Speaker 1: I want to tell you the story of a girl
Speaker 1: from Mobile, Alabama who, from a very young age, knew
Speaker 1: exactly what you wanted to do. I started writing when
Speaker 1: I was nine, but I was I wanted to be
Speaker 1: a singer, and then I realized I couldn't sing. So
Speaker 1: then when I turned to liven, I started writing wraps
Speaker 1: and I wrote my first rap. It carried on to
Speaker 1: high school and now Flow Flow Millie is most definitely here.
Speaker 1: She's a twenty one year old rapper. What was the
Speaker 1: first rap of that? Um? Do you want me to
Speaker 1: wrap it? Okay, walk up in the mall, all eyes
Speaker 1: on me, I get my swegga on with my jay's
Speaker 1: on my feet. I'm rocking this beat. Yeah, I'm rocking
Speaker 1: this beat. My swagga owner, Honey, can nobody touch me?
Speaker 1: I'm a five plus five yep, shotty, I'm a team.
Speaker 1: We made it this far, so we might as well win.
Speaker 1: Riding in my bid so you know, I'm getting paper.
Speaker 1: I'm busy stuffing on you, so I had to see
Speaker 1: you later. You know, I was like ten years old
Speaker 1: when I wrote that. Flow spent the next year is
Speaker 1: going to school and working, but making music was her
Speaker 1: primary focus. Like many artists of her generation, she posted
Speaker 1: each new song online and one of her tracks called
Speaker 1: Beef Flow Mix started trending on a platform that Flow
Speaker 1: didn't even use, TikTok. Around this time, someone high up
Speaker 1: at TikTok took an interest in Flow Millie. She came
Speaker 1: to the offices and she didn't even have a TikTok
Speaker 1: profile at the time. That's Isabel Keen Terrorists a news.
Speaker 1: She's head of music Partnerships at TikTok, and she personally
Speaker 1: sat down with Flow Millie and urged her to come
Speaker 1: onto the platform. TikTok prides itself on helping discover emerging artists.
Speaker 1: After like, you know, fift twenty minutes talking to her,
Speaker 1: I was like, you're really funny, Like you're just like
Speaker 1: a funny person and you're beautiful, and I think you
Speaker 1: would do really great on platform. I promise you once
Speaker 1: have one song go viral, your chances of going viral
Speaker 1: again increase. And that is exactly what happened. And so
Speaker 1: after that, like it just kept going up, and then
Speaker 1: on TikTok it just went crazy. Like so it was
Speaker 1: about a month after that labels was coming up, not
Speaker 1: even a month Honestly, it was like a couple of
Speaker 1: weeks and I was just flying in New York, flying everywhere.
Speaker 1: I like cash in my head to my ass, Duda Dash,
Speaker 1: can you make it go fast? The same my life
Speaker 1: one of the bands. If she keeps on lugging, and
Speaker 1: then Flo's life changed. Her fame on TikTok has given
Speaker 1: her mainstream music success. She signed on to r c
Speaker 1: A Records and the b ET Hip Hop Awards nominated
Speaker 1: her for Best New Artists. Honestly, I didn't choose this path,
Speaker 1: but I will embrace it, you know, like the fact
Speaker 1: that my music made on made it on TikTok. But
Speaker 1: I would just say that I'm just using it to
Speaker 1: my advantage. Flamilli isn't just a rapper who got her
Speaker 1: start on TikTok. Now she's a creator as well, pumping
Speaker 1: out videos and growing up following on the app. And
Speaker 1: she did amazing. She's at five hundred thousand followers, her
Speaker 1: content gets millions of views, so I think that she's
Speaker 1: very much on her way, doesn't need me as much anymore.
Speaker 1: Flow Millie was singled out as a musician who would
Speaker 1: make it on TikTok, and she's not the only one.
Speaker 1: TikTok understood that to attract hundreds of millions of users
Speaker 1: to its app, they had to keep their users happy
Speaker 1: by taking bold steps. That meant hands selecting the popular
Speaker 1: people on the app, creating paths towards fame, and funneling
Speaker 1: money to individual creators. So for the top TikTok creators
Speaker 1: and musicians, TikTok was more than a platform. It became
Speaker 1: their job. You're listening to Foundering. I'm your host, Shelley Banjo.
Speaker 1: In the first two episodes, we told you the founding
Speaker 1: story of TikTok, how two guys from China created the
Speaker 1: idea and the technology for what we now know as TikTok. First,
Speaker 1: there's Alex Jew, an eccentric guy from Shanghai who is
Speaker 1: obsessed with design and understanding how teenagers behaved online. He
Speaker 1: created Musically, which was folded into TikTok. And then there's
Speaker 1: John gi Ming, the CEO of by Dance, TikTok's parent company.
Speaker 1: Eming secret Weapons are advanced AI algorithms that taylor videos
Speaker 1: to each individual while also gathering enormous amounts of data.
