For Netflix, brands including Disney, WarnerMedia and NBC Universal are obviously their main rivals globally. But most recently, they added another name, TikTok.
In a recent letter to investors on July 16, Netflix mentioned TikTok for the first time as a formidable competitor. What’s more interesting is that they warmly welcome the rise of this Chinese video app – something Netflix doesn’t usually do with its traditional rivals in Hollywood.
“TikTok’s growth is staggering, “the letter said.”when it shows the versatility of the internet entertainment industry. ”
Since its global launch in 2018, TikTok has become one of the most popular apps in the world. TikTok became the most downloaded app on the Apple App Store in both 2018 and 2019. Nearly half of their users are between the ages of 16 and 24 – and about 90% of their users use the app. daily. Last month, TikTok also hired Disney’s head of streaming, Kevin Mayer, to be his new CEO.
Netflix has long been a part of its earnings report to talk about potential competitors for growth. It not only shows the challenge that the company is about to face but also shows the future trends of the industry. In 2014, the company thought its main rival was traditional television (including channels like CBS and HBO). A year later, Netflix started listing Hulu and Amazon as its rival group.
Gradually, Netflix’s list of rivals continued to be extended with names like YouTube, Facebook and even video games like Fortnite. However, in their eyes, other social networking and video applications such as Instagram, Snapchat or Twitch have never been rivals.
Therefore, the inclusion of TikTok in their opponent list is a special thing. Most of the videos shared on this platform are created by users. It doesn’t follow a script like Hollywood content services at all. But the hiring of Mayer, along with its global popularity among young users, is showing it can compete directly with Netflix for access to top talent.
Even with the current situation, TikTok is competing with Netflix in taking up a large amount of entertainment time in front of the user’s screen.
The good news for Netflix is that TikTok is currently unlikely to have a deal with Hollywood when the app is banned in the US. Due to its relationship with China, the application is currently banned in India, while the US is also considering a similar ban due to concerns over security issues.
Even so, TikTok shows itself to pose an ever-increasing threat to Netflix’s ambition to be the only destination in the world for all types of entertainment. Every minute users spend on TikTok instead of watching Netflix movies on the big screen, which shows that their content consumption habits are changing.