Wednesday, October 20, 2021

Instagram Threatens to Depart From Video App Over Tweets Showing Its Lack of Good Faith

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TikTok, the two-year-old app that can get teenagers and twentysomethings to self-soothe by uploading dance videos, is having a big moment. Just ask Drake and Chance the Rapper, who are both huge TikTok users, and signed up to the social media platform before Instagram even did. (Instagram says it hasn’t had any pressure to play nice with the app.) According to TechCrunch, big musicians such as Wiz Khalifa and Pharrell Williams could get a ton of cash if they want to make a big concert stop on the platform.

But not everyone is in love with the platform.

Sources told Business Insider that Instagram is threatening that it could abandon the platform if a proposed deal with Facebook isn’t approved. That’s where Drake’s baby got his start: The Canadian rapper got popular on TikTok’s stand-alone platform before tagging both Facebook and Instagram in his well-received 1-minute video.

Instagram and Facebook both run on advertising revenue. And with Facebook a mess, Instagram doesn’t want to have to suddenly cut revenue off to its ad giant if it doesn’t get the OK from Facebook and Messenger’s parent company, which currently has the final say over which apps will be a part of Facebook-owned properties.

Sources claim that Instagram rejected the proposed deal, which could have given the platform a great boost for its revenue stream and overall popularity.

But that could be for nothing if Instagram succeeds in convincing the TikTok team it should get out of the transaction.

The recent criticism is not exactly at first sight unusual. Instagram has been criticized for years for its alleged anti-competitive moves against its rivals, including Snapchat, and earlier this month, Instagram CEO Kevin Systrom revealed that Instagram’s own parent company, Facebook, was basically destroying the market by making its buying rivals with their technology and moving them over to the feed as competitors.

Loren Feldman, a former Google and Yahoo sales executive who is now CEO of Social Media Analytics, told me that Instagram is now acting so nefariously to include the company in its already-taxing business that its users “will simply get sick of being used as a brick in a tower of Doom for advertising and user data.”

A co-founder of TikTok, Kevin Thornton, vehemently denied the harsh claims of a conflict of interest in a statement to me, which you can read here.

He echoed his statement from a previous story, that the company is “running as a privately owned company” and is “not required by law to work with any other social media companies or from any of the major media companies,” and that the “contemporary social media model calls for transparency in how content is monetized and shared with our consumers.”

Here is his statement:

To many of you on TikTok, we are an important part of the media and entertainment culture of the app. The reality is the process that took shape for selling to a billion-dollar company, in a relatively young app, was not the one that was planned from the start. TikTok has never had a partnership in place with Instagram or any other social media platform, nor are we required by law to work with any other social media companies or from any of the major media companies. TikTok is a publically traded company, and the decision making process when it comes to potential partnerships requires continued conversations, allowing any given option to be implemented. We are running as a privately owned company, and are not required by law to work with any other social media companies or from any of the major media companies. TikTok has never had a partnership in place with Instagram or any other social media platform, nor are we required by law to work with any other social media companies or from any of the major media companies. We are very proud of the way we have run the company, and having such an incredible amount of happy fans and artists on our platform is the testament to the work that we have put into building TikTok, and the results we have already achieved. We are not and never have been against doing business with a media company, and if the right partnership opportunity comes along and we can partner with a creative and innovative company, then of course we will consider that. In the meantime, we are excited for what the future has in store for TikTok, and will continue to focus on our biggest dreams.

Josh Frigerio is founder and CEO of Chris Devito and Partners

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