Speaker 1: In this episode, we'll explain how Alex and e Ming
Speaker 1: were able to plot a path for TikTok that would
Speaker 1: not only change the world of social media, but also
Speaker 1: upend pop culture, music, and the economics of fame. Suddenly,
Speaker 1: this app from China that many people had never heard
Speaker 1: of was determining multiple facets of American culture, who gets
Speaker 1: to be famous, which music ss will hit it big,
Speaker 1: and what trends are people talking about. By harnessing its
Speaker 1: newfound popularity and influence, TikTok's Chinese parent company, Bye Dance
Speaker 1: made even more money and became the first Chinese company
Speaker 1: to successfully create a truly global consumer app. We'll tell
Speaker 1: you more after a quick break. TikTok was coming up
Speaker 1: in the US right when an app called Fine was
Speaker 1: falling apart. Vine was the original short video app. It
Speaker 1: played six second videos over and over again on a loop.
Speaker 1: We in his speech for a get abrazon Fleek question.
Speaker 1: And even though the memes launched on Vine, levon Vine
Speaker 1: is remembered as a failure because after Twitter bought Vine,
Speaker 1: they completely squandered its success. Someone said Vine walked so
Speaker 1: TikTok could run, And I think that is a really accurate,
Speaker 1: uh analogy. That's Karen Spencer. She used to work at
Speaker 1: Twitter as Vine's head of creator development. Karen says that
Speaker 1: a handful of Vine stars got pretty famous and that
Speaker 1: became a problem for Vine because the creators wanted something
Speaker 1: that Vine just wasn't willing to give them money. There
Speaker 1: were a lot of conversations had between creators and myself
Speaker 1: where they were making demands that Vine pay them for
Speaker 1: every Vine that was posted. That was not something that
Speaker 1: Twitter was comfortable doing. In a last ditch effort to
Speaker 1: show some love to their creators, Fine held this big
Speaker 1: party in November, but it didn't exactly go as planned.
Speaker 1: Fine through a party to just basically show the influencers
Speaker 1: we care, we appreciate what you're doing, and it completely backfired.
Speaker 1: That's Darwin Metzkert, a social media marketer. He says the
Speaker 1: lavish party actually made the Vine creators more resentful. All
Speaker 1: of the viners looked at this party and how much
Speaker 1: money they spent and literally just went back to their apartments.
Speaker 1: They all literally lived together one building on Fine Street,
Speaker 1: not making that up in Los Angeles, and basically said, well,
Speaker 1: if they have all this money to spend on a party,
Speaker 1: how come there's no money for us. Within weeks, the
Speaker 1: Viners left the platform, and Darwin says Fine lost sixty
Speaker 1: of its traffic. Less than a year later, Twitter announced
Speaker 1: it would shut down Vine completely. It didn't matter how
Speaker 1: funny or innovative or beloved the platform was. Fine just
Speaker 1: wasn't a sustainable business. Fine took an approach towards creators
Speaker 1: that was common among social media companies in the US.
Speaker 1: They were essentially saying, we'll give you an app that
Speaker 1: you can use to become famous and make money, but
Speaker 1: you're on your own to do the rest. What that
Speaker 1: means is that the creator doesn't feel any allegiance to
Speaker 1: the platform. I'm sure you remember that moment when um
Speaker 1: Kylie Jenner tweeted, you know Snapchat is dead or I've
Speaker 1: deleted Snapchat, and those types of things happen because they
Speaker 1: don't have relationships with the people at the companies, and
Speaker 1: so they're not thinking about Snapchat, the faceless brand, the
Speaker 1: company that I don't know anyone at, So I'm not
Speaker 1: worried about hurting someone's feelings. When by dance spot musically
Speaker 1: and rolled out TikTok in the US, they weren't going
Speaker 1: to make the same mistakes during this delicate transition, Alex
Speaker 1: Jew was paying close attention to the creators. I remember
Speaker 1: like working in the office and Alex would spend like
Speaker 1: two hours a day just flipping through his phone watching
Speaker 1: like TikTok videos, and I was like, that's a fun job,
Speaker 1: Like I want to do that more. That's Michael buzzing
Speaker 1: over a product manager at TikTok. He goes by buzz.
Speaker 1: He says the switchover from Musically to TikTok felt like
Speaker 1: a balance act because Musically already had a hundred million
Speaker 1: registered users, it had brand deals and famous creators. Everyone
Speaker 1: on the team was talking to creators and telling them
Speaker 1: that like there's something big coming and this is happening,
Speaker 1: and I did some calls they were like what's TikTok.
