunt (of which Bytedance’s
Toutiao is a minority stakeholder) on Google Play
compared in March.
Among those, Bytedance’s short-video apps
TikTok and local-language news curation
platform Helo were standouts. In addition, the
company has launched another short-video app
in India: Vigo Video.
The company supports “lite” versions of all of the
above in India, reflecting the demand for lowbandwidth
editions of apps in emerging
markets.
Helo in particular shows Bytedance’s attempts to
localize in India. Launched in June 2018 to cater
to the country’s large local-language user base,
which outnumbers its English-language
audience, the app is available in 14 languages.
28
WHO IS BYTEDANCE SUING?
Downloads do not necessarily reflect ongoing
use of the app; in December, ShareChat
reported 40 million monthly active users
compared to Helo’s 25 million. However, it
seems clear that Helo is ahead in the race to
acquire new users, not least because of
significant spending on promotion.
While falling far short of its Chinese version,
Douyin, in terms of overall adoption, TikTok’s rate
of growth in India (60%) surpassed even Douyin’s
spurt of popularity in the last months of 2018
(25%).
DAU growth for Douyin and TikTok (millions)
That could be a cause of concern for authorities.
Last November, a Hindustan Times report
pointed out prominent and potentially
inflammatory fake news reports on both Helo
and ShareChat.
As hundreds of millions of Indians proceed to
cast their votes for the 2019 general elections,
Facebook has already come under scrutiny for
not doing enough to stop false reports and hate
speech, in part because its moderation system
targets mainly English content. In 2018,
according to the tracker of the Indian nonprofit
Software Law and Freedom Center, the country
saw 134 internet shutdowns, some of which
included temporary regional bans on Facebook
and other online services. Many were imposed
in order to “curb violence and unrest in conflictridden
areas,” according to official explanations.
While Helo seeks to gain users and edge out
competitors like ShareChat, it’s unclear whether
the company is spending equal effort on
monitoring its multilingual content.
That leads us back to TikTok, whose fate is
currently being considered in court (see below
for details).
In addition to harboring potential problems,
TikTok’s rapidly growing profile makes it a prime
target for a crackdown. As of the end of last year,
it reported 20 million daily active users (DAU),
significant growth from October, when the
company claimed 12.5 million daily active users.
29
Legal dispute in India
Reuters: “An Indian court’s call for a ban on the popular
video app TikTok will hurt free speech rights, China’s
Bytedance Technology Co has said in a request for the
Supreme Court to quash the directive. ”
This is the first time that Bytedance’s legal strategy in
India has been revealed. The company was already
under fire for spreading harmful content on TikTok, but
in recent months judicial action has intensified.
Bytedance’s request was later rejected, indicating that
the country is not likely to give a pass to Bytedance’s
inadequate content filters.
TechNode: “‘At TikTok, we have faith in the Indian
Judicial system and the stipulations afforded to social
media platforms by the Information Technology
(Intermediaries Guidelines) Rules, 2011,’ the company
said in a statement issued to TechNode.”
As legal efforts to ban TikTok gained momentum,
Bytedance made some gestures of goodwill, stating
that it removed 6 million noncompliant videos. But this
gesture might not be enough for Indian regulators,
who seem to have lost confidence in the app
maintaining a healthy content ecosystem.
TechNode: TikTok was removed from Google Play and
Apple’s App Store hours after an Indian state court
rejected Bytedance’s request to stay a ban on the app.
With Android and iOS devices comprising around 80%
of market share in India, the takedown could severely
impact TikTok’s performance in its largest market.
Android users can get around the restriction by simply
downloading installation files from other sources, but
the extra step required could significantly slow user
acquisition.
Reuters: “India’s ban on popular Chinese video app
TikTok is resulting in ‘financial losses’ of up to $500,000
a day for its developer, Beijing Bytedance Technology
Co, and has put more than 250 jobs at risk, the
company said in a court filing seen by Reuters. ”
Good and bad news
SCMP: “An Indian state court on Wednesday moved to
lift a ban on popular video app TikTok in the country,
two lawyers involved in the case said, in a boost for its
developer Beijing Bytedance Technology Co.”
