TikTok: What It Is, How It Works, and Why It’s Popular (2023)

What Is TikTok?

TikTok is a popular social media app that allows users to create, watch, and share 15-second videos shot on mobile devices or webcams. With its personalized feeds of quirky short videos set to music and sound effects, the app is notable for its addictive quality and high levels of engagement.

Amateur and professional creators alike can add effects like filters, background music, and stickers to their videos, and can collaborate on content and create split-screen duet videos even if they’re in different locations.

Key Takeaways

  • TikTok allows users to watch, create, and share short videos online.
  • The app was launched in 2016 by the Chinese technology company ByteDance.
  • Now available in more than 150 different markets, TikTok has offices in Beijing; Los Angeles; Moscow; Mumbai, India; Seoul, South Korea; and Tokyo.
  • The app saw about 1 billion global daily users by early 2022.
  • Despite political pressure on operating in certain places such as the United States, it continues to gain in popularity.

Understanding TikTok

TikTok is a social media app dedicated to short-form videos created for and consumed by users. The length of videos is 15 to 60 seconds.

The format lends itself to entertainment and comedy. However, it is increasingly used for infotainment. So-called influencers who gain a steady audience on TikTok offer snippets of advice and tips along with self-promotion. Beauty, fashion, personal finance, and cooking are all popular topics for informational videos. Increasingly, the format is used to promote and sell products.

Launched in its present form in 2018, TikTok joined the ranks of social media giants in record time. It had about one billion active monthly users worldwide by September 2021. A 2022 marketing report by data.ai (formerly App Annie) predicted that TikTok will break three billion downloads worldwide as well as users spending $3 billion across iOS and Google Play by the end of the year.

Like all social media companies, TikTok has been the target of persistent concerns about the potential use or misuse of the private information that it gathers about its users. The difference is that the majority of TikTok is Chinese-owned.

TikTok LIVE allows users and creators to interact in real time. Users ages 16 and older can launch LIVEs, and those age 18 or older may send and receive gifts during a LIVE.

(Video) Why is TikTok so Popular?

TikTok’s Launch

The name TikTok is meant to suggest the short format of the videos. Launched in September 2016 by the Chinese startup company ByteDance, it’s known there as Douyin. Its stratospheric growth in usage really began in late 2017, when it acquired a rival app, Musical.ly, and ported over its 200-million-account list to TikTok.

ByteDance was reportedly worth up to $140 billion by mid-2020, based on the private sale of a small stake in the company. TikTok alone was said to be worth about $50 billion. That would make it the most valuable startup in the world.

TikTok’s Business

Marketing on TikTok is still maturing, but a growing number of agencies are eager to help brands create the kind of quirky content that gets clicks on TikTok. Conventional advertising that stresses a product’s superior qualities doesn’t work. Light, fun campaigns set to music hit the spot. The ultimate goal is to go viral on the site and spur imitations by TikTok users.

Some of the successful marketing campaigns on TikTok:

  • The Chipotle restaurant chain ran a Halloween “Boorito” coupon giveaway campaign encouraging TikTok users to dress up for the holiday and post their images. The campaign scored four billion views.
  • e.l.f. Cosmetics teamed up with a few social media influencers to create an online reality show and contest called #eyeslipsface. The ad campaign had 9.4 billion clicks as of July 2022.
  • The NBA signed up for an account and scored more than 15.8 million hits as of July 2022. Its aim is to enhance global awareness of the NBA, particularly among young people.

TikTok has offices in Beijing; Berlin; Jakarta, Indonesia; London; Los Angeles; Moscow; Mumbai, India; Seoul, South Korea; Shanghai; Singapore; and Tokyo.

Other TikTok Revenue Sources

Like many other social media sites, TikTok also makes money from in-app purchases. Users can buy coins priced from 99 cents to $99.99 and use them to tip their favorite creators on the platform.

The company grossed $80 million from in-app purchases globally, according to a 2019 industry report. In the first quarter (Q1) of 2019, user spending reached an estimated $189 million globally—222% more than the app grossed during the same period in 2018.That amount ballooned to more than $2.3 billion in 2021, helped in part by the COVID-19 pandemic, which increased social media usage amid lockdowns and other restrictions. As of June 2022, TikTok has earned an estimated $5.5 billion in total lifetime revenue.

