Five Qualities of Next Generation Entertainment Platforms

By Simon Pulman, Partner

If your only exposure to TikTok is seeing the occasional funny video pop up on Facebook or watching your nieces studiously rehearse one of Charli D’Amelio’s signature dances, then you could be forgiven for wondering what all of the fuss about a potential ban is about. Likewise, if you’ve heard of Fortnite but you have no idea how Twitch works, you might not be aware of the degree to which Twitch is disrupting the audience for traditional television and even live sports.

Irrespective of whether TikTok survives (at least, in its present form), the impact that it has had on the future of entertainment consumption is immeasurable. And likewise, having fended off competition from the likes of Mixer, Twitch is poised for further extreme growth. Both platforms have lessons that those in traditional media would do well to heed when seeking to identify (or perhaps create) the next major media platform.

1. They Are A Culture And A Language: TikTok is not merely a video sharing platform. It is its own discrete culture and language that is impenetrable to those who are not on the platform. In essence, TikTok is an extreme evolution of “meme culture,” and without familiarity with the various “trends” that move rapidly through TikTok and the key creators and personalities who often create them, it is impossible for a viewer to understand many TikTok videos in isolation. Like all languages, TikTok builds upon itself, as users create videos that mimic, parody or comment upon an existing popular video. None of this is explained to the user upon joining the app. It has to be absorbed and understood by interacting with videos. This means that for Gen Y and college students, it is simply essential for them to be on TikTok in order to communicate with and relate to each other. It’s the concept of tuning into an old broadcast “watercooler show,” just amplified exponentially.  Likewise, Twitch has its own “language” in the form of “emotes” that viewers can post in chats while watching videos. Like memes, emotes require an understanding of context and meaning – and a shared understanding of emotes can create a common bond between the user base.

It is not an exaggeration to state that TikTok in particular is the single biggest communication and culture platform for Gen Y, and accordingly, is also the easiest way to mobilize young people. If TikTok still exists, it could have a significant impact on the upcoming US election – which is perhaps why President Trump is so keen to shut it down. We have already seen the influence of TikTok in action when TikTok users apparently reserved tickets to Trump’s June rally in Tulsa Oklahoma, falsely giving the impression that the event was a sellout. TikTok content is also highly shareable, meaning that content can live and spread off of the platform. This helps to bring new users into the platform. Compare with Quibi, which launched with zero sharing or social capability whatsoever, and a rigidly old-world walled garden approach.

2. They Have Their Own Stars: To millions of teenagers, the biggest celebrities on the planet are not actors or pop stars, but rather two sisters from Connecticut – Charli D’Amelio and Dixie D’Amelio. The D’Amelio sisters built a presence on TikTok at an astoundingly fast rate (at the time of writing, Charli alone has almost 86 million followers and over 6.6 billion “likes”). The D’Amelios have parlayed that platform into myriad commercial endorsements (Charli has her own drink at Dunkin Donuts) and, in Dixie’s case, a singing career. Likewise, within the world of Twitch, the likes of Ninja and Pokimane are bona fide stars, often attracting millions of fans for their “streams.” Like the D’Amelios, big Twitch influencers monetize their profiles in multiple ways, ranging from traditional product endorsements, to sponsored content, to Twitch “donations” whereby fans can simply donate cash to the influencers to thank them for their content (and for a moment of fleeting recognition).

These new influencers operate differently to celebrities of old. While they still have managers and publicists, and seek to curate a brand, they are generally more open about their personal lives because “authenticity” is highly valued by their audiences. With that said, several influencers have publicly articulated their struggle at maintaining a distance between their public persona and private life, most recently Twitch streamer Pokimane, who has been unfairly accused of concealing that she has a boyfriend in order to maintain her fanbase. Maintaining a level of distance can be difficult for influencers whose livelihoods depend on interacting regularly and directly with fans. Indeed, there are many “gossip accounts” that focus on the rumors surrounding influencers and their personal lives.

