“It’s almost like the Explore Tab that we have on Instagram” said Facebook CEO Mark Zuckerberg in leaked audio of him describing TikTok during an all-hands meeting. But it’s not. TikTok represents a new form of social entertainment that’s vastly different from the lifelogging of Instagram where you can just take a selfie, show something pretty, or pan around what you’re up to. TikToks are premeditated, storyboarded, and vastly different than the haphazard Stories on Insta.
That’s why Zuckerberg’s comments cast a dark shadow over the future of the Facebook family of apps. How can it beat what it doesn’t understand? He certainly can’t ignore it. Facebook’s copycat Lasso has been installed just 425,000 times since it launched in November, while TikTok has 640 million installs in the same period outside of China. Oh, and TikTok has 1.4 billion total installs beyond China to date.
Casey Newton of The Verge today published two hours of audio and transcripts from two internal-only all-hands Q&As held by Zuckerberg at Facebook in July. His comments touch on the company’s plan to fight being broken up by regulators, especially if Elizabeth Warren becomes President. He thinks Facebook would win, but on resorting to suing the government, he says “does that still suck for us? Yeah.” Zuckerberg also describes how Facebook is working to launch a payments product in Mexico and elsewhere by year’s end as Libra deals with regulatory scrutiny.
But beyond his comments on regulation, it’s his pigeonholing of TikTok that’s most alarming. It foreshadows Facebook failing to win one of the core social feeds that its business depends on. Perhaps his perspective on the competitor is evolving, but the leak portrays him as thinking TikTok is just the next Snapchat Stories to destroy.
Zuckeberg’s Thoughts On TikTok
Here’s what Zuckerberg said about TikTok during the internal Q&A sessions, (emphasis mine):
So yeah. I mean, TikTok is doing well. One of the things that’s especially notable about TikTok is, for a while, the internet landscape was kind of a bunch of internet companies that were primarily American companies. And then there was this parallel universe of Chinese companies that pretty much only were offering their services in China. And we had Tencent who was trying to spread some of their services into Southeast Asia. Alibaba has spread a bunch of their payment services to Southeast Asia. Broadly, in terms of global expansion, that had been pretty limited, and TikTok, which is built by this company Beijing ByteDance, is really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world. It’s starting to do well in the US, especially with young folks. It’s growing really quickly in India. I think it’s past Instagram now in India in terms of scale. So yeah, it’s a very interesting phenomenon.
And the way that we kind of think about it is: it’s married short-form, immersive video with browse. So it’s almost like the Explore Tab that we have on Instagram, which is today primarily about feed posts and highlighting different feed posts. I kind of think about TikTok as if it were Explore for stories, and that were the whole app. And then you had creators who were specifically working on making that stuff. So we have a number of approaches that we’re going to take towards this, and we have a product called Lasso that’s a standalone app that we’re working on, trying to get product-market fit in countries like Mexico, is I think one of the first initial ones. We’re trying to first see if we can get it to work in countries where TikTok is not already big before we go and compete with TikTok in countries where they are big.
We’re taking a number of approaches with Instagram, including making it so that Explore is more focused on stories, which is increasingly becoming the primary way that people consume content on Instagram, as well as a couple of other things there. But yeah, I think that it’s not only one of the more interesting new phenomena and products that are growing. But in terms of the geopolitical implications of what they’re doing, I think it is quite interesting. I think we have time to learn and understand and get ahead of the trend. It is growing, but they’re spending a huge amount of money promoting it. What we’ve found is that their retention is actually not that strong after they stop advertising. So the space is still fairly nascent, and there’s time for us to kind of figure out what we want to do here. But I think this is a real thing. It’s good.
To Zuckerberg’s credit, he’s not dismissing the threat. He knows TikTok is popular. He knows it’s growing in key international markets Facebook and Instagram depend on to keep user counts rising. And he knows his company needs to respond via its standalone clone Lasso and more.
But while TikToks might look like Stories because they’re vertical videos, and TikTok might algorithmically recommend them to people like Instagram Explore, it’s a whole ‘nother beast of a product and one that may be harder than it seems to copy.
To crystallize why, let’s rewind to Snapchat. With the launch of Stories, it started to blow up with US teens. Facebook’s attempts to clone it in standalone apps like Poke and Slingshot never gained traction. In fact, none of Facebook’s standalone apps have succeeded unless they splintered off an already-popular piece of Facebook like chat and users were forced to download them like Messenger. It wasn’t until Zuckerberg stuck his clone of Stories front-and-center atop Instagram and Facebook that Snapchat’s user count went from growing 18% per quarter to shrinking. There, Facebook used the same strategy laid out in Zuckerberg’s comments — push its good-enough clone in countries where the original isn’t popular yet.
