We talked about John’s article The Best Stats & Quotes From ‘Alienated America: Why Some Places Thrive While Others Collapse’, John’s take on the findings of that book. I mentioned the fact that the number of hours needed to work at minimum age to pay college tuition has increased about tenfold in the last 40 years, and the book Bowling Alone by Robert Putnam.
Here is the comparison between the minimum wage and average university tuition costs:
And this are the changes since 1979 in average wages, the wages of the top one per cent, and productivity.
If, when I say TikTok, your mind goes to a clock, then you are not in the demographic for TikTok.
TikTok is a video-sharing app, with a very young demographic. It’s got something approaching a billion users, and that’s not counting the users of a parallel app in China called Douyin, which is basically identical, except firewalled off, to comply with Chinese censorship laws.
To put that in context, Facebook took almost eight years to get to a billion users. TikTok won’t be three years old until September.
The videos are limited to 15 seconds in duration, and as you might expect they normally center on music and youth culture. If you want to feel old, download it and swipe through a few videos. Users who get more than 1,000 followers unlock a feature that allows you to do live streams to all of those followers, and broadcast live video to them. So far, so standard social media.
But the other aspect of TikTok is the ability to send virtual gifts. Basically users can send a digital gifts to each other. In case you don’t know what that is, it just means that a cute little symbol pops up on the user’s screen. Obviously they don’t have any value, except when they do.
Gifts have cute names like Panda, Rainbow Puke, Sun Cream and Drama Queen. But to send them, users must pay for them, and the prices range from a few cents for the panda to almost $70 for the Drama Queen. Remember that there is nothing of value here, apart from the fact that young users seem to be willing to pay to send them.
And they are sending them to TikTok stars, those people with more than a thousand followers – or in some cases millions of followers. Bytedance, the company that owns TikTok and its Chinese equivalent Douyin seems to have hit on a formula that encourage young people to hand over their money in return for very insubstantial benefits, like having their star call out their name on a live stream.
And it can be very young people – pre-teens, and it can be a lot of money, some kids have sent hundreds of dollars worth of gifts. There is nothing in the software to check their age or limit how much they send. It seems that half of this money goes to the recipient and half to the owners of TikTok, which has propelled them to a valuation of $75b.
I’m not saying all of this to go off on a moral panic or do a Maude Flanders saying ‘somebody think of the children’; there certainly are exploitative aspects to this, but the point I’m interested in is, firstly, that these social networks can mushroom from nothing to apparent global dominance within a couple years, and that they can melt away just as fast. Remember Vine? It was the previous video sharing phenomenon. It was bought by Twitter for only – ha, only – $30m, six months after it launched. It lasted four years in total.
I think it shows that many areas of the internet are still a wild west, we have some way to go before it takes on the characteristics of a mature business platform. If I were TikTok, I’d take those billions and run. The same probably goes Facebook and Twitter.