The challenge for traditional entertainment executives is that the new era of talent does not necessarily need to crossover into traditional media. While it was recently announced that Addison Rae Easterling has accepted a role in “He’s All That” (a reimagining of the Rachael Leigh Cook/Freddie Prinze Junior romcom), most TikTok influencers, and certainly most leading Twitch influencers can make more money, more quickly simply sticking to their core platforms (or other media that they can exert more control over, such as podcast).

Moreover, as an attorney who has negotiated many deals to hire Twitch influencers for “traditional media,” it is important to note that new media influencers, and their reps, value different things to traditional talent and are not always prepared to agree to otherwise accepted “industry norms.” For example, we typically see a lot of pushback against “options” in TV or anything that could lock the talent in for an extended period of time. Additionally, the concept of providing free promotional services (including by social media) as part of the engagement is totally foreign to influencers used to being paid on a “per post” basis.

3. They Are Broadcast Platforms: While platforms such as Instagram and particularly Snapchat have leant into the concept of users sharing content with people that they already know, TikTok and Twitch are broadcast platforms on a massive scale. They operate on a “one to many” model, whereby an individual user can theoretically reach millions of total strangers all across the world from their own home. TikTok in particular is probably the biggest and most effective broadcast ever built, with its “your page” discovery algorithm allowing hit videos to potentially reach billions of users. Many Gen Y users want to experience stardom above all else, and while TikTok’s incumbent “stars” (such as the D’Amelios, Addison Rae, the inhabitants of Hype House, and now Bella Poarch) certainly have a leg up, TikTok remains the only platform in the world where a user can potentially acquire half a million followers in a day. Twitch is a harder platform to crack, and many streamers labor away streaming for few viewers. However, there are still opportunities to rapidly grow a userbase on Twitch – especially around the launch of a new game. For example, multiple Twitch users gained over one hundred thousand followers in the month following the release of the hit battle royale game “Fall Guys,” with the user “MrKeroro10” gaining almost 400,000 users.

4. They Are Highly Personalized. At first glance, there may be little that seems to differentiate TikTok from predecessors such as Vine, or its many clones. It’s a platform for short videos, right? Well, yes and no. The strength of TikTok is actually in its algorithm, which by tracking user behaviors and habits in many ways (some no doubt concerning to privacy advocates), is simply the most accurate recommendation engine ever created in a media app. As a result, within a few hours of using TikTok, the algorithm will learn an individual’s preferences – whether that’s music, cooking, dancing or humor. Thus, while it is likely that most TikTok users will see videos from the megastars (Charli, Addison Rae, etc.) at some point, it is not unusual for the “for you page” of two users to be completely different.

It’s quite fascinating to see the differing approaches of two media companies through 2020 so far. Quibi bet on extremely expensive, traditional television or film content chopped up into smaller chunks and, presumably, aimed at a broad audience. TikTok focused on serving up an endless stream of short, user generated, highly personalized content. It’s not a secret that one company’s approach was more successful than the other. Media companies need to accept that the future of media is personalization – which is perhaps why Netflix has invested so heavily in a diverse range of scripted and unscripted content, often internationally focused.

5. They Can Create New Hits – And Revive Old Ones: The power of TikTok to create hits and stars (it is now the essential driver for creating new music hits) is well documented, as is the influence of Twitch in popularizing new video games. However, both platforms have the capability to revive catalogue titles as well. On TikTok, a popular influencer posting a lipsync to a scene from an old movie, or a dance to an old song (which will inevitably lead to thousands of copycat videos) may lead to millions of users discovering that piece of content for the first time -essentially introducing it to an entirely new audience and increasing its value significantly. For that value, media companies may wish to advise their legal departments to be judicious in policing content that could arguably be infringing (whether TikTok videos are sufficiently “transformative” to be fair use is a discussion for another day), because the halo effect of trending on TikTok could be significant.

Disclaimer: While our firm does not represent either Twitch or TikTok, we do represent multiple clients active on both. We also represent Triller, a TikTok competitor.