TikTok only started running display advertising in 2019. Instead, brands open user accounts on TikTok and, just like any of its users, create and post mini-videos. They can pay to promote their videos to other users. The ultimate goal is to go viral and spur takeoffs, drawing in a huge audience for their brand’s message.

Since January 2014, more than 900 apps have launched worldwide hoping to capitalize on TikTok’s popularity.

(Video) How TikTok's Algorithm Figures You Out | WSJ

TikTok’s User Base

TikTok is one of the world’s most popular social media apps and is available in more than 150 markets and more than 35 languages. The app has seen more than 3.5 billion downloads worldwide, making it one of the most popular apps ever.

Here’s a breakdown of some of the app’s most notable demographics:

  • About 40% of users are ages 18 to 24.
  • 56% are female.
  • About 141 million active users are from the U.S.
  • Its users spend an average of 46 minutes per day on it.

TikTok and Politics

Like most social media sites, TikTok is not immune to controversy. TikTok and many other Chinese-made apps were banned in India in mid-2020 as a danger to the nation’s sovereignty. The move came amid growing tensions between the two nations.

TikTok is banned in Bangladesh. It was also briefly banned in Indonesia for “pornography, inappropriate content, and blasphemy.” The ban was overturned a week later after the company promised to take all objectionable content off the platform and set up a local office to monitor and sanitize content.

In February 2019, the company paid $5.7 million in the U.S. to settle allegationsthat it illegally collected personal information from children. It is the largest civil penalty ever obtained by the Federal Trade Commission (FTC) in a children’s privacy case.

TikTok and the Trump Administration

Starting in July 2020, then-President Donald Trump launched a public attack on TikTok, threatening to ban it from the U.S. on the grounds that the Chinese Communist Party could use data gathered on its users to spy on U.S. citizens. He demanded that TikTok be sold to U.S. interests to eliminate the threat.

Concerns about social media companies’ use and misuse of private information is a bipartisan issue in Washington, so the concern gained some traction. However, by September 2020, Trump had declared that he had solved the problem. TikTok’s U.S. operations would be severed from its Chinese owner, ByteDance, and incorporated as a U.S. company.

The proposed deal would have created a new spinoff company, TikTok Global. Oracle would own a 12.5% stake in the company and become its cloud provider in the U.S. This may have been intended to alleviate concerns that China was using TikTok to gather data on Americans, but apparently, the real change is minimal. TikTok data on U.S. users was always held in the U.S., so it’s just moving from one cloud to another.

Meanwhile, Walmart tentatively agreed to buy a 7.5% stake in TikTok Global. It plans live-streamed shopping events hosted on TikTok. The remaining 80% would remain owned by ByteDance.

The tentative deal has been stalled by numerous court challenges, and the future of the proposed deal remains uncertain under the Biden administration. During a White House briefing on Feb. 10, 2021, then-Press Secretary Jen Psaki denied that President Biden had set any new policy on the app.

(Video) What is TikTok? AND How does it worK?: TikTok Explained for beginners

“So it’s not accurate to suggest that there is a new proactive step by the Biden White House,” Psaki said. “I will note, broadly speaking, we are comprehensively evaluating...the risks to U.S. data...including from TikTok, and we’ll address them in a decisive and effective fashion.” Psaki declined to set a timetable for when such a review would conclude.

Latest Developments

TikTok faces an uncertain future in the U.S. and the European Union (EU). Efforts by U.S. lawmakers to ban the use of TikTok outright have failed on several occasions due to the popularity of the app and aggressive lobbying efforts by the parent, ByteDance.

The app is under fire due to the potential for the Chinese government to mine U.S. users’ data and to potentially influence them through the “For You” function on the app. The fear is that the algorithm of the “For You” function, which remains a mystery, could be used to manipulate users’ behavior and potentially transmit political messaging, possibly interfering in U.S. elections.

The most likely outcome will be for ByteDance to divest a minority portion (20%) of its ownership to U.S. entities, with Oracle and Walmart being frequently mentioned as the most likely U.S. partners. Just such a proposal was made in 2020, where Walmart and Oracle would each buy 10% of a newly created entity called TikTok Global.

