With President Trump’s Aug. 6 executive order banning social media video app TikTok in the United States set to go into effect today (Sept. 27), a federal court judge in Washington D.C. has reportedly approved a preliminary injunction blocking the order.
TikTok owner, Chinese-based ByteDance, Sept. 23 filed for an expedited preliminary injunction against Trump’s executive order, calling it politically motivated and lacking in merit. The Trump Administration, which is involved in ongoing trade and ethnic Muslim disputes with China, argued the TikTok app posed a threat to national security. TikTok reportedly has more than 100 million U.S. users on a monthly basis.
U.S. District Court Judge Carl Nichols, who was appointed to the bench by Trump in 2019, reportedly felt TikTok had not been given the proper time to defend itself in court.
“This was a largely unilateral decision with very little opportunity for plaintiffs to be heard,” said the judge as reported by the Washington Post.
Trump had initially given his public approval (in a North Carolina campaign rally) for a proposed TikTok asset sale to Oracle and Walmart. But when it was revealed that Oracle and Walmart would collectively own just 20% of new entity TikTok Global, with China controlling 80%, Trump changed his mind.
This is the second legal setback for Trump, who saw a second executive order banning China’s WeChat app overruled by a San Francisco federal magistrate, which cited First Amendment issues in ruling against the president.
ByteDance, the Chinese owner of social video platform TikTok, has filed for a preliminary injunction against the Trump Administration’s executive order banning U.S. access to the app, effective on Sept. 27. About 100 million Americans use TikTok on a monthly basis.
The request, filed Sept. 23 in the District Court for the District of Columbia, seeks to stop a DOJ mandate ordering Google and Apple to remove the TikTok app from their platforms on Sunday — in addition to ceasing to provide updates for current holders of the app.
ByteDance is currently in negotiations with Oracle and Walmart to sell 20% (for $20 billion) of a new corporate entity called TikTok Global. Trump last weekend publicly gave his approval of deal — until he found out the Chinese would still own 80% of the company. Oracle reportedly said the sale would preclude ByteDance from owning the TikTok app outright.
Regardless, the Chinese government would have to approve of any deal, which seems increasingly unlikely following reports in the government-owned English newspaper, China Times, which called the transaction “dirty and unfair,” and based on “bullying and corruption.”
The Trump Administration, which eyes TikTok as a threat to national security, continues to engage in a war of words with China over trade and technology.
ByteDance says the security fears are overblown and political in nature.
“There is simply no genuine emergency here that would justify the government’s precipitous actions,” read the filing. “And there is no plausible reason to insist the prohibitions be enforced immediately.”
President Trump has big plans for TikTok, the Chinese-owned social media app and video platform currently in sale talks with Oracle — and Walmart.
Speaking Sept. 19 at a rally in Fayetteville, North Carolina, Trump said the proposed executive order banning TikTok in the United States had been delayed a week so the reported $20 billion sale of TikTok in the U.S. by parent ByteDance to Oracle and Walmart could be finalized. The retail behemoth had previously been associated with a joint bid with Microsoft that had been rejected. TikTok has about 100 million users in the U.S.
Under the proposed deal reported by CNN Business, which needs to be approved by Chinese regulators, TikTok would relocate its headquarters to Texas, hiring 25,000 workers in the process. More importantly, TikTok would store user data on Oracle servers rather than on the current Chinese-based servers — which had prompted initial concerns by the Trump Administration over cyber and national security.
“I’ve given the deal my blessing,” Trump said. “If it gets done, that’s great. If they don’t that’s okay, too.”
It’s been reported that Trump is seeking $5 billion from the “TikTok Global” transaction to help fund an educational project the president claims “can educate people as to real history of our country — the real history, not the fake history.”
Both Oracle and Walmart — as publicly-held companies — are not legally obligated to fund Trump’s educational project.
Trump is proposing the fund in response to the “1619 Project,” which was started by The New York Times in 2019 on the 400th anniversary of slavery in the United States. The project aims to put consequences of slavery and contributions of black Americans as its main theme.
Trump previously tweeted that planned rollout of the “1619 Project” in public schools in California would not be supported by the federal government.
“Department of Education is looking at this,” Trump tweeted earlier this month. “If so, they will not be funded.”
Following months of threats, the U.S. Department of Commerce Sept. 18 announced it would suspend domestic access to Chinese-owned apps TikTok and WeChat beginning Sept. 20. The apps are collectively used by about 100 million Americans for social media videos and communications.
The Trump Administration contends the apps pose a national security threat by accessing U.S. users’ personal data that is stored on Chinese servers and accessed by Chinese security personnel, including the military.