But Facebook was fortunate because Stories really wasn’t that dissimilar to the content users were already sharing on Instagram — tiny biographical snippets of their lives. Snapchat CEO Evan Spiegel had originally invented Stories as a vision of Facebook’s News Feed through the lens of an ephemeral camera. All users had to know was “I take the same videos, but shorter and sillier, posted more often, and then they disappear”. The concept of Instagram and Facebook didn’t have to change. They were still about telling friends what you were up to. Choking off TikTok’s growth will be much more complicated.
Why TikTok Is Tough To Clone
TikTok isn’t about you or what you’re doing. It’s about entertaining your audience. It’s not spontaneous chronicling of your real life. It’s about inventing characters, dressing up as someone else, and acting out jokes. It’s not about privacy and friends, but strutting on the world stage. And it’s not about originality — the heart of Instagram. TikTok is about remixing culture — taking the audio from someone else’s clip and reimagining the gag in a new context by layering it atop a video you record.
That makes TikTok distinct enough that it will be very difficult to shoehorn into Instagram or Facebook, even if they add the remixing functionality. Most videos on those apps aren’t designed to be templates for memes like TikToks are. Insta and Facebook’s social graphs are rooted in friendship and augmented by the beautiful and famous, but don’t encompass the new wave of amateur performers TikTok elevates. And since each post to the app becomes fodder for someone else’s creativity, a competitor starting from scratch doesn’t offer much to remix.
That means a TikTok clone would have to be somewhat buried in Instagram or Facebook, rebuild a new social graph, and retrain users’ understanding of these apps’ purpose…at the risk of distracting from their core use cases. This leaves Facebook hoping to grow its standalone TikTok clone Lasso which TechCrunch scooped a year ago before it launched last November. But as we’ve seen, Facebook struggles growing brand new apps, and that effort is further hindered by its increasingly toxic brand and sheen of uncoolness. Nor does it help that Facebook must divert development resources to comply with all the new privacy and transparency obligations as part of its $5 billion FTC fine and settlement.
The Next Feed
Facebook’s best bet is to assess the future value of the ads it could run on a successful TikTok clone and apply some greater fraction of that grand sum to competing directly. It’s already made some smart additions to Lasso like tutorials for how to remix and the option to add GIFs as sections of your video. But it’s still failing to gain serious traction in the US. While typical videos on the TikTok homepage where I’m spending a few hours a week have hundreds of thousands of Likes, the top ones I saw in my Lasso feed today received 70 or fewer.
I had Sensor Tower run some analysis comparing TikTok with Lasso since its launch last November, and found that Lasso gets 6 downloads for every 1000 for TikTok in the US. Some more stats:
- US Total Downloads Since November: Lasso – 250,000 // TikTok – 41.3 million
- US Downloads Per Day Since November: Lasso – 760 // TikTok – 126,000
- Average US Google Play Social App Chart Ranking: Lasso – #155 // TikTok – #2
Beyond the US, Lasso has only launched in one other market, Mexico in April, where it’s been faring better but could hardly even be considered a competitor to TikTok. Facebook needs to lean harder into Lasso:
- Mexico Total Downloads Since April: Lasso – 175,000 // TikTok – 3.3 million
- Mexico Downloads Per Day Since November: Lasso – 1,000 // TikTok – 19,000
Zuckerberg may need to find a coherent place for TikTok style features inside Instagram and potentially Facebook. That could be another horizontal row of previews like with Stories and/or a header on the Explore page dedicated to premeditated content. Certainly something more prominent than a single button like IGTV that still no one is asking for. One opportunity to best TikTok would be building a dedicated remix source browser into the Stories camera to help users find content to put their own spin on.
Facebook will also need to buy out top TikTok creators to make videos for it instead, and even quasi-hire some of the most prolific video meme or challenge inventors to give users trends to jump on rather than just one-off clips to watch. Its failure to offer IGTV stars monetization has led many to ignore that platform, and it can’t afford that again.
If Zuckerberg approaches TikTok as merely an algorithmic video recommender like Explore, Facebook will miss out on owning the social entertainment feed. If he doesn’t decisively move to challenge TikTok soon, its catalog of content to remix will grow insurmountable and it will own the whole concept of short form performative video. Snapchat’s insistence on ephemerality makes it incompatible with remixing, and YouTube isn’t nimble enough to reinvent itself.
