The notion that TikTok could also be banned from the USA, or bought to a home firm by way of a pressured divestiture, raises a poignant query: how a lot is TikTok’s US enterprise price? Whereas TikTok isn’t a publicly traded firm and doesn’t disclose its income metrics, selectively-published and (doubtlessly, strategically) leaked figures are useful in formulating an estimate of the corporate’s efficiency throughout income and consumer base progress:
Notice that TikTok’s income is just not comprised completely of promoting spend. TikTok gives in-app purchases for cash, which can be utilized to tip creators and to increase (promote) movies. Whereas this possible represents a small proportion of whole income, the cash generated from boosts might doubtlessly be categorised by TikTok as promoting income, and it’s topic to the 30% platform price on iOS, per Apple’s App Retailer guideline replace final October.
These numbers, in combination, aren’t useful for estimating the US share of TikTok’s income. However comparables may be drawn from Meta and Snap for that goal utilizing every firm’s share of whole promoting income generated in the USA. Fb and Snap are banned in China; TikTok, whereas owned by Chinese language-domiciled ByteDance, doesn’t function in China, the place its sister app, Douyin, holds dominion. So whereas the geographic distribution of customers for every app isn’t equal, the shortage of presence in China doesn’t completely distort the comparability by way of skew. TikTok additionally acquired many customers from Snap, so it’s not unreasonable to imagine that each merchandise have an identical geographic attain.
However Meta and Snap don’t report income metrics for the USA. Fb studies income for the USA and Canada, whereas Snap studies income for North America. So deriving the US-based proportion of income for every requires adjusting these numbers, as above. To reach on the US-only estimates, I lowered the North American income values in accordance with the weighted GDPs of the nation mixtures as a proxy for promoting (and in-app buy) demand.
This vary of 44% and 59% looks like an affordable spectrum upon which to position an estimate of TikTok’s US income share — which, if utilized to 2022 income estimates of $10BN, is between $4.4BN and $5.9BN. Notice that the Fb Blue app noticed MAU of 266MM in the USA and Canada in This autumn, in comparison with Snapchat’s 100MM in North America and TikTok’s 150MM within the US. Given the distinction, TikTok’s share of US income could also be nearer to Snap’s than Meta’s, on account of the decrease degree of penetration.
