What Is TikTok?

Learn more about the high-flying app

TikTok logo displayed on phone
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TikTok Explained

TikTok is a free, downloadable, online app that allows members to exchange short videos and text messages with each other, with video sharing the most popular feature of the site. TikTok hosts videos that range from 15 seconds to three minutes, and the platform mostly includes videos of stunts, pranks, tricks, how-tos, and general entertainment, such as dancing and singing.

Like most social media platforms, TikTok makes money from advertising and in-app spending. Certain users, called “creators,” can also make money based on the number of views of their videos. Followers can also voluntarily “gift” money (i.e., tip) to the creators of their favorite videos.

Key Takeaways

  • TikTok is a free social media sharing website where users can post short-form videos and text.
  • TikTok is the international version of the Chinese website Douyin. Both platforms are privately owned by the Chinese conglomerate ByteDance.
  • The growth of TikTok has been astronomical, with active monthly global users numbering more than 1 billion (140.6 million of which are U.S.-based) and 3.5 billion downloads worldwide as of 2022.
  • Parent company ByteDance is actively involved in multiple business lines, ranging from education to enterprise software and healthcare.
  • TikTok is under the pressure of a potential ban in the EU if it does not meet the rules of the DSA (Digital Security Act).

TikTok was first released internationally in 2017, but it became a global juggernaut following its purchase of Musical.ly in August 2018. TikTok is the international spinoff of the Chinese social media site Douyin. Both platforms are privately owned by the Chinese conglomerate ByteDance.

Since its release globally in 2018 as the international version of the Chinese Douyin social platform, TikTok has seen astronomical growth in just a few years, to the point where the platform is challenging the likes of Alphabet Inc.’s (GOOG, GOOGL) YouTube, Meta Platforms Inc.’s (META) Instagram, and Snap Inc.’s (SNAP) Snapchat for total users, to name a few.

After it launched globally in 2018, TikTok came under scrutiny for allegedly harvesting users’ data and profile information. At that time, TikTok ran its global operation from a central server located in China. To mollify suspicions, TikTok moved to establish individual country server sites (India still blocks TikTok), ostensibly inaccessible from the main company in China. The move to individual country servers also allowed TikTok to avoid Chinese censorship and content restrictions. With this newfound structure, TikTok’s global growth began to skyrocket.

TikTok’s mission statement: “To capture and present the world’s creativity, knowledge and moments that matter in everyday life. TikTok empowers everyone to be a creator directly from their smartphones, and is committed to building a community by encouraging users to share their passion and creative expression through their videos.”

Parent Company ByteDance: More Than Social Media

ByteDance is not just the owner of social media giants TikTok and Douyin. Indeed, ByteDance has a portfolio of holdings spanning from education services (tutoring) to enterprise software and recently into healthcare. To put it mildly, ByteDance has ambitions far beyond the social media sphere, according to Forbes. ByteDance owns or has invested in companies including news organizations like Toutiao in China, medical sites such as the encyclopedia Baikemy, and a suite of medical information and tools (e.g., online consultations) named Xiaohe.

Furthering its ambitions in the healthcare sphere, ByteDance bought one of the largest private hospital chains in China, Amcare Healthcare, for $1.5 billion in August 2022. ByteDance is not alone among major websites in venturing out into the healthcare sphere—Amazon.com Inc. (AMZN) has expanded into the healthcare field with its acquisition of One Medical.

ByteDance’s aspirations in the healthcare field are seen as part of the Chinese government’s plan to become a leader in artificial intelligence (AI) and global health by the end of the decade. The Washington Post reported in August 2021 that the Chinese government holds an estimated 1% and has a seat on the board of ByteDance.

How TikTok Works

Members join by downloading and signing up for the app using only their email address, username, and password. If you’re concerned about the safety of your account, two-step verification is available with a phone number or your email address, where a code will be sent to that address when you seek to sign in.

Members then start a circle of friends by following other users and go on to build an ever-larger circle of friends by liking or following other members’ videos and texts. If you’re a member of TikTok and you release a video, it’s automatically visible to your circle of followers. This serves as an incentive to follow other TikTok members to build the largest circle of followers and get the most video content views possible.

TikTok users can also make money by registering as a “creator” after acquiring a sufficient number of followers, typically over 10,000 with at least 100,000 views in the last 30 days. These users can then earn 2–4 cents per 1,000 views of their videos. TikTok’s “creator fund” bases the payment amount on a number of different factors, such as the creator’s account maintenance, video suitability, and the uniqueness of views.

Hugely successful creators with millions of followers can generate significant income in this way. For example, a creator who receives 1 million views can earn $20–$40, and a user who garners 10 million views can earn $200–$400.

TikTok also uses an AI algorithm that tracks video topics that users have liked or followed in the past. As the app learns a user’s preferences—say, “cute animals”—it will increasingly display videos along the lines of those favorite subjects. To not be inundated with “cute animals” videos, for example, the algorithm will also run random videos to your account to see where else your interests lie.