If no American company can step up, we could see our interest data, faces, and attention forfeited to an app that while delightful to use, heralds Chinese political values at odds with our own. If only Twitter hadn’t killed Vine.
Oracle now monitoring TikTok’s algorithms and moderation system for manipulation by China’s government – TechCrunch
Oracle has begun auditing TikTok’s algorithms and content moderation models, according to a new report from Axios out this morning. Those reviews began last week, and follow TikTok’s June announcement it had moved its U.S. traffic to Oracle servers amid claims its U.S. user data had been accessed by TikTok colleagues in China.
The new arrangement is meant to allow Oracle the ability to monitor TikTok’s systems to help the company in its efforts to assure U.S. lawmakers that its app is not being manipulated by Chinese government authorities. Oracle will audit how TikTok’s algorithm surfaces content to “ensure outcomes are in line with expectations,” and that those models have not been manipulated, the report said. In addition, TikTok will regularly audit TikTok’s content moderation practices, including both its automated systems and its moderation decisions where people are choosing how to enforce TikTok policy.
TikTok’s moderation policies have been controversial in years past. In 2019, The Washington Post reported TikTok’s U.S. employees had often been ordered to restrict some videos on its platform at the behest of Beijing-based teams, and that teams in China would sometimes block or penalize certain videos out of caution about Chinese government restrictions. That same year, The Guardian also reported TikTok had been telling its moderators to censor videos that mentioned things like Tiananmen Square, Tibetan independence, or the banned religious group Falun Gong, per a set of leaked documents. In 2020, The Intercept reported TikTok moderators were told to censor political speech in livestreams and to suppress posts from “undesirable users” — the unattractive, poor or disabled, its documents said.
All the while, TikTok disputed the various claims — calling leaked documents outdated, for instance, in the latter two scenarios. It also continued to insist that its U.S. arm didn’t take instructions from its Chinese parent, ByteDance.
But a damning June 2022 report by BuzzFeed News proved that TikTok’s connection to China was closer than it had said. The news outlet found that U.S. data had been repeatedly accessed by staff in China, citing recordings from 80 TikTok internal meetings.
Following BuzzFeed’s reporting, TikTok announced that it was moving all U.S. traffic to Oracle’s infrastructure cloud service — a move designed to keep TikTok’s U.S. user data from prying eyes.
That agreement, a part of a larger operation called “Project Texas,” had been in progress for over a year and was focused on further separating TikTok’s U.S. operations from China, and employing an outside firm to oversee its algorithms.
Now, it seems Oracle is in charge of keeping an eye on TikTok to help prevent data emanating from the U.S. from being directed to China. The deal steps up Oracle’s involvement with TikTok as not only the host for the user data, but an auditor who could later back up or dispute TikTok’s claims that its system is operating fairly and without China’s influence.
Oracle and TikTok have an interesting history. Towards the end of the Trump administration, the former president tried to force a sale between the two companies, bringing in long-time supporter, Oracle founder and CTO Larry Ellison to help broker the deal for his company. That deal eventually fell apart in February 2021, but the story didn’t end there, as it turned out.
But while this new TikTok-Oracle agreement has significance in terms of the tech industry and in politics, Oracle’s deal with TikTok doesn’t necessarily make the firm a more powerful player in the cloud infrastructure market.
Even with TikTok’s business, Oracle’s cloud infrastructure service represents just a fraction of the cloud infrastructure market. In the most recent quarter, Synergy Research, a firm that tracks this data, reported the cloud infrastructure market reached almost $55 billion with Amazon leading the way with 34%, Microsoft in second with 21%, and Google in third place with 10%. Oracle remains under 2%, says John Dinsdale, who is a principal analyst at the firm.
“Oracle’s share of the worldwide cloud infrastructure services market remains at just below 2% and has shown no signs of meaningful increase. So Oracle’s cloud revenue growth is pretty much keeping pace with overall market growth,” Dinsdale told TechCrunch. Synergy defines “cloud infrastructure services” as Infrastructure as a Service, Platform as a Service and hosted private cloud services. Dinsdale points out that Oracle’s SaaS business is much stronger.”
Spotify prompts some users to record reaction podcasts to playlists – TechCrunch
After testing new in-app podcast recording tools for users in New Zealand, Spotify is now trialing a new audio feature in Vietnam, one that’s designed to encourage users to record voice reactions to playlists.
A Reddit user posted screenshots of the feature, showing how they received a prompt to react to a playlist with a voice clip that will be posted as a podcast episode. As per its previous test in New Zealand, it’s fair to assume that these reaction ‘podcasts’ will be published directly to creators’ personal profilers where followers will be able to listen.