TikTok Global would be U.S.-based and subject to U.S. laws and regulations. The belief is that such an arrangement would safeguard the potential for data mining and influence exerted by the Chinese government. As of 2021, the deal is still under review by the Biden administration.

TikTok is also facing scrutiny by the EU and needs to come into full compliance with the EU’s Digital Services Act (DSA), which seeks to vigorously protect users’ private data. The EU has set a Sept. 1, 2023, deadline for TikTok to come into compliance with the DSA rules and regulations.

Failure to meet the EU’s deadline could result in a ban on TikTok in the EU, according to EU Commissioner Thierry Breton. The EU has some of the most stringent privacy rules, and TikTok will be subject to audits of its efforts to stem potential data manipulation and filter content to protect the lives and safety of internet users. Failing an audit could cost the company up to 6% of its total revenue in fines and a potential outright ban in the EU.

In short, TikTok’s popularity has made it a target for digital privacy monitors in multiple jurisdictions, not the least of which are the U.S. and the EU.

What company owns TikTok?

The majority owner of TikTok is ByteDance, a Chinese technology company. In late 2020, following pressure from the then-Trump administration, ByteDance agreed to create a new company, TikTok Global. In this proposal, ByteDance would continue to own 80% of TikTok Global, with Oracle and Walmart as its minority owners and U.S. partners. According to The Wall Street Journal, the deal is on hold pending review from the Biden administration, as of February 2021.

How do I invest in TikTok stock?

You don’t, because TikTok is privately owned 100% by ByteDance. The prior deal to create TikTok Global remains on hold. This includes any plans for issuing an initial public offering (IPO).

(Video) TikTok Business Model - What Makes It So Popular

Is TikTok a publicly traded company?

TikTok is not publicly traded as of this writing. Stay tuned for the announcement of an IPO for TikTok Global.

Is TikTok banned?

As of 2022, TikTok is banned in India and Pakistan. It was briefly banned but restored in other countries including Indonesia and Bangladesh.

TikTok was threatened with a ban in the United States by then-President Donald Trump in 2020, but he backed off after an agreement with owner ByteDance to spin off TikTok as a separate entity, TikTok Global, with minority ownership held by U.S. companies Oracle and Walmart.

When did TikTok come out?

TikTok was first released in September 2016.

The Bottom Line

TikTok is an astronomically popular web app, with more than 3.5 billion downloads worldwide. TikTok allows users to make short videos, roughly 15–30 seconds in length, and distribute them within the app’s following. Most of the videos are based on entertainment, hijinks, and comedy. The site is particularly popular with the under-24 crowd, with about 40% of its users falling in the 18–24 age range.

At this time, TikTok is wholly and privately owned by a Chinese parent company, ByteDance, which has raised fears of TikTok being used to collect and manipulate users’ data by the Chinese government or related entities. TikTok is banned in India for national security concerns, and is banned on U.S. federal and most state governments’ web devices.

(Video) How To Get TikTok Famous in 10 Minutes (Guaranteed To Work)

The U.S. and the EU are both cracking down on TikTok over privacy and ownership concerns, potentially resulting in a ban on the app in those jurisdictions. TikTok has indicated that it will make every effort to meet EU guidelines, while the situation in the U.S. revolves around the ownership by a Chinese company, suggesting that ByteDance may have to sell a portion of TikTok to yet-to-be-determined U.S. partners.


What is TikTok and why is it so popular? ›

TikTok is an astronomically popular web app, with more than 3.5 billion downloads worldwide. TikTok allows users to make short videos, roughly 15–30 seconds in length, and distribute them within the app's following. Most of the videos are based on entertainment, hijinks, and comedy.

What caused TikTok to become popular? ›

TikTok's main selling point is that it features built-in recording and editing capabilities that make it easy for content creators to quickly record, edit, and post video content on the platform–and have them go viral when done right.

How does TikTok make money? ›

TikTok generates revenue from ad revenue and in-app gift purchases. The ads function synonymously as those from other social media platforms: advertisers select their target demographic and TikTok places this messaging in front of the advertiser's desired audience.

What is the benefit of using TikTok? ›

A great feature of TikTok is that it allows users to repurpose content published by other creators, using the 'duet' and 'stitch' features. This means that businesses can effectively launch campaigns off the backs of other creators at a relatively low cost.

