I think there’s a really low chance of TikTok getting banned.
Why?
It’s no secret that corporations run America — and too many of them are tied in with ByteDance (TikTok’s parent company) for the politicians to shut it down.
However….
That’s not what I’m here to talk with you about today.
I want to shed some light on the immense impact TikTok has had on sports (and the creator economy).
Let’s Dive In 👇
TikTok’s Impact
Short-form video has impacted the entire world in ways we can’t even imagine (both good and bad).
When TikTok burst into the U.S. media landscape in 2020, it was unclear how its content format would be received.
It is now EXTREMELY clear…
TikTok created the greatest social media algorithm ever created.
With over 1 billion monthly users — the platform continues to grow in teen mindshare.
YouTube, Instagram, Pinterest, and Snapchat have all experimented with the right implementation of short-form videos.
Check this out…
When Buzzfeed conducted layoffs in December of 2022, their CEO wrote a letter to employees,
“Our revenues are being impacted by a combination of worsening macroeconomic conditions, and the ongoing audience shift to vertical video, which is still developing from a monetization standpoint.”
Content shifts come fast (and are worth being prepared for). This applies to individuals, companies, leagues, teams, etc.
Sports and TikTok
The most obvious impact of sports and TikTok is that it shortens games.
What do I mean by that?
Nearly half of TikTok users said they use it to watch game highlights.
The key to success is “making fans feel like insiders” — that relates to individuals and companies.
Just ask the Savannah Bananas.
The Bananas’ motto is “Fans first, entertain always”.
Owner Jesse Cole urges his content manager to ask two questions before posting:
- Does this make baseball more fun?
- Is it shareable with friends?
As brands continue to get smarter, so does the amount of time users are spending on the app.
The need to always be putting on a show is creating “entertainment sports“.
I am worried about the mental health effects of this — but that’s a convo for another day.
Rise of the Leveraged Creator
There’s no such thing as “mainstream media” anymore.
Instead, there is “legacy media” & “alternative media“.
This graph is extremely telling of the trend:
When it comes to new media — faces & personalities are outranking brands.
Why is this?
Traditional marketing started in the 1500s, — however, human facial recognition dates millions of years (which is why there’s such a power law for individual creators).
This trend has been replicated across cultures. Lebron James has more followers than the NBA, NFL, and MLB combined.
Marketer George Mack predicted on his Twitter account the other day…
That the biggest marketing competitors to Coca-Cola & McDonald’s will be creator brands.
His reasoning:
- It’s harder to build a Mr. Beast audience than it is to create a burger
- There’s no moat — so whoever has the best advertising wins
- Individual creators can acquire customers cheaper
One downfall I’m paying to…
The rise of negative media since 2010 — which is when the media massively increased headlines that use fear, anger, disgust, and sadness.
It’s no surprise the media themselves isn’t covering this.
I’m curious to see what happens with TikTok, but nonetheless…
The rise of short-form content will forever impact sports (whether it’s through TikTok, YouTube, IG, or an entirely new platform).
Takeaways of Short-Form Content
Via Isos Capital, which recently launched a $750M sports fund.
1. Platforms Prioritize Growth
Direct monetization on these formats continues to be fairly minimal.
All the platforms are in a fight for growth and are keeping ad load low to encourage users to stick around longer.
CPMs will likely remain low for the immediate future, positioning this format as great at the top of the monetization funnel.
2. Power Laws of Distribution
While all media formats are beholden to attention power laws, we think there is a chance that short-form is significantly different from previous paradigms.
Superstars will still be superstars, but you used to rely on B or C-level content to gather attention.
Because the format means that a greater volume of content is consumed per session, holding a consumer’s attention repeatedly may require your A-tier stars.
3. Algorithm Discovery
Because of algorithmic distributions, suddenly fans, athletes, teams, leagues, and sponsors are all content creators at the same time.
Allowing the right people to share the right content will be a major challenge.
- If you ignore short-form, engagement will go down.
- You go all in and monetization will probably suffer.
The shifting content paradigm signals an exciting opportunity for media companies to get creative and capitalize on the emergence of short-form video.
With creativity, strategic foresight, and an understanding of the monetization challenges it presents, the potential ROIC of this format can be unlocked.
It is a brave new world of content, and those that embrace it will be the ones that succeed.