“Today’s actions prove once again that President Trump will do everything in his power to guarantee our national security and protect Americans from the threats of the Chinese Communist Party,” Commerce Secretary Wilbur Ross said in a statement.
Specifically, rollout of Trump’s previously-announced executive orders will restrict the transfer or processing of payments through the WeChat network. It would also bar third-party U.S. firms from offering ISP or peering access to WeChat.
“At the President’s direction, we have taken significant action to combat China’s malicious collection of American citizens’ personal data, while promoting our national values, democratic rules-based norms, and aggressive enforcement of U.S. laws and regulations,” Ross said.
With TikTok operations in the U.S. set to be acquired by Oracle, formal restrictions on the social media app’s use domestically won’t go into effect until Nov. 12. As a result, the only immediate change to TikTok in the U.S. after Sept. 20 is user access to updated app features and maintenance.
The mining of user information across digital apps is not unique to TikTok or WeChat. It is common practice for most digital firms, including Google and Facebook. But those two companies are American and thus not subject to Trump’s ongoing trade spat with China.
Some observers contend Trump’s targeting of TikTok is personal, stemming in part to media reports the app — through third parties — was responsible for the lower-than-expected turnout at Trump’s June campaign rally in Tulsa, Okla.
“A lot of [this ban] just feels to me to be improvisational,” Adam Segal, a cybersecurity official at the Council on Foreign Relations, told The New York Times.
ByteDance, the Chinese owner of social media video app TikTok, has reportedly selected Oracle Corp. to acquire its U.S. operations as a “trusted tech partner.” The deal, which must be approved by U.S. and Chinese regulators, amounts to a high-priced partnership rather than outright asset sale, according to media reports.
Beijing-based ByteDance had previously rejected a joint offer by Microsoft and Walmart, Microsoft disclosed in a Sept. 13 blog post. The amount of the software and retail giants’ bid has not been disclosed. The offer by Oracle reportedly hovers around $20 billion.
“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” the software giant wrote. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”
TikTok has emerged into a social media phenomenon during the coronavirus pandemic generating upwards of 100 million users monthly watching both self-generated and third-party videos. It has also come into the crosshairs of the Trump Administration, which considers the app a national security threat, among other concerns. Trump has warned the government would ban the app in the U.S. by Sept. 15 unless it was sold to an American company.
Specifically, the National Security Agency and United States Cyber Command claim that Chinese control of TikTok’s computer code could influence distribution of propaganda and politically-motivated content to end-users.
Microsoft said it would have made the required security, privacy and online safety adjustments to appease both federal and Chinese regulators. The Xbox manufacturer said it would have taken steps to prevent the spread of disinformation on the app — something it made clear to ByteDance.
“We look forward to seeing how the service evolves in these important areas,” Microsoft wrote.
Whether Oracle founder Larry Ellison’s personal relationship with Trump played a factor in the deal remains to be seen. Ellison has hosted a fundraiser for Trump, and Oracle CEO Safra Catz worked on Trump’s transition team in 2016.
Walmart has reportedly joined Microsoft in the ongoing bidding for TikTok, the Chinese-owned social media app with more than 100 million monthly users in the United States and 800 million globally.
TikTok, whose CEO Kevin Mayer resigned earlier in the day, has been caught in the crosshairs of the Trump Administration’s growing tech spat with China. Trump issued an executive order that seeks to ban TikTok in the U.S. if its Chinese ownership isn’t removed — citing national security issues.
Walmart confirmed to CNBC it has joined Microsoft in bidding that could fetch upwards of $20 billion for the app. Oracle reportedly is also interested in TikTok.
Walmart spokesperson Randy Hargroves (formerly with Blockbuster) wouldn’t comment how the retailer and Microsoft would split ownership of TikTok, or whether the retail behemoth would incorporate the app (and its user-generated videos) in its pending subscription-based Walmart+ streaming platform.
“We believe a potential relationship with TikTok, in partnership with Microsoft, could provide Walmart with an important way … to reach and serve omnichannel customers as well as grow our third-party marketplace and advertising businesses,” Hargroves said. “We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators.”
Walmart has dabbled in entertainment tech before, acquiring transactional movie platform Vudu.com for $100 million, and becoming the first retailer to offer digital codes for studio DVD and Blu-ray Disc movies. The retail behemoth recently sold Vudu (which had absorbed the disc-to-digital business) to Fandango.
Daniel Ives, managing director and technology analyst at Wedbush Securities, believes TikTok would be good for for Walmart’s e-commerce business.
