Tencent Is Bringing Content Creators to WeChat to Challenge TikTok’s Dominance
By Reuters | Updated: 13 January 2023
On a hot summer’s day last year, the 90’s boy band Backstreet Boys clambered on to a stage in Pennsylvania and belted out hits as 44 million viewers tuned in from thousands of miles away for the online concert hosted by China’s WeChat Channels.
The show is just one of many events held by WeChat owner Tencent to promote the app’s short-video platform – described by the tech giant’s founder Pony Ma as “the hope of the company”.
Tencent Holdings Ltd has tapped other entertainers too like Taiwan’s Jay Chou and Irish boy band Westlife for livestreamed concerts and, according to a source, has set up a team to build a community of content creators as it seeks to challenge the dominance of ByteDance, the owner of TikTok and Douyin, and Kuaishou in the short-video business.
“Tencent hopes it can turn Channels into the next WeChat Pay. It has a shot at it. But it is also going to be difficult,” said Liao Xuhua, a senior analyst at research firm Analysys.
WeChat Pay became the second-biggest player in China’s mobile payment market within a year of its 2013 launch, behind Alipay which is owned by Jack Ma-founded Ant Group.
Two sources familiar with Tencent said the importance of Channels has been repeatedly communicated within the company.
The two-year old platform has been a bright spot for Tencent in an otherwise dismal 2022 when revenue for its other products, such as games and payment services, were slammed by tighter gaming regulations and strict COVID-19 curbs.
The total number of views on Channels surged more than three-fold last year, Tencent said this week as it revealed its latest growth figures for the platform.
Daily active creators and video uploads more than doubled.
Gross merchandise value (GMV) from livestreaming e-commerce, where telegenic personalities hawk goods online in real time, jumped more than 800 percent on Channels, the company said.
It did not disclose absolute figures.
A LatePost report says Channels’ daily transactions from livestreamed sales pitches reached more than CNY100 million ($15 million, or roughly Rs. 122 crore) in September 2022 for the first time, indicating an annual rate of about CNY36 billion (roughly Rs. 43,000 crore).
But Douyin was already aiming to bring its GMV to over 1 trillion yuan ($155 billion or roughly Rs. 12 lakh crore) in 2021, a six-fold jump from 2020 levels, sources said at the time. ByteDance does not publicly disclosee official GMV numbers.
Tencent has been integrating many of its products, ranging from Tencent Meetings to WeChat Mini Program, with Channels to help creators livestream content just like the U.S. band Backstreet Boys.
Tencent Meetings is a Zoom-like teleconference service while mini programs are like apps on Apple’s iOS and Google’s Android operating systems but less data intensive and run within WeChat.
An integration would allow, for example, a podcast host to conduct an interview on Meetings and livestream it on Channels. If the host recommends a product during the chat, a link can pop up on the screen to take viewers to a Mini Program where they can buy the product using WeChat Pay.
Tencent has also slashed the threshold for monetisation on Channels, allowing users with as few as 10 followers, versus 1,000 earlier, to start making money through advertisements.
TikTok requires content creators to have more than 10,000 followers to start monetising.
Channels has also opened up ad opportunities “like never before”, said Li Yikai, general manager of Americas and EMEA at ad agency Nativex, versus WeChat that pushes a few ads a day.
“When you are already scrolling and come across an ad, you don’t think twice about it. So naturally you come across a lot more ads with short videos,” Li said.
In November, Tencent President Martin Lau said Channels’ advertising revenue was on track to reach 1 billion yuan in the fourth quarter of 2022.
For TikTok and Douyin, research firm Insider Intelligence estimated in April last year that ad revenues would together reach more than $30 billion (roughly Rs. 2.4 lakh crore) for 2022.
Channels has also started charging e-commerce merchants a 1 percent to 5 percent commission fee from this month.
Douyin has been charging 1 percent to 10 percent since 2020.
While some analysts see Channels as Tencent’s best chance to catch up with ByteDance, others believe it will be tough for it to become as big as Douyin, the Chinese version of TikTok.
“When you have to start from being a social network app and then enter into the short-video space, you have to build up a whole e-commerce system to support it … I won’t say they can’t get there but it’s very difficult,” Analysys’ Liao said.
But Shawn Yang, managing director at research group Blue Lotus Capital Advisors, is bullish on Channels given the potential of WeChat’s traffic.
WeChat, China’s most popular chat app, has more than a billion active users.
“For example, in Douyin or Kuaishou, you won’t be able to ask your viewers to add you on WeChat. But on Channels, you can quickly add somebody on WeChat,” Yang said.
