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For the past few weeks, the Trump administration has been slowly working to implement a “clean network” through an executive order that will rid the Americans of any Chinese-made applications or programs. One of the targets of this order is TikTok (owned by parent company ByteDance).
According to President Trump, TikTok will be allowed to operate once they sell the application to Americans, and all this should happen in 45 days only. The first choice/ candidate as a buyer is Microsoft, but it’s still unclear how much they would spend on the famous application and how they would execute the overall strategy to retain TikTok.
If Microsoft does decide to purchase the said app, it could cost approximately $30 billion. However, many are also looking into the possibility of Netflix being the one to acquire TikTok. Besides having the means to do so, they no longer have to think of TikTok as a potential threat or competition.
According to Reed Hastings, while Netflix is in a different category and area, TikTok is a “substitution threat.” He meant that because people love watching shorter videos, the popular app is a compelling way to attract more users instead of watching movies and TV shows.
With the setup that Netflix has nowadays for subscribing clients, it promises its users that there are no ads between movies or while watching. Experts say that when it deals with advertising, the company still has to incorporate them one way or another.
When they do get to buy TikTok, Netflix can continuously give users an ad-free experience. These two companies can start working side by side and improve at the same time. The perfect example is NBCUniversal and the streaming service, Peacock.
Although many potentials could happen for the Netflix-TikTok relationship, there are some drawbacks that many should consider. TikTok executives wish to retain their global status, which only caters to four countries. Netflix, on the other hand, wants to expand internationally further.
However, whatever drawbacks or downsides are present, Netflix should still buy TikTok if given a chance. The application is one of the most popular and huge-earning programs worldwide. There’s a significant chance of growing the business in the next few years. Microsoft also sees a great opportunity with acquiring TikTok, but overall, whoever gets to buy the app is like having a lottery ticket that continues to win, even in the future.