“When you think right now about going up against the 800-pound gorilla, Amazon, obviously [Walmart has] been behind the eight ball, Ives told CNBC. “But Walmart could use this as a golden opportunity to partner with Microsoft and monetize the TikTok base, which could start to rival Instagram in the next few years just given its global presence.”
“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer said in an letter to staff disclosed to the media. “Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company.”
“We appreciate that the political dynamics of the last few months have significantly changed what the scope of Kevin’s role would be going forward, and fully respect his decision,” TikTok said in a statement regarding Mayer’s decision.
Venessa Pappas, GM of U.S. operations, will head TikTok on an interim basis.
TikTok, which has become a social media phenomenon (100 million monthly users in the U.S.) offering short-form video selfies and related user-generated content, has been under attack by the Trump Administration, including a recent executive seeking to ban the app in the United States unless it is sold. The app this month surpassed 2 billion global downloads.
The federal government contends the app is a security threat because its collects data on users, which “threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information,” according to the executive order.
ByteDance reportedly is looking to move TikTok’s servers out of China in addition to selling the app. Interested parties include Microsoft and Oracle.
Regardless, Mayer wanted no part of pending changes at TikTok.
“The role that I signed up for — including running TikTok globally -— will look very different as a result of the U.S. Administration’s action to push for a sell off of the U.S. business,” Mayer wrote. “I’ve always been globally focused in my work, and leading a global team that includes TikTok U.S. was a big draw for me.”
Despite declines in viewership, linear television remains the dominant form of TV viewing for consumers across the United States and other major economies, according to data from Omdia.
Linear TV accounted for 63% of television viewing in the U.S. in 2019, compared with 16% for long-form viewing and 12% for DVR time-shifted content. Linear TVs’ share of viewing declined from 67% in 2018. Similar trends occurred in most of the other countries tracked by Omdia. The report covered TV viewership trends in the United States, Australia, the Netherlands, Spain, Italy, Germany, France and the United Kingdom.
Average linear TV viewing time declined in all but one market, with decreases ranging from four minutes in Italy to 19 minutes in the U.S. The Netherlands was the only market to not see a decline in linear viewing, remaining unchanged from last year.
“Although traditional linear television viewing is undergoing a broad-based decline, this form of entertainment remains central to most people’s viewing habits,” analyst Rob Moyser said in a statement. “As a result, linear still accounts for the majority of viewing in all countries tracked. In some countries, linear still strongly dominates viewing, totaling 90% in Italy, for example.”
On the non-linear front, online long-form video is the main platform driving growth in 2019. Online long-form was a key area of growth across all markets, driven largely by online subscription video services such as Netflix and Amazon Prime Video. Growth of online long-form video content in 2019 ranged from 55% in Australia to 10% in the Netherlands.
Growth in over-the-top subscribers, D2C launches, and a rise in connected TV and pay-TV partnerships are fueling the increase in online, long-term video viewing.
However, the fastest-growing segment of the non-linear view market is social media. Social media viewing across the countries tracked increased by 10 minutes in 2019, a growth rate that surpassed all other forms of non-linear television video. The U.S. led social media viewing, with 49.3 minutes in 2019. The advance of social media was partly propelled by the massive growth of Chinese video-sharing service TikTok.
“TikTok’s success was one of the breakout stories of 2019, with the social media app growing at historic rates,” Moyser said. “This rate of increase was so huge it quickly became the most popular social media platform for video viewing in Germany and the second most popular app in three other northern European countries: The United Kingdom, France and the Netherlands.”
Time spent viewing video content on social media platforms increased by 10 minutes in 2019 to an average of 41 minutes per-person per-day across the eight markets analyzed. In comparison, all other forms of non-linear viewing increased by a cumulative of seven minutes over the year.
Other developments noted by the report include:
Average total daily viewing time for the markets analyzed rose to 306 minutes per-person, per-day in 2019, an increase of four minutes year-on-year.
TV viewing saw a massive rise in consumption in March and April 2020 following the implementation of lockdown measures across the countries covered. Italy had the highest total for viewing time in Europe in March at five hours and 46 minutes.
Italians spent 346 minutes a day in front of the TV screen in March 2020, an increase of 34.1 percent on the same period last year, the highest total for viewing time in Europe.
Paramount’s Sonic the Hedgehog is the big hit of the coronavirus pandemic.
The animated feature is one of a handful of high-profile titles that received an early digital release, at a premium price, at the end of March.
It was subsequently released through traditional digital channels, as well as Blu-ray Disc and DVD, and has held onto the top spot on the weekly physical media sales charts, published by NPD VideoScan, for five weeks.
