Ophelia Nichols, also known as “shoelover99” on TikTok, is one of many online creators and influencers whose livelihoods have been unexpectedly disrupted.
Nichols, who lives in Alabama, has over 12.5 million TikTok followers. She uses the app to create lifestyle content and deliver rants in her heavy Southern accent. Her posts can receive millions of views, and she generates the majority of her money from promotional relationships with firms such as Home Chef.
But with this week’s legislative moves in Washington, D.C., Nichols is unsure what will happen next.
On Wednesday, President Joe Biden signed legislation requiring TikTok to divest from its Chinese parent company, ByteDance. If ByteDance does not sell TikTok, the app may risk a ban in the United States. The proposal cleared the Senate on Tuesday, along with a package of billions of dollars in aid for Israel, Ukraine, and Taiwan.
“TikTok allows small businesses and creators to find people in their community,” Nichols told CNBC before the measure was signed. “It allows everyone to provide for their families in ways they may not have done before. “It has altered people’s lives.”
TikTok has pledged to challenge the ban in court, which may take years. But in the meanwhile, there is a great deal of ambiguity.
According to a TikTok-funded Oxford Economics study, small and medium-sized enterprises using TikTok would sustain 224,000 jobs in 2023. According to the report, these enterprises generated roughly $15 billion in revenue and contributed $24.2 billion to the United States’ gross domestic product by 2023.
Nichols traveled to the Capitol with many other TikTok producers to voice their opposition to a potential ban. She wanted to speak out against it and explain to lawmakers how she operates her business with the app. Nichols claimed TikTok did not invite her to join the protest.
“You’re taking away our First Amendment rights,” Nichols remarked. “People do not comprehend. This is a community. It is a family. Whatever you enjoy or find amusing, you will find someone on the app who shares your interests.”
According to the March CNBC All-America Economic Survey, nearly half (47%) of participants favored a ban or a sale, while slightly more than 30% opposed a ban.
Over 585,000 postings protesting the ban have been made on TikTok, with the majority of them featuring videos with the hashtags #KeepTikTok and #SaveTikTok. Many testimonials highlight TikTok’s importance in delivering online amusement, while others plead for the platform’s continued existence, claiming it is critical to their livelihoods.
The initiative derives from ByteDance’s $7 million marketing campaign to rally American opposition to the ban. Tactics ranged from emotive testimonial movies featuring TikTok CEO Shou Zi Chew to in-app advertisements encouraging users to contact their senator.
TikTok declared the bill unlawful after Biden signed it on Wednesday, stating that it would challenge it in court.
“We believe the facts and the law are clearly on our side, and we will ultimately prevail,” the corporation wrote in a post on X. “This ban would devastate seven million businesses and silence 170 million Americans.”
Lawmakers have long maintained that TikTok poses a national security threat to the United States, claiming that the Chinese government may exploit the app’s data to spy on American users and propagate misinformation and conspiracy theories.
‘You can still go forward.’
Sen. Markwayne Mullin, R-Okla., told CNBC’s “Last Call” on Tuesday that the proposal is not a prohibition, but rather a necessity for TikTok to split itself from ByteDance.
“You can still keep the platform, you can still move forward,” he remarked. “But the Chinese Communist Party is using the algorithm, which they developed, for ByteDance, for TikTok, and the servers that they use to be able to push out their propaganda.”
TikTok producers and influencers, who are not involved in politics, are concerned about something else.
Many app users have struggled to reach equivalent audiences on other channels. Creators claim that each platform has a unique audience and interests, and TikTok’s algorithm makes it simpler for their videos to be discovered by a bigger audience.
“People say, ‘If we shut down TikTok, they’ll go follow you on Meta,’ which is not true,” said V Spehar, host of “Under the Desk News,” a short-form news show with over 3 million TikTok followers, in an interview with CNBC. “And this is not true for many people. Otherwise, we would.
TikTok offers a variety of income options, including its Creativity Program, which rewards popular films that last more than a minute. Additionally, producers can earn money through brand collaborations and affiliate sales via the TikTok Shop, as well as receive virtual “gifts” from followers during livestreams.
Competing platforms have attempted to encourage people to share their short-form videos on their services. Last year, YouTube Shorts revamped its monetization strategy, allowing users 45% of ad revenue across numerous posts. However, consumers reported that the payments were lower than those for longer-form videos.
“The culture of each platform is different,” explained Spehar. “The discoverability algorithm differs. The saturation is different. Trying to get into YouTube is really difficult because the market is so saturated.”
Other areas have also become more difficult. Last year, Meta discontinued its Instagram and Facebook short-form video creator compensation program. Creators have claimed that they aren’t making anything despite garnering hundreds of thousands of views on the app. However, Instagram CEO Adam Mosseri stated that the program might return in 2024.
Tony Youn, a plastic surgeon with 8.4 million TikTok followers, stated that reaching a large audience is challenging. His movies on topics ranging from weight reduction and plastic surgery to amusing traffic clips have received hundreds of thousands of views.
“I have purposely diversified just because it’s something, as a business person, I know you have to do,” Youn went on to say. “But not everybody has done that.”
Youn stated that part of his dissatisfaction with the TikTok law stems from the fact that “people who have much smaller voices than myself who are going to get really hurt by this if this happens.”
