Possible TikTok ban could be 'an extinction-level event' for the creator economy

Content creators are watching the clock.

TikTok will be banned in the U.S. in less than a year, unless its owner, ByteDance, sells the company, or the law signed by President Biden last month is blocked by the courts.

Anxiety is coursing through the creator economy, which includes tens of thousands of people who earn a living by making videos on TikTok, an app that has become a prime place for advertisers to reach younger audiences.

Taken together, content creators have become a formidable economic force.

Goldman Sachs estimates that the creator economy is a $250 billion industry, and it is expected to double by 2027.

Some creators on TikTok make side money by hawking products on the app's TikTok Shops. Others produce sponsored videos with brands, retailers and marketing agencies — sometimes the corporate sponsorship is barely noticeable, with TikTokkers recording low-budget, direct-to-screen videos that appear, at first glance, to be just like the rest of their output, except it is generating serious money.

From pandemic boredom to hit influencer career

For some, the hustle on the hit video app has become a new career, but not everyone embraces the usual title for this internet profession.

"I know people have a negative connotation to influencers, and I totally understand that, but there's some of us kind of fell into this by mistake, and this is our job now," said Lauren-Ashley Beck, 34, who lives in Los Angeles.

Besides once being a contestant on the television show "Survivor," Beck has a familiar story: She got bored during the pandemic, so she downloaded TikTok.

"Posting selfies and my food, just like everybody else," she said.

Eventually, she found her sweet spot: doing reviews of reality TV shows. It blew up, almost over night, and continued growing. These days she has marketing deals with HBO, Hulu and Amazon.

"Those are the people that come to me like, hey, can you talk about our shows? And then I build out the community talking about those shows," Beck said.

Talking about television to her more than 500,000 TikTok followers is now her largest source of income.

"I've dubbed myself, 'The Queen of Stream,' " she said.

The Queen of Stream cash has helped her get caught up with her student loans and allowed her to buy a Barbie-pink Ford Bronco, a purchase she made before Biden signed the TikTok ban law.

"I always say, I'm TikTok's biggest cheerleader. If you're a librarian, you could be a TikTokker," she said.

And TikTok has shown, some librarians indeed have made it on the platform, filling the so-called BookTok community with a steady stream of nerdy videos.

But for the Becks of the world, and BookTok creators alike, President Joe Biden's recent action hit like a thunder clap.

TikTok ban could upend creator economy

Under the new law, ByteDance must fully divest from TikTok, or face punishing sanctions that would effectively drive the app into the ground. Providing web-hosting support to TikTok would become illegal. Google and Apple would be forced to remove TikTok from app stores. In sum, the federal government would marshal its resources to put TikTok out of business.

The U.S. claims the Chinese-owned app is a national security concern. Officials say, without direct evidence, that TikTok could be used as a spy tool, or a means for spreading pro-China propaganda to millions of Americans.

James Nord, chief executive of the New York-based company Fohr, which does marketing for creators, said the law has sent shockwaves through the world of content creators.

Most big TikTokkers, Nord said, do not necessarily have large followings on other platforms, so a ban could mean starting almost from square one.

"For many people, this will be a extinction-level event," he said of the possible ban.

His company alone is on track to pay out $20 million to TikTok creators this year from brand deals he has brokered.

"This will shut tens of thousands of small businesses down. They won't get unemployment," Nord said. "There's no lattice of support for these creators."

Pivoting to other platforms is not so easy

So creators are trying to hedge their bets.

TikTokkers are now working on building up their following on the many social media platforms trying to be the next TikTok: YouTube Shorts, Instagram Reels, Snapchat and Amazon's Twitch.

But the big money is still made on TikTok, says Prasuna Cheruku, who runs Diversifi Talent, which helps TikTokkers in under-represented groups land big checks.

"It could be $1,000 up to $15, $20,000 [per video] depending on the creator," Cheruku said. "The majority of the creators I work with are very stressed out and anxious it'll all go away," she said, if the platform is outlawed.

"I have told my creators from the beginning: Make sure you're posting on Instagram, make sure you're posting on YouTube just in case."

Beck, for one, said she is acting as if a ban will happen by cross-posting videos to other platforms. But she said it's tricky, since TikTok success is no guarantee on other social media sites.

"I have been trying to repurpose my TikToks as YouTube Shorts, but it's just not the same viewership," she said, noting that a TikTok video of hers that garners 400,000 views might only get 400 on a rival platform.

Forever the optimist, Beck said she's confident she will be able to make a living on social media in whatever form that might soon take. But she has this advice for TikTokkers feeling less chipper about the future:

"You are not just TikTok, and everything will be OK, truly," she said. "And lean into your other platforms, just in case it does all go away."

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