Speaker 1: For weeks, Alex Jew gathered all the phone numbers of
Speaker 1: the top creators on Musically. They spent hours calling creators
Speaker 1: personally to assure them that rebranding as TikTok would be
Speaker 1: a good thing. The Bye Dance CEO, John u Ming
Speaker 1: was about to invest a lot of money into making
Speaker 1: sure TikTok was successful, and they were just on the
Speaker 1: cusp of hitting the mainstream. Guys last week on the show,
Speaker 1: I told you about this cool app that I've been
Speaker 1: getting into called TikTok. It lets you post short videos
Speaker 1: of you doing fun stuff like lip syncing or acting
Speaker 1: out a silly scene in Jimmy Fallon spoke about his
Speaker 1: fun new pastime on the Tonight Show, and he did
Speaker 1: more than just talk about TikTok. He urged his audience
Speaker 1: of two point five million nightly viewers to get on TikTok.
Speaker 1: And I asked you guys to make videos of yourselves
Speaker 1: dropping to the ground and rolling around like a tumbleweed
Speaker 1: every time you hear this. So in just a few days,
Speaker 1: you guys made over eight thousand videos. It's got over
Speaker 1: nine million views. That's that's crazy. Thank you so much.
Speaker 1: TikTok says it didn't pay Jimmy Fallon to post on
Speaker 1: the app, and Fallon's team declined to comment. But this
Speaker 1: was a planned partnership and part of a deliberate strategy
Speaker 1: by the company recruit well known American celebrities to shine
Speaker 1: some of their star power on TikTok. Do you identify
Speaker 1: a couple of whales, you pay them for a certain
Speaker 1: number of posting them sort of a flywheel from there
Speaker 1: because you know, the internet is like it is like
Speaker 1: high school cafeteria is the second the popular kids do it,
Speaker 1: everyone wants to get in. This person was a high
Speaker 1: level advisor to Bite Dance. It's his real voice, but
Speaker 1: he wanted to be kept anonymous, and TikTok was able
Speaker 1: to cater to these way e from a massive marketing
Speaker 1: budget that John Giving at Byte Dance gave Alex jew
Speaker 1: The plan was to make TikTok V place for celebrities
Speaker 1: and artists and drive more people to the app. It
Speaker 1: would be a major achievement for a company from China.
Speaker 1: I think every Chinese company wants to prove that it can,
Speaker 1: you know, penetrate the US because the US is still
Speaker 1: dominant in terms of soft power um and so you know,
Speaker 1: this is why they invested literally a billion dollars you
Speaker 1: know what is it a year ago on making sure
Speaker 1: that TikTok was number one, which obviously worked. A spokesperson
Speaker 1: for TikTok says they didn't spend one billion dollars. He
Speaker 1: declined to tell us their global ad budget, but said
Speaker 1: they spent three million in US advertising a loan. Still,
Speaker 1: this point on soft power speaks to something I've noticed
Speaker 1: while I was reporting in China. See American culture has
Speaker 1: huge influence overseas. In China, kids watched The Big Bang Theory,
Speaker 1: They wear NBA jerseys, and they listened to Taylor Swift.
Speaker 1: China has long wanted that kind of cultural press. Stage
Speaker 1: By Dance had just raised a lot of money and
Speaker 1: they were willing to spend big to make TikTok ubiquitous
Speaker 1: in the US. Like I mean, that's a ridiculous marketing budget.
Speaker 1: That's I think that's an indication of the willingness to
Speaker 1: put resources full throttle. But like I would also argue,
Speaker 1: that's just paying your way up the charts. On New
Speaker 1: Year's Eve, TikTok beamed its logo on the facade of
Speaker 1: the Burj Khalifa in Dubai, the world's tallest building, and
Speaker 1: on the other side of the globe. In New York City,
Speaker 1: the TikTok logo was adorned at the very top of
Speaker 1: the ball drop in Times Square. It went beyond billboards.
Speaker 1: The Bye Dance CEO, John gi Ming, wanted to flood
Speaker 1: the Internet with TikTok ads to accelerate the apps growth,
Speaker 1: and he was actually using TikTok's competitors American social media
Speaker 1: companies as a way to gain new users. Here's the
Speaker 1: former Bye Dance employee, John Boyd Bolton. You know, Bye
Speaker 1: Dance would create slick little ads that show why TikTok's
Speaker 1: cool and and it would have, you know, the little
Speaker 1: installed button on it. And so they did that in
Speaker 1: a way that I could be unprecedented. Frankly, it's really
Speaker 1: ironic looking back that Facebook and Snapchat we're running TikTok
Speaker 1: ads as if they were encouraging their own users to
Speaker 1: leave and join another platform. TikTok's competitors might not have
Speaker 1: known it at the time, but TikTok was coming for them.
Speaker 1: Most of them didn't even know that they were spending
Speaker 1: so much money. Um. And that was surprising to me
Speaker 1: because it was kind of so obvious, Like how could
Speaker 1: an app come out of obscurity suddenly be number one
Speaker 1: over and over again and penetrating the mainstream this rapidly.
Speaker 1: The only way to do that is to pay, Like
Speaker 1: even Facebook's organic growth was not like that, if anything, like,
Speaker 1: I would say, many of them were not taking it
Speaker 1: that seriously. Um. I think maybe they regret that now.
