TikTok’s Internal Estimates Show Even A Temporary Ban Would Cripple Its Entire Business Within Months

TikTok’s Internal Estimates Show Even A Temporary Ban Would Cripple Its Entire Business Within Months

A U.S. ban would shatter TikTok’s business around the world even if the restrictions were later lifted, the company says in a newly filed court document.

A ban that stopped TikTok from operating in the States and lasted two months would reduce the number of Americans using TikTok each day by 40% to 50%, according to the document. Those figures worsen to a 80% to 90% drop in daily active users if the ban went six months, a move that would, essentially, deliver a fatal blow to TikTok’s presence in America.

The ramifications stretch beyond the States. TikTok says American-made content accounts for as much as 60% of the videos consumed by users outside the U.S. It is hard to imagine the company being able to maintain—let alone grow—its audience beyond America with such a drastic reduction in content, particularly since nearly all its popular stars come from the U.S.

TikTok’s status remains in limbo. ByteDance, TikTok’s China-based parent company, appeared to have a deal struck with Oracle
ORCL
and Walmart
WMT
that President Trump had approved, but it’s unclear whether all the sides involved in the deal are on the same page and whether the Chinese government would sign off on it. It faces a pressing deadline: Starting on Sunday, a Trump-issued executive order will ban new downloads of TikTok, though the app will still be able to operate. TikTok asked a U.S. judge for an injunction on Wednesday, hoping to stave off that fate. Another executive order would entirely turn off TikTok’s U.S. presence starting Nov. 12.

TikTok says it has 100 million monthly active users in America, and based on how other social media networks work, probably at least half of those people use TikTok each day. The company hasn’t released comparable figures about worldwide usage.

A few other interesting facts from the new court document:

  • TikTok has experienced exceptionally rapid growth. In August 2018, it had 14.6 million monthly active users in the U.S. By February 2019, it had 26.7 million and by last October, roughly 40 million.
  • TikTok says it had 54.8 million “global active users” in January 2018, a figure that had ballooned to 689.2 million in July 2020. (A note: It’s not clear how TikTok is defining a “global active user,” and the company didn’t use the industry standard measures of daily active users or monthly active users—terms, respectively, for people who used the app at least once a day or once a month.)
  • Until talk about a U.S. ban first began in July, TikTok was adding 424,000 new daily users every day.
  • TikTok revenue dropped $10 million last month as advertisers pulled back on spending amid questions about the app’s future.

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