The screenshots show that users included in the test are seeing a microphone icon on playlist screens, and upon tapping that, they see a new screen that prompts them to record a voice reaction to the playlist.
Once they hit the button, they can either record in one go or multiple clips by pausing. Later, they can edit the clip, add background music, and tag the playlist before publishing.
This workflow is similar to the test in New Zealand, except in that test, the starting point was a “Record Podcast” button on the home screen. So this test is more about giving a prompt to users who might not have a podcast idea in their mind.
Spotify has confirmed the test, but the company didn’t share any details about what locations the feature is available, and how it plans to moderate these voice reactions.
“At Spotify, we are always looking for ways to enhance our users’ experience on our platform, and we regularly test features that we believe will bring value to listeners and creators. We are currently running a limited test of in-app audio creation, but have no further details to share at this time,” the company said in a statement to TechCrunch.
As we noted in our story in June, a lot of these features are powered by Spotify-owned podcast creation app Anchor. These tests indicate that the streaming giant is trying to convert listeners to creators by providing them with easy in-app tools to make and publish podcasts.
In its Q2 2022 earnings last month, Spotify said it now has 4.4 million podcasts on the platform, and users engaging with them have grown at a “substantial double digits year-on-year.” Spotify has invested more than $1 billion in podcasting in the last few years with €83 million ($84.3 million) invested this year alone to acquire podcast analytics companies Podsights and Chartable.
Bumble experiments with group chats, polls and video calls for its new social networking feature, ‘Hive’ – TechCrunch
Dating app maker Bumble revealed more of its plans to strengthen its social networking features during last week’s Q2 earnings, which saw the company’s shares slump over its lowered financial outlook despite delivering a revenue beat. Now, new images show what Bumble has been developing as part of the larger revamp of its “Bumble BFF” friend-finding feature — a change that could help the app attract a new audience beyond just young singles. Specifically, Bumble BFF has been testing a new “communities” offering it’s calling “Hive,” which, the images show, may include support for features like group chat, polls and video calls.
Bumble briefly referenced its plans for Hive on its Q2 2022 earnings call with investors, noting Hive was a “next-generation offering” focused on helping people find “platonic connections through small communities.” In other words, a groups product.
“As we have shared before, our approach is built on the insight that people want to find friends, acquaintances and connections through shared struggles and common joys: moving to a new city, navigating parenthood, finding a partner for hiking, or really anything else in between,” founder and CEO Whitney Wolfe Herd told investors.
She noted Bumble had recently expanded its alpha tests of the new Bumble BFF feature to the Greater Toronto area where Bumble users have since created thousands of these online communities known as “Hives.”
The promise of platonic social networking is one the company believes could help it find engagement beyond the world of online dating. During its tests, Bumble said the weekly average number of sessions for BFF members increased by two-thirds, and their weekly time spent in-app was up 16%.
According to new images released by product intelligence firm Watchful, Bumble’s Hive includes a variety of now-standard social networking features. It shows BFF members can create profiles, join interest groups led by admins, publish posts, engage in group chats, create and respond to polls and more. There’s also an option for group video calls within the “Hives.”
Video is not entirely new to Bumble, however.
The company also told investors it has been testing both video and audio in select markets as a way to enhance member profiles with “richer and more dynamic” content. This could additionally help Bumble better compete against a growing number of video-focused dating apps, like Snack, S’More, Desti and others.
More broadly, Bumble’s latest updates aim to address the shift among younger, Gen Z users who are inclined to embrace apps that allow them to socially “hang out” online — like livestreaming app Yubo and various friend-finders, including those that help them make new friends on Snapchat and elsewhere, such as Hoop, Wink, Wizz, Qudo, Wave, LMK, Swipr and Vibe, among others. Dating giant Match also embraced this trend with its $1.73 billion deal for Hyperconnect, a company that had been more focused on social networking than dating. However, that investment has not yet paid off beyond bringing audio and video technologies to various Match dating apps.
Bumble was unable to provide a statement on the new Hive features, when reached for comment.
In Q2, Bumble reported $220.5 million in revenue in its most recent quarter, ahead of Wall Street estimates, but saw a loss of 3 cents per share versus the 1 cent loss expected. It also lowered its full-year revenue forecast citing increased competition with Match, the war in Ukraine, inflation and foreign exchange headwinds.
In addition to Bumble BFF’s Hive, the company is working on new astrology features, product enhancements for LGBTQIA+ users, tests of “messaging before match” features, audio and video features, and other monetization products.
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