Latest Regulatory Developments

On the regulatory front, TikTok has been under sporadic pressure by the US to rein in content and protect users' personally identifiable information. To date, those efforts have gone nowhere due to the popularity of the app and a heavy lobbying campaign. But US lawmakers remain leery of the app given its size and reach, so further efforts to ban the app in the US are not out of the question.

More concretely, TikTok is also facing scrutiny by the EU and needs to come into full compliance with the EU's DSA (Digital Services Act), which seeks to vigorously protect users' private data. The EU has set a September 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. (cite) 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. (cite)

TikTok by the Numbers 

In the graphs below, we see the breakdown of global users according to multiple advertising metrics, such as the number of monthly active users. The figures below generally understate the real picture, as it only includes users ages 18 and older, which is TikTok’s stated target audience. But a significant number of users ages 13–18 exists, adding to the already impressive stats.

TikTok advertising stats


Here are some other interesting facts and figures about TikTok :

  • TikTok has more than 1 billion monthly active users worldwide.
  • TikTok has more than 140 million active users in the United States alone.
  • The TikTok app has been downloaded more than 3.5 billion times worldwide.
  • TikTok users spend an average of 22.9 hours a month in the app.
  • TikTok is available in more than 150 countries worldwide, using more than 35 different languages.

Can I buy shares of TikTok?

It is not possible to buy shares in the social media platform. TikTok is privately owned by a Chinese media conglomerate named ByteDance. Over the course of its existence, TikTok has received investments by private equity firms and venture capital investors. As of this writing, the public has not yet had a chance to partake in TikTok’s explosive growth, and there is no talk of the company going public anytime soon.

Is TikTok addictive?

Addictiveness to the platform was one of the early concerns surrounding TikTok as it launched globally and experienced massive growth. Given the amount of time that users spend on the site—roughly 22.9 hours a month—it would be fair to say that TikTok has addictive qualities. Users should be aware of the amount of time they spend on the site and moderate their usage to a reasonable amount of daily time.

How hard is it to post a video on TikTok?

The process of posting a video is extremely easy, as new video postings are the lifeblood of the site. Users have to make their video (typically 15 seconds but can be as long as three minutes) and then hit the post-a-video button on the app, and voila, your video is public and can be seen immediately by your followers. Other users can then find it based on hashtags that video creators attach to their posts, such as “cute animals” or “football,” to name a few common examples.

Can I make money by creating and posting videos on TikTok?

Yes. “Creators” with millions of followers and more can earn around 2–4 cents per 1,000 views of their videos, according to a 2020 report on the TikTok Creator Fund. Creators and other members can also receive “gifts,” or tips, of money—e.g., $5–$10—from other members as a token of appreciation for their video.

Is TikTok safe to use?

Yes. TikTok requires only minimal information for one to become a member—i.e., username, email address, and a password. So the risk of having your account hacked or stolen will yield little personally identifiable information. If you choose to become a “creator” as a means of earning income from your video posts, you’ll be asked for some additional banking information so that payments can be made to you.

The Bottom Line

TikTok is a wildly popular app for streaming short-form videos on its platform. TikTok’s growth has been nothing short of spectacular over the past few years, currently at more than 1 billion active users per month. All metrics suggest that it will continue to grow quickly in the coming years.

The app is immensely popular not only among the Gen Z crowd but also with older demographic age groups, suggesting TikTok has found a formula that appeals to users of all ages. TikTok is still a privately held company, owned by ByteDance, and the prospect of it going public is nowhere on the immediate horizon. In the meantime, users will have to be content with posting videos and reaping followers—hopefully enough to generate some side income.

Article Sources
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  1. Harvard Business Review. “The Strategy Behind TikTok’s Global Rise.”

  2. U.S. Congressional Research Service. “TikTok: Technology Overview and Issues,” Summary Page (Page 2 of PDF).

  3. TikTok Newsroom. “Delivering on Our US Data Governance.”

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  5. EqualOcean. “A Late Starter, ByteDance Begins to Accelerate Its Effort in Healthcare.”

  6. Forbes. “TikTok, Hospitals and Tutoring Apps: The Many Tentacles of Chinese Tech Giant ByteDance.”

  7. Bloomberg. “ByteDance Pays $1.5 Billion for China Hospital Chain in Health Foray.”

  8. About Amazon. “Amazon and One Medical Sign an Agreement for Amazon to Acquire One Medical.”

  9. The Washington Post. “Chinese Government Acquires Stake in Domestic Unit of TikTok Owner ByteDance in Another Sign of Tech Crackdown.”

  10. TikTok Support. “Who Is Eligible?

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  14. DataReportal. “TikTok Statistics and Trends.”

  15. TikTok Newsroom. “Thanks a Billion!

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  19. ByteDance. “Our Products.”

  20. TikTok Support. “Tip a Creator on TikTok.”

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