What is the most common content on TikTok? ›

And according to TikTok statistics, “entertainment” is the most popular content category on the platform worldwide. This particular hashtag has amassed 535 billion hashtag views. The next most popular categories include dance, pranks, fitness/sports, and home renovations/DIY.

What are the disadvantages of TikTok? ›

So, beware!
  • It Can Harm Privacy. Also, TikTok can harm yours and your teens' privacy. Generally, teens aren't aware of ​the privacy concerns​ that come with putting their lives on display for others. ...
  • It's Prone to Negative Comments. Negativity is a prevalent issue with all social media platforms these days.

What is the main audience of TikTok? ›

80% are between the ages 16-34. This data comes straight from TikTok. Gen Z – 60% of TikTok users are Gen Zers. Gen Zers are trendsetters.

Who pays you on TikTok? ›

TikTok does not directly pay creators to produce and upload videos. TikTok does offer funding for creators in the form of the TikTok Creator Fund (more on that above). Still, payment varies based on factors like the number of video views, engagement rates, and the authenticity of users engaging with the post.

Does everyone get money from TikTok? ›

Can you make money on TikTok? The short answer is: Yes. To make money on TikTok directly you must be 18 years of age or older, have more than 10,000 followers, and have at least 100,000 views over the last 30 days. You can then apply to the TikTok Creator Fund in the app.

What makes TikTok different from other social media? ›

TikTok's key differentiator is that the algorithm was built on an "interest graph." It works using your interests and content that you interact with, capturing your likes and dislikes and associating you with other user groups who share those interests.

What's the risk on TikTok? ›

On Dec. 2, 2022, FBI Director Christopher Wray warned that TikTok's privacy and data collection policies could allow for the capture of sensitive, personally identifiable information and that data could be accessed by the Chinese government for use other than permissions given by the user.

Who uses TikTok the most? ›

Countries with the most TikTok users 2023

As of January 2023, the United States was the country with the largest TikTok audience by far, with approximately 113 million users engaging with the popular social video platform. Indonesia followed, with around 110 million TikTok users.

How much does TikTok pay? ›

Tik tokers earn around 2 to 4 cents per 1,000 views. This translates to an earning between $20 to $40 once your video has gained 1 million views. A viral video with 10 million views costs around $200 to $400 from the creator's fund.

What do people search on TikTok? ›

Educational content does well on TikTok, but entertaining videos are still the most viewed, commented on, and shared, especially in verticals like fashion and retail. In fact, according to TikTok insight data, “40% of Millennial TikTok users on fashion journeys prefer brand content that is fun and entertaining. ”

Is there a dark side of TikTok? ›

Not only do you have some of the youngest users in the world of social media, we are also seeing content that is proliferating through the app that can be potentially harmful to kids. We're seeing disordered eating content, we're seeing posts about suicide and self-harm.

Is it healthy to use TikTok? ›

Experts agree, saying that while these kinds of videos can offer support and a creative way to deal with grief, it can also lead to additional trauma. “For many people, disclosing abuse or mental health issues can be traumatic and harmful,” said Rich, the children's mental health expert.

Does TikTok have inappropriate videos? ›

TikTok can be a kid-friendly experience if you supervise your kids, use safety settings, and stick to songs you already know. But TikTok's emphasis on popular music means many videos include swearing and sexual lyrics, so it may not be age-appropriate for kids to use on their own.

What age uses TikTok the most? ›

Around seven in 10 respondents aged between 18 and 19 years were using TikTok, while usage among respondents aged between 20 and 29 years was approximately 56 percent.

Is there a TikTok for adults only? ›

TikTok has announced that it's expanding its audience controls feature, giving creators the ability to restrict their videos to adult viewers. Prior to this expansion, the adult-only audience controls feature was only available for TikTok Live. Now the company is bringing the feature to its short-form videos as well.

How much TikTok pays per 1,000 views? ›

"According to reports from top influencers, TikTok pays around $0.02 and $0.04 for every 1,000 views. These are reports based on payments received through the TikTok Creator Fund. This is a program that TikTok introduced in 2021 in a bid to compensate content creators for creating content on the platform.

How much does 1 million views on TikTok pay? ›

TikTok pays in the range of $0.02 to $0.04 per 1000 views, so for a million views, you'd be paid $20 to $50. But that's just one of the ways in which you make money from TikTok.