“This is very beneficial to those who already have their own private traffic on WeChat,” he said.
© Thomson Reuters 2023
TikTok Never Shared US Data With Chinese Government, Says CEO Shou Zi Chew Amid Growing Security Concerns
By Reuters | Updated: 22 March 2023
TikTok CEO Shou Zi Chew will tell lawmakers the Chinese-owned short video app with more than 150 million American users has never, and would never, share U.S. user data with the Chinese government amid growing U.S. national security concerns.
“TikTok has never shared, or received a request to share, U.S. user data with the Chinese government. Nor would TikTok honor such a request if one were ever made,” Chew will testify on Thursday, according to written testimony posted on Tuesday by the House of Representatives Energy and Commerce Committee.
He added that TikTok’s parent company ByteDance is not owned or controlled by any government or state entity. “Let me state this unequivocally: ByteDance is not an agent of China or any other country,” Chew will say to the committee.
TikTok’s critics fear that its U.S. user data could be passed on to China’s government by the app and prompted growing calls to ban the app U.S. lawmakers. Last week, TikTok said the Biden administration demanded that its Chinese owners divest their stake in the app or it could face a U.S. ban.
“Bans are only appropriate when there are no alternatives. But we do have an alternative,” Chew’s testimony said.
TikTok has said it has spent more than $1.5 billion on what it calls rigorous data security efforts under the name “Project Texas.”
Chew said when the process is complete “all protected U.S. data will be under the protection of U.S. law and under the control of the U.S.-led security team. Under this structure, there is no way for the Chinese government to access it or compel access to it.”
The company said it had started this month to delete U.S. user protected data in data centers in Virginia and Singapore after it started routing new U.S. data to the Oracle Cloud last year. Chew’s testimony said it expects this process to be completed later this year.
Chew’s testimony says 60% of ByteDance is owned by global institutional investors including Blackrock, General Atlantic,
and Sequoia, about 20% by the company’s founders, and about
20% owned by its employees “including thousands of Americans.”
TikTok said on Monday that more than 150 million people in the United States use TikTok on a monthly basis after saying in 2020 that 100 million Americans used the app. Chew’s testimony says the average user today is an adult well past college age.
“While users in the United States represent 10% of our global community, their voice accounts for 25% of the total views around the world,” Chew’s testimony says.
Chew says current versions of the app do not collect precise or approximate GPS information from U.S. users.
TikTok Hits 150 Million Monthly Active Users in US as Country Mulls Ban Over Security Concerns
By Reuters | Updated: 21 March 2023
TikTok said on Monday the short-video sharing app now has 150 million monthly active users in the US, up from 100 million it said it had in 2020.
The Chinese-owned app confirmed the figure ahead of TikTok CEO Shou Zi Chew’s testimony set for Thursday before the House Energy and Commerce Committee.
On Friday, six more US senators backed bipartisan legislation to give President Joe Biden new powers to ban TikTok on national security grounds. Last week, TikTok said the Biden administration demanded that its Chinese owners divest their stake in the app or it could face a US ban.
The app faces growing pressure in Washington including calls to ban the app by many in Congress who fear its US user data could fall into the hands of China’s government. TikTok said in September 2021 that globally it had more than 1 billion monthly users.
Senate Intelligence Committee chair Mark Warner, who is cosponsoring legislation to give the administration more powers to ban TikTok, said at a Christian Science Monitor breakfast that he did not think TikTok US data was safe.
“This notional idea that the data can be made safe under (Chinese Communist Party) law, just doesn’t, doesn’t pass the smell test.”
TikTok said it has spent more than $1.5 billion (roughly Rs. 12,400 crore) on rigorous data security efforts, rejects spying allegations, and said “if protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access.”
The new figures are a sign of the app’s wide popularity especially among younger Americans. Commerce Secretary Gina Raimondo told Bloomberg News there could be political ramifications to banning TikTok. “The politician in me thinks you’re gonna literally lose every voter under 35, forever,” she said.
Some TikTok content creators will come to Washington this week to make the case why the app should not be banned.
© Thomson Reuters 2023
TikTok Gets Banned on Government Devices in New Zealand: Report
By ANI | Updated: 18 March 2023
After the United States, the UK and New Zealand became the latest western countries to ban the Chinese-owned video-sharing platform TikTok on “government devices” citing security fears, The New York Times reported.
The UK, on Thursday, announced the ban of TikTok with immediate effect citing security fears linked to the video-sharing app’s ownership by a Chinese company.