Speaker 1: That was the Bite Dance advisor who spoke anonymously. He said, Snapchat, YouTube,
Speaker 1: and Facebook had a blind spot when it came to TikTok,
Speaker 1: and that was dangerous because TikTok was poaching many of
Speaker 1: the prized employees. One of TikTok's smartest hires was Vanessa
Speaker 1: Papas from YouTube. She literally wrote the YouTube creator playbook.
Speaker 1: It's like the bible for social media stars on turning
Speaker 1: their fame into a profession. And this meant that TikTok
Speaker 1: would run the most aggressive creator focused strategy of any
Speaker 1: social media company. We'll be right back. Meet Gabby Murray.
Speaker 1: She's an eighteen year old from Florida. So I woke
Speaker 1: up pretty early and then I did my morning workout.
Speaker 1: Then I gave myself some clothes for the day I changed.
Speaker 1: She's been on TikTok since the app first launched. It
Speaker 1: was one summer. I was super bored and my mom
Speaker 1: was working and I really wanted to do something fun.
Speaker 1: And I always love to be on camera ever since
Speaker 1: I was little. I love movies, and so I wanted
Speaker 1: to have this goal to get bigger on the app.
Speaker 1: Gabby now has more than seven million followers. She remembers
Speaker 1: the first time one of her TikTok videos went viral,
Speaker 1: and I love Stranger Things. Stranger Things is one of
Speaker 1: my favorite shows. I thought of this idea. I got
Speaker 1: my wardrobe on and I pretended to be like eleven
Speaker 1: from Stranger Things, UM and I and I opened, like,
Speaker 1: put my hand out and I opened the door with
Speaker 1: my mind, which I didn't actually do. I edit it,
Speaker 1: but it looked pretty dope. That was the video that
Speaker 1: got me like the big numbers for sure. I love
Speaker 1: how Gabby clarifies that she didn't actually open the door
Speaker 1: with her mind. Gaby quickly realized that getting famous on
Speaker 1: TikTok was not just an art but a science, because,
Speaker 1: unlike its competitors, TikTok gives creators a roadmap on how
Speaker 1: to reach more people if you're on Twitter or Facebook.
Speaker 1: Most hashtags start trending organically when lots of people post
Speaker 1: about the same thing, but the popular hashtags on TikTok
Speaker 1: are often hatched within the company or sponsored by brands.
Speaker 1: They're often referred to as challenges. When Gabby is making
Speaker 1: her videos, she follows the TikTok playbook. Yeah, so when
Speaker 1: you use a trending hashtag, it just pushes the video
Speaker 1: out to the algorithm more and essentially you get more likes, follows, shares,
Speaker 1: you just get more of everything. Gabby says that after
Speaker 1: she got a big enough following, TikTok even assigned her
Speaker 1: an individual manager to keep her updated on current trends.
Speaker 1: But I do have a TikTok representative or like a
Speaker 1: micro manager if you want to call it that. Gabby
Speaker 1: might have a different definition of micromanager. And um, she
Speaker 1: actually sends like an email of like all the trending
Speaker 1: hashtags and everything that we should be doing, like what
Speaker 1: are the new features on TikTok and using those tips
Speaker 1: can get you more exposure? Do you think that they work? Yeah, no,
Speaker 1: for sure. I've actually tested it out one time and
Speaker 1: the video did super well for me, And um, it
Speaker 1: wasn't something I would typically post, but I just wanted
Speaker 1: to try it out because she said so, so I
Speaker 1: just tried it. A TikTok spokesperson told me that using
Speaker 1: a trending hashtag does not necessarily guarantee more views, and
Speaker 1: organic trends still emerge on the platform. But I want
Speaker 1: to highlight Gabby's point about the TikTok rep who works
Speaker 1: with her at Facebook or Twitter. This kind of thing
Speaker 1: tends to happen with the president or like Kim Kardashian.
Speaker 1: YouTube does this with their really big stars. But almost
Speaker 1: every TikTok creator I've ever spoken to with more than say,
Speaker 1: a hundred thousand followers has told me some version of
Speaker 1: the same story. The highly personal touch doesn't just come
Speaker 1: out of the goodness of TikTok's heart. This is a
Speaker 1: shrewd business move because the more attention TikTok showers on
Speaker 1: creators and musicians, even ones who aren't superstars, the more
Speaker 1: loyal they become on the app, and the more they
Speaker 1: post on TikTok, the more users TikTok draws from Instagram, YouTube,
Speaker 1: and Snapchat. So at this point you might be wondering
Speaker 1: how much is Gabby Murray making. Oh gosh, man, you
Speaker 1: can take a lot. I mean, you know, Charlie Addison,
Speaker 1: all those people make way more Like I mean, I
Speaker 1: guess Addison made five billion this year rumored, has it? Uh?
Speaker 1: That's insane on TikTok alone, And I don't even think
Speaker 1: it's been a year since she was popular. Like it's wild.