How much do you get paid for 1 million TikTok followers? ›

Those with over a million could earn $1,000 to $5,000 and more per month. Viral content creators could potentially make up to a million dollars per post. But unfortunately most TikTokers don't make very much if anything from the Creator Fund.

Who pays more TikTok or Instagram? ›

By statistics, Instagram has the most users and pays content creators the most.

How much does TikTok pay monthly? ›

How Much Can You Get Paid on TikTok? According to reports from top influencers, TikTok pays around $0.02 and $0.04 for every 1,000 views. These are reports based on payments received through the TikTok Creator Fund.

How much money does a tiktoker make with 2 million followers? ›

TikTok creators with around 100,000 followers could be making between $200 – $1000 a month, while those with 1 million or more followers could be making $5,000+ a month.

How much does TikTok pay for live gifts? ›

2 coins are worth 1 diamond and each diamond is worth $0.05. So, if you receive an 'I'm Very Rich' gift, you will get 1000 coins = 500 diamonds = $25. TikTok takes 50% of the cut, so you will only receive $12.5. The minimum withdrawal amount is $100 and you cannot withdraw more than $1000 in a single week.

How much does TikTok pay for likes? ›

It's estimated that TikTok pays around 2 to 4 cents per 1,000 views on a video. That's all thanks to the TikTok Creator Fund, a program where they committed $300 million to pay creators who use the platform and apply for the program. Creators receive their funds based on a combination of factors: Number of views.

What happens when you get 1,000 followers on TikTok? ›

Once you have 1,000 followers on TikTok, you unlock the LIVE tool, which includes features such as live events, donations, gifts, Q&A, and going live with other creators.

What are the disadvantages of using TikTok? ›

So, beware!
  • It Can Harm Privacy. Also, TikTok can harm yours and your teens' privacy. Generally, teens aren't aware of ​the privacy concerns​ that come with putting their lives on display for others. ...
  • It's Prone to Negative Comments. Negativity is a prevalent issue with all social media platforms these days.

Is TikTok safe to have? ›

Is TikTok safe? It's as safe as just about any other social media platform. It doesn't infect your phone with malware, but it comes with some safety risks like scams and saved user data.

What is the main problem of TikTok? ›

TikTok has been criticized for its handling of user data and privacy. The app collects a large amount of personal information from its users, including their location, contacts, and message contents. Such widespread collection is terrible on privacy grounds, but also has implications for your security.

Does TikTok pay you? ›

TikTok does not directly pay creators to produce and upload videos. TikTok does offer funding for creators in the form of the TikTok Creator Fund (more on that above). Still, payment varies based on factors like the number of video views, engagement rates, and the authenticity of users engaging with the post.

Why do people use TikTok instead of Instagram? ›

Instagram is better for polished content, while TikTok is better for raw, authentic content. If you want to reach a younger audience, consider TikTok. If you're looking to partner with influencers, both platforms can be effective but Instagram may give you more polished options.

How does TikTok impact the world? ›

TikTok and social media has made young impressionable girls constantly compare themselves to others. It makes them adopt unhealthy mindsets and unrealistic beauty standards, leading to mental illnesses.

Who owns TikTok? ›

TikTok is owned by ByteDance, a private company headquartered in Beijing. ByteDance, TikTok's parent company, was founded in 2012. In 2016, the company launched Douyin, the Chinese version of TikTok. In 2017, ByteDance launched TikTok to cater to a more global audience.

Is TikTok still owned by China? ›

ByteDance, the Chinese parent company of social media platform TikTok, has dramatically upped its U.S. lobbying effort since 2020 as U.S.-China relations continue to sour and is now the fourth-largest Internet company in spending on federal lobbying as of last year, according to newly released data.

Can TikTok track you? ›

If you think TikTok is acting like Google or Meta when collecting data, you're not wrong. Consumer Reports (CR), a US-based nonprofit consumer organization, has revealed that TikTok gathers data on people who don't even use the app itself.

Can TikTok access your phone? ›

The most important thing to understand is that while TikTok shares audio and video you post and allows you to restrict who can see that content, it does request a number of permissions on your device. Most notably, it accesses your location and device information.


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