Speaking in the parliament, Chancellor of the Duchy of Lancaster Oliver Dowden described the ban as “precautionary,” even though the United States, the European Union’s executive arm, Canada and India had already taken similar steps.
Dowden said social media apps collect and store huge amounts of user data including contacts, user content and geolocation data on government devices which can be sensitive, according to The New York Times.
Post COVID-19, TikTok has aroused more suspicion than most because of its owner, the Chinese company ByteDance.
Britain’s actions reflect fears expressed across a variety of Western governments that TikTok might share sensitive data from devices used by politicians and senior officials with the government in Beijing.
The ban was announced on Thursday after the announcement of hardening the policy in Britain. On Monday, Prime Minister Rishi Sunak described China as an “epoch-defining challenge” to the international order.
The new instruction applies only to the official work phones of government officials, and it was described by Dowden as a proportionate approach to addressing a potential vulnerability of government data, reported The New York Times.
In a statement on Thursday, TikTok said it was disappointed with the British government’s decision, saying that the bans imposed on it were “based on fundamental misconceptions and driven by wider geopolitics.” It added that it was taking steps to protect British users’ data.
Several British government departments have TikTok accounts as part of their public outreach, including the country’s defence ministry, and as recently as one day ago, Michelle Donelan, the secretary of state for science, innovation and technology, said the app was safe for British people to use.
“In terms of the general public, it is absolutely a personal choice, but because we have the strongest data protection laws in the world, we are confident that the public can continue to use it,” she told lawmakers in Parliament.
Earlier, the US threatened to ban TikTok from the country unless the app’s Chinese owners agree to spin off their share of the social media platform, TikTok acknowledged Wednesday evening.
In response to that message, TikTok’s Chief Executive Shou Zi Chew said, divesting the company from its Chinese owners — a move the US is now demanding — doesn’t offer any more protection than a multibillion-dollar plan the company has already proposed, Wall Street Journal reported.
‘I’m Back’, Writes Donald Trump as His First Facebook Post After Two-Year Ban
By Reuters | Updated: 18 March 2023
Former US President Donald Trump wrote his first Facebook post on Friday after being banned from social media platforms for two years.
“I’M BACK,” Trump posted along with a 12-second video which seems to be his victory speech after winning the 2016 election and also tried to put out his campaign for the 2024 election in that video.
After the 2016 video, Trump put his famous slogan “Make America Great Again” or MAGA, which came to be popular during his last successful presidential campaign.
Earlier, in February, Meta restored Trump’s Facebook and Instagram accounts. Andy Stone, policy communications director at Meta, has confirmed the development, NBC News reported.
The reinstatement had been expected after Facebook’s president of global affairs Nick Clegg in January said that the suspension will be lifted, as per the news report. Trump’s accounts on Facebook and Instagram were suspended by Meta after January 6, 2021, Capitol riot.
The ban was announced initially as an indefinite ban that included the last two weeks of his presidency, as per the NBC News report. The ban on Trump’s account was later formally extended for two years.
At the time of writing this news article, Trump has not shared any new posts on his Facebook or Instagram accounts. His last Instagram post, dated January 6, 2021, promoted the ‘Save America’ march where he would encourage his supporters to march on the Capitol.
Sharing the post on Instagram, Trump captioned it as, “I will be speaking at the SAVE AMERICA Rally tomorrow on the Ellipse at 11 AM ET (8:30 PM IST). Arrive early – door open at 7 AM ET (4:30 PM IST). Big Crowds!”
Trump’s last post on Facebook before the suspension called for people to leave the Capitol. In the post on Facebook, Trump stated, “I am asking for everyone at the US Capitol to remain peaceful. No violence! Remember, WE are the Party of Law & Order — respect the Law and our great men and women in Blue. Thank you!”
Meanwhile, on Friday, YouTube restored Trump’s account.
Taking to Twitter, a Youtube insider said, “Starting today, the Donald John Trump channel is no longer restricted and can upload new content. We carefully evaluated the continued risk of real-world violence, while balancing the chance for voters to hear equally from major national candidates in the run-up to an election.”
“This channel will continue to be subject to our policies, just like any other channel on YouTube,” YouTube added.
© Thomson Reuters 2023
Twitter’s Duty to Provide Details of Account Holders, Government Tells Karnataka HC; Cites ‘Dangerous’ Tweets
By Press Trust of India | Updated: 17 March 2023
The union government has informed the High Court of Karnataka that being a significant intermediary, micro blogging site Twitter has additional responsibility, and it was its duty “to provide details of account holders”.