Speaker 1: But for me, like on a good month, I would
Speaker 1: say anywhere from ten to fift twenty grand um, which
Speaker 1: is fantastic. Charlie and Addison are actually two different people.
Speaker 1: They have a TikTok stars Addison Ray and Charlie Jamilio.
Speaker 1: Forbes says that each of them make over four million
Speaker 1: dollars a year. But Gabby's bringing home annually up to
Speaker 1: two thou dollars. Let's just sit with that for a second.
Speaker 1: That's a lot of money. And now she has her
Speaker 1: sights on more. Gabby's decided to put college on hold
Speaker 1: and try her luck in l A. I have representation
Speaker 1: in l A. And it's it's a it's a commitment,
Speaker 1: and I'm making money. I'm making a good salary and
Speaker 1: and I think I should take this opportunity. Now I
Speaker 1: can always go back to college. So I'm gonna be
Speaker 1: making bank hopefully, right, that's the goal. So well, she
Speaker 1: can only make bank if her manager can actually get
Speaker 1: her on the phone. Here's Brian Nelson, who represents Gabby
Speaker 1: and a roster of teen influencers. I will tell you
Speaker 1: that the anxiety level for me is very high. Most
Speaker 1: of them don't want to talk on the phone at all.
Speaker 1: They don't like to read press or just read in general.
Speaker 1: They like to watch video, so when Brian has a
Speaker 1: job opportunity for them, they can be hard to reach.
Speaker 1: They won't read or talk, and they're the great communicators
Speaker 1: of our time, but they're kind of communicating like the
Speaker 1: way they want to Finding them is actually our biggest problem.
Speaker 1: To be honest, you're I mean, I wish I can
Speaker 1: chip every single one of them. We'll be right back.
Speaker 1: TikTok has created a new economy, so to speak, which
Speaker 1: can support young TikTok stars like Gabby and managers like Brian.
Speaker 1: It might sound like some incredible flute, but it actually
Speaker 1: follows the blueprint that can be traced right back to
Speaker 1: Alex to the way I look at it, Viewing a
Speaker 1: community is very similar to running a country, running economy,
Speaker 1: and you want people from Europe to migrate to your country? Right?
Speaker 1: And is what I means Europe? Facebook is Europe? Okay,
Speaker 1: you do it. That's Alex speaking at a tech conference.
Speaker 1: In the person you hear laughing is Josh Alman, one
Speaker 1: of Alex's early investors. I just want to point out
Speaker 1: something funny in Alex's metaphor. The Chinese owned app TikTok
Speaker 1: is America, and the American owned apps Instagram and Facebook
Speaker 1: are Europe. And bear with me here, this elaborate metaphor
Speaker 1: is actually pretty alien. Alex likens the people joining TikTok
Speaker 1: two settlers moving to a brand new country. How can
Speaker 1: you attract those people to come in the problem with
Speaker 1: Europe is the social class is already stabilized. For average
Speaker 1: citizen of Germany, of France, they have almost zero opportunity
Speaker 1: to go upper in the social class. Right, So here
Speaker 1: Welton social class are standing for social media fame, and
Speaker 1: Alex is saying the chances are blowing up on Instagram
Speaker 1: now are slim because it's already so crowded. But TikTok
Speaker 1: would be uncharted territory, the wild West, where average people
Speaker 1: can move and maybe strike gold. And then these people
Speaker 1: became real model for other people living in Europe, and
Speaker 1: they say, hey, this is a normal guy and he
Speaker 1: just went to America and he became super rich. I
Speaker 1: can do the same, right, And then lots of people
Speaker 1: came to your country and your girl population, you girl,
Speaker 1: you can't. Alex also knew it wasn't enough to just
Speaker 1: focus on the top creators the royal class. To use
Speaker 1: this terminology, you also had to create a path and
Speaker 1: a promise for the lower classes to climb the ranks
Speaker 1: that if they post a lot of videos on TikTok,
Speaker 1: then one day they too could become famous and they
Speaker 1: make money along the way. Having an American dream is good,
Speaker 1: but if it's only a dream, people will wake up.
Speaker 1: You have to give the opportunity to average people and
Speaker 1: make sure it got such function, make sure it was
Speaker 1: around middle class coming up. This strategy that Alex laid
Speaker 1: out would actually work to a t TikTok did draw
Speaker 1: creators and artists away from Instagram and Facebook. They did
Speaker 1: provide new ways of getting famous on social media, and
Speaker 1: you can see the most extreme examples of that in
Speaker 1: TikTok's collab houses. A very quick tour of the new
Speaker 1: hype house. We'll start here Elevator, Nick rm It's Massy
Speaker 1: Movie Theater room, Andrea's, Michael's cubby, Tony's Room, Thomas Room
Speaker 1: on the second floor. If you've never heard of a
Speaker 1: collab house, these are mansions where a bunch of TikTok
Speaker 1: stars lived together and create videos. Race three to one.
