This article was published on May 5, 2022

TikTok is eating Netflix’s lunch — and that’s great for startups

An argument for approaching TikTok as streaming, not social

TikTok is eating Netflix’s lunch — and that’s great for startups Image by: "Man Filming Himself while Doing a Water Bottle Challenge", presumably for TikTok

TikTok’s unmatched algorithm and incomparable reach make the platform a no-brainer for founders and entrepreneurs.

The only question is: how best to approach it, from a content strategy and creation perspective?

Consider what Professor Scott Galloway said in a recent episode of Pivot: “We’ve gotta stop thinking of TikTok as a social media platform. It’s basically streaming, without a content budget. What would Netflix be worth if it didn’t have to spend $17 billion a year on content?”

It’s an interesting thought — one that made me realize since I canceled my Netflix subscription, my time spent on TikTok has escalated exponentially.

Correlation is not causation

The <3 of EU tech

The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!

Have you heard the one about how, when the iPhone was invented, chewing gum sales plummeted, and haven’t since recovered since?

Allegedly, this is because people started looking at their phones while waiting in line at the cashier, instead of taking inat all the delicious chewing gum on offer.

Of course, this could well be a correlation, rather than causation (I did learn this ‘fact’ on TikTok after all), but it does raise an interesting point.

As Scott puts it: “The company that’s feeding off Netflix’s carcass now commands more attention than Facebook and Instagram combined — but has a content budget of $0, versus $17 billion at Netflix — and it’s TikTok.”

(I wonder if Reed Hastings still thinks Netflix’s biggest competitor is sleep?)

What the numbers say about TikTok’s growth

“The company that’s increased more in value than any [other] in the world over the last 12 months?” Prof Galloway insists it’s TikTok.

But is he right?

While clocking only $4.6 billion annual revenue in 2021 compared to Meta’s $117.9 billion, TikTok has shown unprecedented growth since its launch in 2017.

TechCrunch reported in January on TikTok’s explosive 325% growth in 2020, saying the monthly time spent per user also increased faster than any other app — notably, by 65% in the US alone, far outperforming Facebook.

TikTok was the world’s most downloaded app in both 2020 and 2021.

And if you think that’s because you keep deleting and reinstalling it, that’s not it: it reached one billion users by the end of Q2 2021, setting a new growth record for non pre-installed apps; and is expected to reach 1.5 billion by the end of 2022.

Plus, the fact that their stock isn’t public has, thus far, sheltered it from the scrutiny faced by Meta and friends.

As Galloway observes: “It’s also managed to avoid some of the shitshow that is Facebook; and it does have – at least the perception of — increased moderation.”

Whatever your personal opinion on the platform, two things are demonstrably true: TikTok is winning the war for our attention, and Netflix needs to make some changes — but that doesn’t mean the two are connected.

TikTok as a streaming service — a helpful lens for startup marketing

The numbers don’t lie.

If you’ve found product market fit with a segment anywhere between the ages of 18 and 80, you — and whatever you’re selling — should be on TikTok.

SensorTower reported that TikTok users spent $2.3 billion dollars in the app in 2021, compared to $1.3 billion the year before.

And Scott’s right: many brands and influencers are approaching it more like a streaming service than a social media platform — particularly since February, when TikTok increased its video time limit from three to 10 minutes.

Consider this 4-minute-long TikTok from Amsterdam’s Rijksmuseum.

It begins with the infamous clip of Kim Kardashian screaming at Kourtney, and transitions into a full-on art history lecture on the similarities and differences between reality television and the 16th- to 17th-century “Daily Life Paintings” of Steen and Vermeer — both of whom, of course, are viewable at the museum.

Startup founders and CEOs like Evan Van Auken and Terrance McMahon have leveraged the unparalleled power of TikTok’s infamous algorithm and are streaming their lessons in entrepreneurship and remote work for audiences numbering in the hundreds of thousands.

How to approach TikTok as a founder or entrepreneur

Auken and eight other “trailblazing TikTok entrepreneurs” shared their advice in this great story by 99designs, and a lot of their tips for founders on TikTok echoes Scott’s view of the platform as a streaming platform, rather than social media.

According to the article, it’s crucial that you:

  • create original, authentic content (as opposed to repurposing);
  • understand the importance of good lighting (as well as a good mic); and
  • always use a hook in the beginning (with bonus points for a cliffhanger at the end).

If you’re a founder debating whether or not to make your TikTok debut, maybe it’s helpful to do what Uncle Scott says.

Start thinking about TikTok not as social media, but rather, as your personal or startup brand’s free streaming service.

In many ways, this is merely an extension of what we’ve known for years: no two social media platforms are the same — and treating them as such is a recipe for disaster.

The only difference here is that TikTok has taken this trend even further. And the first step in mastering the platform? Well, it’s understanding it.

Get the TNW newsletter

Get the most important tech news in your inbox each week.

Also tagged with