Additional Solicitor General R Sankaranarayanan who appeared for the central government, gave the examples of “dangerous” tweets that “is going to affect the integrity, sovereignty of India or is going to create a public (dis) order; then naturally we will step in and either we will issue a takedown notice, or we will say block the account.” The ASG cited “somebody gives a tweet under the assumed name of Government of Pakistan about India Occupied Kashmir, somebody says (V) Prabhakaran (LTTE leader) is a hero, and he is coming back. All this is so dangerous that it is going to incite violence.” Twitter approached the HC in June 2022 against the take-down orders issued by the Ministry of Electronics and Information Technology (MeitY).
Twitter claims the government is required to issue notice to the owners of the twitter handles whose accounts are blocked. Twitter has also claimed that the government has even prevented it from informing the account holders whose accounts have been ordered to be blocked.
The ASG also submitted to the court that Twitter cannot take protection under Section 79 of the Information Technology Act which exempts social media intermediaries in certain cases. Twitter was bound to follow the directions of the authorities designated by the government, he submitted.
The ASG said that according to Rule 4 of IT Rules 2021, Twitter was required to provide details required by the government. “It is very difficult for a government to monitor and do it, to the extent it does, it requires support,” he said.
According to the ASG, “The doctrine of proportionality has undergone a lot of change consistent with the change in societal values. After the Anuradha Bhasin case the intermediary guidelines were also framed.” “Rule 3 of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, the due diligence by an intermediary is necessary. Twitter being a significant social media intermediary, it is the duty of the intermediary to provide details of the account holder,” the ASG told the court.
Justice Krishna S Dixit asked the ASG, “What is meant by significant intermediary?” To which the ASG replied that it depended on the volume of traffic on the site. “It is the number of users. The volume. As per Rule 2(1)(v) Significant Social media intermediaries having number of registered users in India above such threshold as notified by the Central Government,” he said.
“…. It is the duty of the intermediary to provide the origin (of tweet). Rule 4 mandates that he must give it . Therefore, the argument must fall flat,” the ASG said.
During a hearing on February 6, the government had told the HC that Twitter being a foreign entity cannot claim protection under Article 19 of the Constitution.
“They are not entitled to protection under Article 19, as it is a foreign body, corporate and foreign entity. Under Article 14, there is nothing arbitrary and section 69 (A) has been properly followed. Moreover, failure to give notice to an account holder is not a factor which would vitiate the entire proceedings. Therefore, they are not entitled to any relief,” the Court was told.
The Single-Judge Bench of Justice Dixit who heard the arguments on Thursday adjourned the hearing to April 10.
ED Files Charge Sheet Against Razorpay, Fintech Firms in Money Laundering Probe Linked to Chinese Loan Apps
By Press Trust of India | Updated: 17 March 2023
The Enforcement Directorate Friday said it has filed a charge sheet against payment gateway Razorpay, three fintech companies controlled by Chinese nationals and as many NBFCs and some others in a money laundering probe linked to Chinese loan apps which allegedly cheated numerous people.
The federal probe agency said in a statement that the special Prevention of Money Laundering Act (PMLA) court based in Bengaluru has taken cognisance of the prosecution complaint (chargesheet).
A total of seven entities and five individuals have been named as accused in the charge sheet.
The accused entities include fintech companies Mad Elephant Network Technology Private Limited, Baryonyx Technology Private Limited and Cloud Atlas Future Technology Private Limited which are “controlled” by the Chinese nationals and three non-banking financial companies (NBFCs) registered with RBI named X10 Financial Services Private Limited, Track Fin-ed Private Limited and Jamnadas Morarjee Finance Private Limited.
Payment gateway Razorpay Software Private Limited has also been named in the charge sheet as an accused, the agency said.
The money laundering case of the ED stems from multiple FIRs of the Bengaluru Police CID which were filed based on complaints received from various customers who had availed loans and “faced harassment” from the recovery agent of these money-lending companies.
According to the ED, the probe found that fintech companies had “agreement with respective NBFCs for disbursement of loans through digital lending apps”.
“The money-lending business was being illegally run by these fintech companies actually and these NBFCs knowingly let these firms use their names for the sake of getting commission without being careful about their conduct. The same is also a violation of the fair practices code of the Reserve Bank of India,” the agency said.
The agency earlier had issued two provisional attachment orders to freeze Rs 77.25 crore worth funds kept in bank accounts and payment gateways which was later confirmed by the Adjudicating Authority of the PMLA.
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