While it suffered losses of up to $500,000 a day during
the ban, Bytedance convinced the court to reverse its
decision to remove its viral short video app from Apple
and Google’s app stores just two weeks after it went
into effect. While TikTok did not immediately return to
the two app stores, the state court’s decision has put
an end—or, at least, a pause—to legal efforts to ban the
app, which had been gaining momentum in the past
few months.
TechNode: TikTok became available on Apple’s App
Store and Google Play after a two-week ban, which
cost the company 15 million first-time users in India.
TikTok came back with a vengeance, surging back to
the top of Google Play’s free app charts just a week
after its reinstatement. The app has been encouraging
users to spread the word of its return, offering cash
prizes of $1,445 to three users per day for half a month.
While TikTok still needs to comply with the Indian state
court’s decision to implement stricter content filters,
its return to the Indian market—where it has 120
million users—is undoubtedly good news for the
company.
Business Standard: Social media platform Helo has
removed about 160,000 accounts and 5 million posts
from its platform over the last 10 months which were in
violation of the app’s community guidelines.
Helo, Bytedance’s local-language news app in India,
has been under fire since late last year for spreading
pornographic content and encouraging predatory
behavior. Bytedance’s decision to make content on
Helo more compliant could be an effort to prevent
legal disputes similar to those involving TikTok.
30
To access Xingtu, however, Liu had to agree to not
publish any of his Douyin content on other platforms.
“With Douyin and other apps, the difference is that on
Douyin the content can grow viewers more quickly.
There is more content and categories of content. To
put it another way, there are more users …”
Video stars:
Getting deep with a Douyin celebrity
Douyin influencers Liu Qikun, left, and Liu Yicun (no
relation), pictured here in March, are known online as
Uncle Beibei and Dao Muxiong. Together, they film
short comedy videos in Beijing. (Image credit:
TechNode/Cassidy McDonald)
“About half a year after I encountered Douyin, I quit my
banking job and came to Beijing to make short
videos.”
In 2018 Liu Qikun left Hulun Buir, Inner Mongolia to
pursue a career as a Douyin star.
Like many short-video celebrities, Liu participates in
the app’s video challenges to gain followers. In his first
hit, he lip-synced Keith Ape’s “It G Ma.” After reaching 1
million fans, Liu began receiving invitations from
Douyin to attend offline events with other influencers
and to partner with potential advertisers. Now, two
years after that first video, he has nearly 3 million
followers.
Through “Xingtu” or “Star Tour,” Douyin’s official
commercial platform for influencers that launched last
year, Liu receives and manages offers from companies.
In addition, Liu says, Bytedance staff introduced him to
advertising opportunities with car information app
Dongchedi, which operates under the company’s Jinri
Toutiao brand.
Nevertheless, Liu considers his full-time Douyin-based
career to be relatively rare. He’s also noticed a
significant drop in his income from videos over the last
year or so. Due to the growing number of influencers,
individual celebrities now earn less on average, he said.
In August, Liu began working in the talent
management department of a multi-channel network
(MCN), which matches influencers with companies
that seek their services. He advises Douyin celebrities
with followings of 1 million to 10 million on how to
shape their content and attract more advertising gigs.
In Liu’s opinion, the lifespan of an average “panentertainment”
influencer without a specialty—such as
makeup tutorials, for instance—is only six or seven
months. “Audiences will suffer aesthetic fatigue,” he
told TechNode. Liu himself switches up his style every
three months or so based on trends; his repertoire
includes slapstick humor, imitations of children, as well
as scripted/subtitled stories, all 15 seconds or less.
“If you haven’t put out a major hit for a long time, they
might forget about you.”
At the MCN where Liu works, influencers often take on
other internet tech-related employment or treat the
app as a hobby.
Still, Liu believes that Douyin’s business is a
“sustainable thing, as long as the internet is around.”
Just like YouTube elsewhere in the world, Douyin and
similar platforms are bringing influencers and
audience members closer together.
“Before, you wouldn’t see what other people’s lives are
like, but now you can see it on your phone.”
31
GETTING PERSONAL
HOW BYTEDANCE IS COLLECTING AND USING DATA
TikTok (US)
TikTok has six different privacy policies based on user
location: Germany, the rest of the EU, India, Russia, the
US, and other countries. Within the US, privacy
policies are further divided up between 13 years and
older users and those under 13.
