Will the TikTok ban affect startups operating in the creator economy industry? Not exactly, say the founders news

President Joe Biden signed a bill on Wednesday that might ban TikTok — for real this time. After so many false starts and stops, some creator economy founders and their clients are rolling their eyes. They’ve been through this before.

“I think two years ago it would have been devastating,” Karat Financial co-founder and CEO Eric Wei told TechCrunch. “Now… Eh.”

When creators succeed, startups operating in the creator economy generally succeed as well. Still, Wei is not particularly concerned that the friction of the TikTok ban will impact his company, a Series B startup that gives financial services to creators.

“In startups, if you create products that help creators make money, then in terms of the market you can address, that’s good for you,” Wei said. “You might be thinking, ‘TikTok is gone, as a creator you need to think about diversification and ways to make a living, so here are the things you can do in XYZ.’”

The threat of a TikTok ban is a bit like The Boy Who Cried Wolf, although this time it’s different. This just isn’t just political theater in the type of ongoing Senate hearings. The bill, which might force ByteDance to sell TikTok if it doesn’t discover a U.S. buyer inside nine months, passed the House and Senate to Biden’s desk, where he signed it.

But the creative landscape looks different now than it did in 2020, under President Donald Trump tried to ban an application owned by the Chinese (and while running for president again, he claims that he’s against a ban because it might give Meta an excessive amount of power). Established creators have had about three years of legal wrangling and two different presidencies to organize their corporations for a world without TikTok.

As Wei looks through the large group chat he’s in with other creators, he notices that nobody has panicked.

“I’m scrolling through and there are a few jokes in there – one guy jokes, ‘My Snapchat shares are about to go up,’ and another guy said, ‘Let’s do a skit: when TikTokers protest the TikTok ban – who’s in on it?’” he said. “A third said, ‘TikTok is going to sue, I’ve talked to their employees,’ and a fourth replied, ‘Where’s my popcorn?’”

This doesn’t apply to all creators. Wei notes that broadcasters and TikTok creators who generate income through TikTok Shop may feel the effects the most because platforms like YouTube Shorts and Instagram Reels don’t invest in these features as much as TikTok. The ban may be harmful to politically-minded creators, as Instagram Reels just isn’t a viable alternative for them – the Meta-owned platform has began limiting the reach of political content. And while the more established creators in Wei’s group chat have been preparing for this for years, the move away from TikTok may very well be an enormous blow to newer creators who don’t yet have followers across multiple platforms.

“To be clear, no one is going to say, ‘It’s good for us’!” Wei said. However, the period of time the creators had to organize for this moment made them higher prepared to weather the storm.

“It’s been talked about for a very long time, so creators are aware of it – it’s not new,” Harry Gestetner, co-founder and CEO of creator monetization platform Fanfix, told TechCrunch. “Secondly, this is not an overnight ban. The creators still have about a year to move their fans, so I’m optimistic.”

James Jones – CEO Hitone other company providing financial services for creators – is the situation in parallel.

“TikTok’s absence will undoubtedly have a ripple effect among the creative community,” Jones told TechCrunch. “But creators are getting better at differentiating how they monetize across multiple platforms. We have already seen this video with Vine, and it paved the way for TikTok to fill the void it left.”

TikTok’s secret is its power to assist creators get discovered – greater than another platform, anyone can get noticed on For You. Although Instagram videos and YouTube Shorts may be in comparison with “Mark Kirkland TikTok” in 2021, these platforms have matured.

In the initial TikTok Creator Fund, a static pool of cash distributed amongst a growing variety of eligible creators, few people lived solely on TikTok views. This only recently modified when TikTok moved creators to its Creativity Program, which offers eligible creators a greater deal – but not all creators create videos that meet the program’s requirements. So for content creation to supply them with a stable profession, they might have to modify to other platforms anyway. YouTube Shorts has began sharing ad revenue on short videos, much like its long-running associates program, while Instagram Reels only offers occasional and unreliable bonus programs.

Gestetner told TechCrunch that a few of the creators he works with were dissatisfied with TikTok anyway.

“The problems with TikTok go beyond the ban itself,” he said. “Creators often have their TikTok accounts deleted, shadowbanned, or reported, making it very difficult to get a response from TikTok. That’s why we’ve been dealing with problems for years.”

It’s not that other platforms don’t share these transparency concerns. However, these threats have made it difficult for developers to place all their energy into one platform.

“Five years ago, creators typically used one platform,” he said. “Now every creator has at least three, and at most five, six or seven platforms that they use.”

The must diversify goes beyond the platforms creators use. Creators also must generate income from quite a lot of sources, whether through fan memberships, product sales, live performances, or courses.

“I think there will be no impact on our business or potentially a positive impact,” Gestetner said. “This helps in our case because all creators are skeptical of large platforms and don’t want all of their monetization to be tied to a specific platform.”

In theory, a ban on TikTok could create space in the market for an additional short-video app — perhaps one that may not owned by an enormous corporation like Meta or Google. But it probably won’t be one other situation like what happened when Elon Musk bought Twitter and several other microblogging apps appeared seemingly overnight.

“I think a really good example is: Remember Triller?” Wei said. “For a moment all of us got enthusiastic about it and thought, ‘Oh my God, TikTok is pulling out, let’s donate to Triller!’ But then everyone realized that TikTok wasn’t going away. And now, years later, is anyone talking about Triller anymore?”

Well, they won’t be talking about Triller either because the company is a walking business red flag. In any case, creators won’t have the patience to take a position in a nascent platform that will not survive, so they’ll should play catch-up on Instagram, YouTube and Snapchat. But that doesn’t suggest TikTok won’t be missed.

“I think overall the fans will feel it the most,” Gestetner said. “But I think the Short and Reels experience is getting better and better.”