Speaker 1: It's a bit like real World meets Shark Tank. Imagine
Speaker 1: a sleepover but forever and now living with my friends,
Speaker 1: like these are my best friends, Like I grew up
Speaker 1: with these kids. That's Alex Warren. He's twenty years old
Speaker 1: and has around fourteen million followers on TikTok. He's one
Speaker 1: of the founding members of the Hype House, a TikTok
Speaker 1: mansion in the Hollywood Hills. Alex Warren has eleven roommates,
Speaker 1: ages seventeen to twenty two, and each of them has
Speaker 1: millions of followers on TikTok. You're never alone. There's always
Speaker 1: something happening, like someone's screaming. We have a bus outside
Speaker 1: that we just got. I had bought a golf cart.
Speaker 1: Like with cycles, we have drift cards. By the way,
Speaker 1: I had to look up what a drift car is.
Speaker 1: You know how in some movie chasings a car might
Speaker 1: skid sideways and a cloud of smoke against the direction
Speaker 1: of the wheels. Apparently you can buy a car build
Speaker 1: just for that purpose. Anyway, the Hype House is a
Speaker 1: mansion full of toys. It's a nine million dollar house
Speaker 1: with a theater and elevator and a pool, and of
Speaker 1: course there are multiple balconies to shoot videos and glorious
Speaker 1: outdoor light. The Hyphaus even has brand sponsorships. There's this
Speaker 1: energy drink that's featured in a lot of the Tiktoker's videos. Deceptively,
Speaker 1: these TikTok mansions are also workspaces. They allow the TikTok
Speaker 1: stars to create videos together and build off each other's followings.
Speaker 1: This gets some more attention and bigger brand deals, and again,
Speaker 1: that doesn't just benefit the creators, it also means more
Speaker 1: viewers and more money for TikTok and Alex Warren is
Speaker 1: quick to point out that it's not all just fun
Speaker 1: and games. He says that, well, being an influence and
Speaker 1: shooting short videos might look easy, it's hard work. This
Speaker 1: is real work. It's different, it's not something you're used to,
Speaker 1: but it is real work. And this job is hard.
Speaker 1: And the amount of times I've gotten where it's like, oh,
Speaker 1: you know, you don't have a real job, and it's like,
Speaker 1: it's not what my taxes say. He wouldn't say exactly
Speaker 1: how much he's making. I can't tell you that that's
Speaker 1: a good try though, but he would give a ballpark
Speaker 1: figure seven figures a year, so that's at least one
Speaker 1: million dollars a year for Alex Warren. But what does
Speaker 1: TikTok get out of it? Well, droves of teenagers tune
Speaker 1: in every day to TikTok to follow Alex's every move.
Speaker 1: Some of them copy his dances, dream his favorite music,
Speaker 1: and try to replicate his silly pranks, and most importantly,
Speaker 1: many of his TikTok followers by the stuff that he
Speaker 1: and his high house roommates tell them to buy. The
Speaker 1: TikTok stars drive up the time users spend on the app,
Speaker 1: and also trek brands to advertise through the platform. Now
Speaker 1: TikTok is experimenting with online shopping. They're placing buttons right
Speaker 1: and brand sponsored videos that can lead users to buy
Speaker 1: whatever it is the creators are selling. So while Alex
Speaker 1: becomes a millionaire, TikTok is getting richer too. Alex Warren
Speaker 1: was doing so well on TikTok that when I spoke
Speaker 1: to him recently, he'd even become a job creator. I've
Speaker 1: been doing this all myself for the last few years.
Speaker 1: Recently I've hired a manager. Obviously, it's hired an assistant,
Speaker 1: So I totally believe that churning out videos every day
Speaker 1: is hard work. But I had to stop Alex to ask,
Speaker 1: what exactly does the assistant of a twenty year old
Speaker 1: TikTok star do? My assistant does too much. I love him.
Speaker 1: I just hired him like last week, but like he is,
Speaker 1: I don't know. I have him do everything, which has
Speaker 1: so helpful because I get costumes, I get um skis,
Speaker 1: I get stuff to tew people from the back of
Speaker 1: my car, like and then um. Once he's done with that,
Speaker 1: then it's like, you know, I need to switch over
Speaker 1: to Verizon, I need to go to the d m V.
Speaker 1: I need to um just everyday stuff that, like a
Speaker 1: normal system would help us. And it's not just the assistant.
Speaker 1: He likes. TikTok doats on alex morn. They set him
Speaker 1: a basket of gifts when he reached ten million followers,
Speaker 1: and TikTok set him cookies for his birthday. It sounds
Speaker 1: weirdly chummy, but some of this can be explained by
Speaker 1: cultural differences. In China, there's often a close relationship between
Speaker 1: social media companies and their stars. TikTok's parent company Byte
Speaker 1: Dance wose creators from rival platforms. Some get paid to
Speaker 1: post videos on the Chinese version of TikTok, and the CEO,
Speaker 1: John Giming, even created hundreds of salaried positions for creators
Speaker 1: in China, meaning they received regular paychecks from Bye Dance.
