ByteDance, the owner of the TikTok video service, earned more than $17 billion in revenue and more than $3 billion in net profit last year, Bloomberg reports. Last year’s revenue is more than double that of 2018, when the company earned about $7.4 billion. Sources wanted to remain anonymous, as financial details are not public.
By comparison, Instagram, a subsidiary of Facebook, generated around $20 billion in advertising revenue in 2019, Bloomberg reports. Google said its YouTube video division earned $15.1 billion in advertising last year.
ByteDance’s app audience is around 1.5 billion monthly active users. The flagship service, of course, can be considered the TikTok short video platform and its Chinese version called Douyin, as well as the Toutiao news service. This month, the company lured Disney’s top manager Kevin Mayer to the post of CEO (and, at the same time, COO).
In the American media holding, Mayer led the direction of streaming and international operations. It was under his leadership that the company launched the Disney + service last fall, which has so far gained over 50 million subscribers. Moreover, Mayer was seen as a potential successor to Disney CEO Bob Iger. However, in February, after Iger’s sudden departure, the company was headed by another top manager, Bob Chapek.
The popularity of the Chinese application with short videos, which has become a cultural phenomenon, cannot but worry American competitors. Over the past two years, the service’s audience has grown by more than 125%, and over the past 12 months, the application has been downloaded from the App Store and Google Play 842 million times. According to rumors, Google-owned YouTube is already developing a similar application with a short video feed.
At the same time, the Chinese company was successful despite the fact that US lawmakers periodically attack TikTok and express concern about privacy and censorship. Earlier, members of the US Congress expressed concerns that the growing influence of TikTok poses a threat to national security. Including, due to the fact that the application can share data with its owner – Chinese Bytedance.
ByteDance is expanding its operations into new areas, including e-commerce and games. This year, it began actively recruiting employees and plans to create 40,000 new jobs in 2020, hoping to match the size of the e-commerce giant Alibaba Group Holding, while technology corporations around the world are cutting staff.
ByteDance held preliminary talks on an initial public offering of shares last year, but is in no hurry to go public, given its financial performance, agency sources say. According to informants, the company currently has more than 6 billion dollars in cache.
Bytedance, which is supported by SoftBank Group, General Atlantic and Sequoia, is already the most valuable startup in the world, according to researchers at CB Insights. Anonymous Bloomberg sources said that recently there have been several transactions to sell shares in the company. In the course of some of them, it was estimated at 140 billion dollars.
Recently, TikTok and its Chinese version of Douyin took first place in revenue from in-app purchases in April, according to Sensor Tower. For a month, the short video service showed a tenfold increase in revenue, reaching $78 million. This is more than YouTube, Tinder and Netflix, which earn on paid subscriptions.
The Chinese market, where the app is known under the local Douyin brand, accounts for 86.6% of revenue, followed by the United States with 8.2%.
In any version of the video application, it is possible to buy internal “currency”, which can be spent on supporting authors that you like. At the same time, neither TikTok nor Douyin entered the top 10 in terms of volume of purchases within the application on Google Play, but took first place among the App Store applications.
YouTube took second place in the ranking – revenue from in-app purchases amounted to almost $76 million, an increase of 57% compared to April last year. Most of the revenue comes from the United States and Japan. Next up are Tinder, Disney Plus and Tencent Video.
Like many other social media platforms, ByteDance is trying its hand at online commerce, despite continuing to rely on advertising as its primary source of revenue. The research company Emarketer predicts that more than 75 million American users of social networks aged 14 years and older will make at least one purchase within social applications in 2020, which is 17.3% more than in 2019.
In the first quarter of 2020, TikTok and Douyin downloaded 315 million times around the world, compared to 187 million last year, Sensor Tower analysts write, noting the positive impact of COVID-19 on the popularity of video sharing applications.