One of the more interesting aspects of Paramount’s marketing campaign for the film, based on the popular video game franchise, was an app that, through augmented reality technology, allowed users to create their own videos with characters and other elements from the film, and then post the results on social media.
The result was a flurry of TikTok videos in which fans appeared to “dance” or otherwise interact with Sonic — including one, with more than 125,000 likes, in which Sonic keeps appearing on a girl gamer’s Fortnite screen until she finally says, “All right, Sonic, you win — I’ll watch your movie.” In all, the campaign reached tens of millions of consumers in the United States in a few short weeks.
The augmented reality (AR) component of the Sonic campaign is the work of a company called Fuseit, whose patented AR platform specializes in brand content creation.
Partnering with clients that range from Coca-Cola to Old Spice/Procter & Gamble to the major Hollywood studios, the company’s AR technology lets anyone create a professional-looking video with whatever image or icon the client brand chooses — all in real-time, with just one click.
Fuseit was launched in 2017 by Liat Sade-Sternberg, an Israeli businesswoman and entrepreneur who now lives in Los Angeles. Prior to launching the company, Sade-Sternberg was the first Israeli woman to win MIDEMLAB, the leading startup competition of the music industry. She also served as the VP of sales and marketing at Babylon, an Israeli public company that provides translation software.
“The concept behind Fuseit is to utilize content in innovative new ways to significantly increase consumer awareness and fan engagement with brands, and generate a solid ROI,” Sade-Sternberg says. “While current consumer engagement on social platforms has sagged to 1% or less, we understand that advertisement methods must change, and augmented reality can boost advertiser results 50% or more while they gain a deeper engagement with their consumers/fans.”
Fuseit’s AR technology has been previously utilized by Warner Bros. to promote the theatrical releases of The Lego Movie 2: The Second Part and Godzilla: King of the Monsters.
“It really comes from an understanding that marketing and social media have changed, and will continue to change, rapidly, and so much of the advertising is really not working,” Sade-Sternberg says. “Marketers are spending more and more money on Facebook and Instagram and other social platforms, but they’re getting less and less impactful results than they used to. Consumers desire real engagement. These days, when brands are boycotting Facebook ads, adopting digital innovations such as Fuseit is more important than ever.”
She also believes Fuseit’s technology is more relevant than ever during the COVID-19 pandemic since shelter-at-home orders, business closures and event cancellations have led to a steep decline in live engagement opportunities.
“If you want to really engage with your customers, and with your fans now,” Sade-Sternberg said, “the only way to do it is through augmented reality. Now you can meet consumers in their homes and on their social feeds, and do it fast, easily and cost-effectively utilizing the content the brands already have.”
In a surprise move, Kevin Mayer, chairman of Disney’s direct-to-consumer & International unit, is leaving to become COO of the corporate parent of Chinese-owned social media platform TikTok, effective June 1.
Mayer, who has spent 25 years at Disney, will report directly to Yiming Zhang, founder/CEO of ByteDance. He will be charged with driving the global development at ByteDance, as well as overseeing corporate functions, including corporate development, sales, marketing, public affairs, security, moderation, and legal.
In his role as COO, Mayer will lead music, gaming, Helo, emerging businesses, and will also serve as CEO of TikTok, leading the rapidly growing platform as it continues to build its global community of creators, users, and brands.
“Kevin’s wealth of experience building successful global businesses makes him an outstanding fit for our mission of inspiring creativity for users globally,” Zhang said in a statement.
As chairman of Disney’s revamped home entertainment unit, consumer products and international business, Mayer oversaw rollout of Disney+, the company’s flagship subscription streaming video service. Additionally, Mayer led the company’s other direct-to-consumer businesses, including Hulu, ESPN+, and India’s Hotstar, as well as overseeing Disney’s international operations, global ad sales, and global content sales.
“Like everyone else, I’ve been impressed watching [ByteDance] build something incredibly rare in TikTok — a creative, positive online global community,” Mayer said.
The executive said he is grateful to Bob Iger for his visionary leadership and mentorship over many years, and Bob Chapek, whom Mayer said he greatly admires.
Alex Zhu, the current president of TikTok, will transition to ByteDance VP of product and strategy, where he will focus on his primary passion overseeing strategy and product design.
Kelly Zhang and Lidong Zhang will continue to lead the business as CEO and Chairman of ByteDance China, respectively, reporting to Yiming Zhang, as ByteDance’s global CEO. They manage a range of products, including Douyin, Toutiao, and Xigua, in addition to their duties leading the business and operational teams in China.
In the management restructuring, TikTok said its national and regional management leaders would remain in their roles with their current responsibilities, reporting to Mayer.