Speaker 1: This was almost unheard of in the US. The closest
Speaker 1: you got was YouTube, which does fund a small number
Speaker 1: of channels and original content, but most of the creators
Speaker 1: there make money by enabling ads on their videos, and
Speaker 1: there was no guarantee. TikTok took a much more hands
Speaker 1: on approach. They're not making any of the mistakes the
Speaker 1: Jack Dorsey and Vine made by not providing really proper
Speaker 1: monetization channels for their talent. That's Starwin Metzker, the marketer
Speaker 1: we heard from earlier. He says brands like Chipotle, the NBA,
Speaker 1: and Red Bull picked up pretty quickly that TikTok would
Speaker 1: be the way to reach the much sought after gen
Speaker 1: Z audience. Now brands are going directly through TikTok and
Speaker 1: having TikTok negotiate with big TikTok stars for branded sort
Speaker 1: of native content. Uh and those deals are going to
Speaker 1: skyrocket because a you get to weaponize this talent that
Speaker 1: means something to their audience, but also TikTok controls all
Speaker 1: the levers to make sure it gets whatever view count
Speaker 1: it's promised to a client. It's really a perfect platform
Speaker 1: for advice. So to be clear, the ad runs on TikTok.
Speaker 1: The creators are famous on TikTok. TikTok can control the
Speaker 1: reach of the ad, and TikTok has connected the creator
Speaker 1: to the product they're selling, meaning TikTok is on every
Speaker 1: end of the deal and the money flows right back
Speaker 1: to TikTok. This all makes the platform even bigger and
Speaker 1: allows them to spend even more. Because the creators owe
Speaker 1: their livelihoods to TikTok, they tend to be fiercely loyal
Speaker 1: to the app. One minager told me that TikTok even
Speaker 1: created a scholarship for a TikTok star to pursue a
Speaker 1: master's degree. Isabel can tro Us The News, the head
Speaker 1: of Music Partnerships at TikTok, says they take a similar
Speaker 1: approach with musicians. We spend a lot of time texting, messaging, emails,
Speaker 1: phone calls. I don't necessarily need to be in real
Speaker 1: life to help you, but they do have like access
Speaker 1: to me um as much as I can give that,
Speaker 1: and Isabel has even personally visited the homes of artists
Speaker 1: on TikTok to advise them on videos. TikTok even pairs
Speaker 1: artists with brands for sponsorship deals and sometimes takes a
Speaker 1: cut along the way, because the more money artists can
Speaker 1: make through the app, the more money that flow was
Speaker 1: into TikTok. The company prioritizes music because music is the
Speaker 1: backbone of the app. Almost every skit or meme on
Speaker 1: TikTok is time to a song. Every video predicated on
Speaker 1: a beat, so without music, TikTok probably wouldn't have become
Speaker 1: the online playground and the soundtrack for an entire generation.
Speaker 1: As TikTok gains power in the music industry, it even
Speaker 1: sometimes tells the record labels what to do. When the
Speaker 1: rapper Megan the Stallion was first getting popular on TikTok,
Speaker 1: her label wanted to put their marketing muscle behind a
Speaker 1: song called Captain Hook A little bit of Curve, Collet
Speaker 1: Niggle Captain Hook Adult Shop, but Isabel said no. Instead,
Speaker 1: she advised them to put five songs out on TikTok
Speaker 1: and then just lurk and see how they do. So
Speaker 1: Captain Hook did okay, and but Savage you could just
Speaker 1: see um, the creation amounts like in a short period
Speaker 1: of time were incredible bowl and then it just was
Speaker 1: just growing exponentially every day. So after seeing Savage far
Speaker 1: outperformed Captain Hook any other songs, TikTok moved all its
Speaker 1: marketing attention towards promoting Savage. We let it sort of
Speaker 1: simmer um in the app, and then we started seeing
Speaker 1: that Savage was going and even then I we held
Speaker 1: promo levers to just let the sound mature to the
Speaker 1: right point where then when we pulled everything that we
Speaker 1: had against it, it just propelled it to number one.
Speaker 1: When TikTok moved to promote Savage, it turned the song
Speaker 1: into a monster hit, reaching number one on the Billboard charts.
Speaker 1: Megan the Stallion recorded a remix with Beyonce which even
Speaker 1: mentioned TikTok and the lyrics and featured TikTok clips in
Speaker 1: the music video. Talk about incredible advertising for TikTok. This
Speaker 1: is another thing that go back to Alex jew He
Speaker 1: knew early on to steer clear of outright competing with
Speaker 1: the record labels. Here he is we only accuse music
Speaker 1: as a role material. Music is not in the product.
Speaker 1: Having the music or musically actually helped them to generate revenue.
Speaker 1: This tape from Alex is really revealing. First of all,
Speaker 1: he's talking about music as raw material, like it's slumber
Speaker 1: or steal, because music is the basis for the videos
Speaker 1: people make, catchy songs or what makes TikTok so addictive.
