How TikTokers are Adapting to New Territory as the Threat of Increased Ban Looms
Charli D’Amelio, once a professional dancer, has now become a renowned content creator on TikTok, earning millions of dollars alongside her sister Dixie. However, D’Amelio is uncertain about whether she can continue providing highly viral short videos to her 152 million followers for much longer. A law supporting a ban on TikTok, owned by China’s ByteDance, is currently being considered in the US House of Representatives, garnering support from President Joe Biden.
Seeking New Territories
Given the uncertain political winds, D’Amelio is looking for new avenues to establish her own “territory.” Her latest endeavor involves partnering with Shopify to bring her family’s online shoe brand into physical stores. D’Amelio understands that social media platforms come and go. She states, “There are new apps, new people, new interesting trends. You’re not always going to be the first to handle everything.”
D’Amelio’s family, along with other creators, have spoken with CNBC about their concerns regarding the political and national security issues surrounding TikTok. They are now focusing on alternative ways to sell their brands. Marc D’Amelio, Charli’s father and CEO of D’Amelio Brands, compares social media to a hamster wheel and believes that establishing a genuine brand ensures less dependency on any particular platform.
The Growing Ban Threat
The US House of Representatives’ Committee on Commerce and Energy recently voted in favor of a bill that would force ByteDance, TikTok’s parent company, to divest its ownership rights within six months. Failure to comply would result in a complete ban of the app in the country. The bill received unanimous approval with 50 votes in favor. President Biden has also expressed his intention to sign the bill if it passes through Congress.
In response to the vote, TikTok warned its users about the potential damages a complete ban could cause, affecting millions of businesses, disrupting the livelihoods of many creators across the US, and hindering artists from connecting with their audiences.
Previous Ban Attempts and Concerns
This marks the strongest step the US has taken against TikTok since former President Donald Trump’s unsuccessful attempt to ban the app in 2020. Similar efforts over the past year were halted due to TikTok’s lobbying efforts. Last November, a US judge opposed an earlier ban issued by the state of Montana, which was set to take effect on January 1, 2024. Currently, the app has approximately 170 million users in the US.
Charli D’Amelio admits, “There is definitely some fear when it comes to social media because you never know what’s going to happen next.”
Earning Money on TikTok
On TikTok, users can earn money through the app’s creator fund, a rewards system that targets popular videos over a minute long. Creators can also generate revenue through brand partnerships, affiliate sales on TikTok Shop, and receive “gifts” from followers during live streams.
The D’Amelio Family’s Rising Fame and Ventures
Since becoming famous on TikTok in 2019, Charli D’Amelio has been recognized by Forbes as the highest-earning creator on the platform. According to the magazine, she and her sister earned a combined total of $27.5 million in that year.
The D’Amelio family has also been featured in the reality show “The D’Amelio Show” on Hulu, which has recently finished its third season. The sisters have collaborated with various fashion brands, including Prada, Burberry, and Puma.
In September 2022, the family launched their own brand, D’Amelio, which includes D’Amelio Shoes and Be Happy Snacks. The joint venture raised $6 million in funding in 2022, with contributions from notable figures such as Fanatics CEO Michael Rubin, entrepreneur Richard Rosenblatt, and Apple’s CEO Eddy Cue.
Collaborating with Shopify
Through the partnership with Shopify, the D’Amelio family aims to establish a permanent brick-and-mortar store, closing the gap between the digital creative economy and the physical retail world. Shopify has reported a five-fold increase in offline sales since 2019, indicating notable changes in consumer behavior.
Jessica Williams, Shopify’s Director of Brand Partner Relations, states in an interview, “Fans really want to come and experience the brand, meet the creators, and then touch the product.”
In 2023, offline sales accounted for $441 million out of Shopify’s total revenue of $7.1 billion, representing over 6% of the company’s overall earnings. This includes revenue from payments, subscriptions, and point-of-sale hardware.
By adapting and exploring new avenues, TikTokers like Charli D’Amelio are making strategic moves to secure their financial future while navigating the uncertain landscape of social media platforms.
Sources: CNBC