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TikTok Vs. YouTube- Who’s the Real King?

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TikTok Vs. YouTube has become the hottest topic and is a new class war on the internet. Recently, a war erupted between YouTube influencers and TikTok creators and people are going insane. Until now, YouTube has been flooded with many contents roasting the followers and influencers of both the channels on various grounds. In short, such information is a kind of trash for marketers and business owners. 

So, on what grounds will you identify which platform is the best or which one is leading the market in terms of finance? In this blog, we will give deep insight into the same and let you determine whether YouTube is the real king or the TikTok. 

TikTok Vs. YouTube- Ownership and Establishment

YouTube was launched in the year 2005 while TikTok was introduced in 2016 in China market. The exponential growth of TikTok has been brilliant from the day it was launched in the market. 

YouTube was founded by three former employees of PayPal, namely Chad Hurley, Steve Chen, and Jawed Karim. YouTube too has a history of great exponential growth and it was purchased by Google in November 2006 for US$1.65 billion. It is now operating as one of the subsidiaries of Google. 

If we talk about TikTok, after its launch in 2016, TikTok began expanding its business internationally, and hence, in 2017, it was launched for iOS and Android in markets outside of China. The parent company of TikTok - ByteDance bought Musical.ly, the competitor of TikTok in $1 billion.  On 2 August 2018, TikTok was merged with Musical.ly and became available in the United States. After that, the customer base of TikTok started increasing rapidly. 

The Growth Story of Both the Platforms

In the year 2019, TikTok crossed 100+ crore downloads. Recently, it has crossed 200+ crore downloads. India is a very big and important market for TikTok. In 2019, its total download worldwide was 32 crores among which 44% downloads were from India. Hence, the popularity of TikTok in India is growing at a great pace. Furthermore, people are spending a significant amount of time on this platform. 

If we talk about YouTube, it has 500+ downloads worldwide and has 200 crores, active users. According to the current survey done in April 2020, TikTok has 80 crores, active users. Hence, YouTube has more users than TikTok but TikTok is growing at a great speed and is trying to catch up with YouTube. 

The app installation of TikTok is also increasing significantly. In the beginning, it had a record of 7 lakh downloads every month. However, the figure has now reached to 7 crore downloads. India has 11.9 crores of active monthly TikTok users. On the other hand, YouTube has 26.5 crores monthly users in India which is again more than double the monthly users of TikTok. 

youtube

Financial Reviews of TikTok and YouTube

YouTube gets most of its revenue from the advertisement. As we know, Google is the biggest advertisement platform in the world and it has utilized its subsidiary YouTube excellently for advertisements. 

Until 2007, there wasn’t an option for monetization on YouTube. People could only upload their videos but they didn’t receive any money for the number of likes, subscribers, and views. The same year, the platform started inviting advertisements on its platform and began analyzing them. 

After two years of testing, YouTube eventually launched different formats for different types of advertisements. The content creators of YouTube, also known as YouTubers, began earning money through their video content on the channel. In the beginning, the YouTube advertisement was launched in the US and after a few years, it was launched in India as well. 

Advertisement is the main source of revenue for YouTube. Recently, it has also launched its premium subscription, however, advertisement still remained the main source. The total revenue of YouTube in 2019 was $15 billion (1,08,000 crores) while in 2018, the revenue was $11 billion and it was $8 billion in 2017. This means that in just two years, the revenue of YouTube has almost doubled has achieved 100% growth. 

revenue

Talking about TikTok, the total revenue of TikTok in 2019 was about $150 million (1000 crore). If we compare the revenue of both the channels, then the revenue of TikTok is 1% of the revenue of YouTube. This signifies that the user base of TikTok is surely growing at a fast pace but is facing some difficulty in earning revenue. 

Types of Contents on the Channels

There are a variety of contents on YouTube and each content has a good length. The average length of the YouTube video is 4.5 minutes and there are many videos that have a length of more than 10 minutes. Because of lengthy content, the channel can easily run the advertisements. Besides, there’s a facility of more than one ad on videos that are longer than 10 minutes because of which content on the platform is well monetized. 

On the contrary, TikTok has shorter video lengths of each 15 seconds. Hence, there’s no room for playing ads on the channel. 

Google and YouTube have always been ahead in the race of ad display. Google has a record of billions of customer data. For example, to have an account on Gmail, you have to fill some real information over there. Google fetch these data. Many times, when you use Google, your Gmail account is active. Your preferences and choices are being tracked by Google on the basis of your search, etc. and they are then used to display related ads on your screen. 

Hence, if any company uses Google or YouTube to get their ads to outreach to its target customers, these are done easily. On the other hand, TikTok has quite a limited database due to which advertising companies can’t get their ads reached to their target customers. Hence, they prefer YouTube and Google.

Another main issue is that TikTok is mainly used for the purpose of entertainment. Although TikTok tried to start several educational programs, it didn’t succeed. 

Whereas, YouTube has a variety of content and customer database which allows advertising companies to get their products advertised to their target customers easily. 

Business Strategy

TikTok uses multiple brand strategies while YouTube uses a single brand strategy. The parent company of TikTok, ByteDance, has launched several other apps similar to TikTok that have slightly different features than Tiktok such as Halo and Vigo with each having more than 10 crores downloads. 

tiktok

FMCG Company Hindustan Unilever Limited also uses a multiple brand strategy. It launches similar products with a different brand name. For instance, it has three brands for washing powder- Surf Excel, Rin, and Vim. All of these brands generate a revenue of more than 1000 crores. Hence, HUL is using its multiple brand strategy brilliantly.

However, YouTube is focusing on a single brand strategy. Besides just videos, it entered into Music and launched YouTube Music. Hence, YouTube is trying to cover different things through one brand. Very soon, YouTube is preparing to launch YouTube Shorts to give competition to TikTok. YouTube shorts will let people upload short videos on YouTube just like TikTok. 

youtube shorts

Facebook also tried to compete with TikTok and in 2018, it launched its app where people can create short videos and upload it on Facebook but it didn’t work. In fact, the app didn’t even cross 1 crore downloads. 

If YouTube succeeds in its plan, then it will be a great challenge for TikTok. 

If we talk about the business model, then the business model of YouTube is more powerful and strong.
The user base of TikTok can surely beat YouTube in the future but YouTube will always stay ahead due to its strong fundamentals of business models and revenue. 

author

Khushboo