Speaker 1: But also as much as the music industry makes it
Speaker 1: seem like TikTok was this accidental hit maker, Alex is
Speaker 1: saying that all this was planned from the start, that
Speaker 1: TikTok launches hit song after hit song by design. I
Speaker 1: spoke to Judge Alio, who worked for alex A musically
Speaker 1: back before it was folded into TikTok. She says, they
Speaker 1: put an enormous effort into winning over the music industry.
Speaker 1: We negotiated deals of basically all the big record labels,
Speaker 1: the ones I remember our Warner and UM Universal. Yeah,
Speaker 1: so I think UM. At the beginning, they just didn't
Speaker 1: understand it. They're like, why are you guys doing these
Speaker 1: fifting seconds you know, music clips, Like what is what
Speaker 1: is this? That they didn't understand what was going on
Speaker 1: because it was such a new format by Dance inherited
Speaker 1: all these relationships with the record companies when they purchased musically,
Speaker 1: and they became just one more way for Bye Dances
Speaker 1: CEO John gi Ming to buy power and influence in America. Initially,
Speaker 1: music executives were skeptical about doing business with Eiming and
Speaker 1: Bye Dance because it was a Chinese company, and China
Speaker 1: was notorious for stealing intellectual property, including ripping off music.
Speaker 1: You know, I think there was some natural skepticism of like, hey,
Speaker 1: can we trust these guys. You know what's going to happen.
Speaker 1: We've had issues in China with with intellectual property. That's
Speaker 1: John Boyd Bolton. He was the American guy in the
Speaker 1: room presenting Bite Dance, so it was his job to
Speaker 1: quell the fears from the record labels. You know, there
Speaker 1: was a lot of just trying to reassure the industry
Speaker 1: that these are good guys. They're they're trying to do
Speaker 1: the right thing. You know, they're American investors insist on it.
Speaker 1: Otherwise they won't they won't have a successful business if
Speaker 1: they don't do this right. And John's reassurance has worked.
Speaker 1: TikTok has now launched the careers of a generation of artists.
Speaker 1: It's so influential that record labels, brands and advertisers, so
Speaker 1: they can no longer turn away from TikTok, even if
Speaker 1: they don't quite understand it. Here's tark alham Dooney, an
Speaker 1: executive at our c A, the label that signed Flow Millie.
Speaker 1: We've never seen this before, and I and I and
Speaker 1: I haven't seen it consistently from any platform ever. We're
Speaker 1: just over and over and over again. Kids are able
Speaker 1: to take records and turn them into hits. After the
Speaker 1: music industry fully embraced TikTok, it was like the company
Speaker 1: had arrived. The gatekeepers of American pop culture determined that
Speaker 1: tick talk was in. But I want to bring up
Speaker 1: something bitter sweet here. Just as TikTok's growth was exploding,
Speaker 1: Alex Jew decides to take a leave of absence from
Speaker 1: the company. He told his co workers, I need some
Speaker 1: time off. I'll let you know when I come back.
Speaker 1: Alex had achieved this massive success. He sold his start
Speaker 1: up and made a lot of money. His theories about
Speaker 1: stardom and music turned into a profitable business model. But
Speaker 1: still he felt aimless and exhausted. He needed a break.
Speaker 1: He later told The New York Times that he spent
Speaker 1: these months clubbing in Shanghai and listening to a lot
Speaker 1: of jazz. In Alex's absence, TikTok mostly answered to the
Speaker 1: Bye Dance execs in Beijing and the CEO, John Yu Ming,
Speaker 1: and TikTok seemed to fulfill you means wish his social
Speaker 1: media platform had won over the world. But this very
Speaker 1: powerful app had a very large dark side. Because for
Speaker 1: all the fun people were having on TikTok, there were
Speaker 1: plenty of murky corners of the app filled with videos
Speaker 1: about anorexia, bullying, in sexual exploitation of the very young
Speaker 1: kids who were on the app, And because of the
Speaker 1: way TikTok's highly personalized algorithms work, it was extremely hard
Speaker 1: for parents and regulators to track what was going on
Speaker 1: and what kids were being exposed to on TikTok. We'll
Speaker 1: tell you more about that next time on Foundering. Foundering
Speaker 1: is hosted by me Shelley Banjo, Sean wyn Is, our
Speaker 1: executive producer, Lucas Shaw, Sarah Fryar, Tom Giles, and Isabel
Speaker 1: Lee contributed reporting to this episode. Special thanks to Mark
Speaker 1: Bergen and Champion quant Raymondo is our audio engineer, Molly
Speaker 1: Nugent is our associate producer. Our story editors are Mark
Speaker 1: Million and Vander May and Alistair Barr. Francesca Levi is
Speaker 1: the head of bloom Work Podcasts. Be sure to subscribe
Speaker 1: and if you like our show, leave a review. Most importantly,
Speaker 1: tell your friends see you next time.