The variation among policies reflects the varied
implementation of data protection regulations across
the world, including the US Federal Trade
Commission’s (FTC) historic $5.7 million legal victory
against TikTok for violating child privacy protections.
To reflect this new reality, the US version of TikTok’s
privacy policy was split and updated this past
February. The new US privacy policy states: “If we
become aware that personal information has been
collected on the Platform from a person under the
age of 13 we will delete this information and terminate
the person’s account.”
Videos and user profiles of under-13 users can no
longer be viewed publicly; nor are those users allowed
to message others in-app, although some personal,
geographic, and “general user data” is collected by
TikTok. Minors in the state of California can request to
have all their personal content removed from the
platform.
As we’ve pointed out before, however, there are no
binding in-app measures to prevent underage users
from simply lying about their age.
Due in part to these reasons, TikTok scored only 35
points out of 100 (“use with caution”) on the
evaluation of its privacy performance by the nonprofit
Common Sense Media. In the “Compliance: following
statutory laws and regulations” category of the report,
TikTok rated only 17. By comparison, Instagram scored
an all-around 39, and also received a 39 for
compliance with regulations.
“It is no secret that tech companies are illegally and
knowingly collecting personal information from
children,” said Common Sense Media CEO Jim Steyer
in a February statement shared with TechNode.
Referring to the popular video app that Bytedance
acquired in November 2017 and merged with TikTok
last August, Steyer said: “Musical.ly wasn’t the first
company and they won’t be the last, which is why we
need the FTC to continue to regularly enforce the
Children’s Online Privacy Protection Act and hold
companies accountable in a big way.”
In a May editorial on Quartz, media design professor
and data privacy activist David Carroll points out
another major issue with the US version of TikTok.
Before the February update, an older edition of its
privacy policy stated that data belonging to
international users could be shared with “any
member of affiliate of our group, in China.”
The new version doesn’t clarify whether this is still the
case; in response to Carroll’s inquiry, Bytedance
representatives said that US user data is not stored in
China and cannot currently be accessed by the
Chinese government, but didn’t confirm the same for
data collected before February 2019.
32
Douyin (China)
Douyin’s privacy policy is similar to TikTok’s US edition
in many respects. For instance, the app states that
with user consent, it may collect personal information,
contacts, video content, and information from
connected third-party social network accounts.
Regarding young users, however, the policy, which
hasn’t been updated since October, has much less
clearly delineated regulations.
Some 8,900 Chinese characters into the text of the
terms, the platform states that users under 18 “should
read and agree to this privacy policy” under the
guidance of their parents or guardians.
The policy then states it will protect underage user
information in accordance with domestic law, and will
share and use their data only as permitted by
regulations, parents, or guardians, seemingly placing
all three on the same level. The platform continues by
saying that “if we find” that minors’ data has been
collected without parental/guardian consent, they will
try to delete the information as soon as possible.
The rest of the policy also contains repeated mentions
of “relevant laws and regulations.”
Similarly: “When you use the identity authentication
feature provided by ‘Douyin’ software and related
services, we will protect your sensitive personal
information in accordance with the relevant laws and
regulations and/or the requirements of the identity
authentication feature (for example: Sesame
authentication).”
Personal information will not be shared without
consent except in some cases. These exceptions
include national security, national defense, public
safety and health, the “greater public interest,”
criminal cases, and the broad category of “other
circumstances prescribed by laws and regulations.”
Under the “canceling your account” section, the policy
states that “we will delete all of your account
information or anonymize relevant information,
except as otherwise stipulated by laws and
regulations.”
In case it wasn’t abundantly clear that user data is
subject to China law alone, the terms also stipulate:
“We will store personal information collected and
created in the course of domestic operations in the
People’s Republic of China, and will not transfer the
above information abroad.”
Douyin has a live-streaming component, and livestreamers
are required by Chinese law to
authenticate their identities. The app’s privacy policy
states that Douyin may collect users’ real names, ID
card numbers, and phone numbers. Later on, the
policy clarifies that users can have most of their data
deleted with the possible exception of real-name
information; users can, however, still email
feedback@douyin.com to request to have it modified.
33
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