YouTube is reportedly planning to launch a new mobile app feature called Shorts to take on Chinese juggernaut TikTok. The Information broke the news regarding the Alphabet subsidiary’s schedule, which includes a product launch before the year’s end.
The video-sharing site’s competitive efforts are well-timed as another recent report indicates the ByteDance company wants to expand its presence in YouTube’s home market.
Shorts will reportedly feature an interface that showcases a slew of short videos made by YouTube creators. The mobile app add-on will also have an editing tool that lets users pair their clips with the platform’s licensed music catalog.
Why YouTube Decided to Take on TikTok
YouTube’s leaders made the decision to directly engage with TikTok because of its rival’s mounting popularity in the United States.
Mobile data analytics firm SensorTower states TikTok racked up an astounding 842 million first-time installations from March 2019 to March 2020, a year-over-year increase of 15 percent. Comparatively, YouTube saw 280 million initial sign-ups during the same timeframe, an annual decline of 2 percent.
Besides, the Chinese social network has experienced a popularity surge as the coronavirus pandemic has prompted widespread self-isolation. SensorTower reports TikTok received 111 million first-time installations last month, an increase of 11 percent from February. The app has also seen a significant uptick in revenue generation that likely garnered YouTube’s attention.
In 2019, TikTok made $177 million from in-app purchases, which is five times more than it took in the previous year.
TikTok’s Ambitious Roadmap
Like any ambitious company, TikTok isn’t content to rest on its laurels during a growth period. According to The Information, ByteDance has developed a strategy to bring in 10 billion yuan ($1.41 billion) in international revenue based around the app.
The company’s executives want to attract international sponsors by adding educational content to the platform’s offerings. Indeed, the firm could easily achieve its earnings targets if it became an established marketing channel in America.
In February, Alphabet revealed YouTube made a staggering $15 billion from advertising revenue last year.
However, ByteDance won’t have an easy time transforming TikTok into a trusted information source. At present, U.S. users view the platform as an entertaining time-waster that’s rich in funny clips but light on substance. The service has also earned a reputation as a host for gross-out influencer stunts during the coronavirus pandemic that could hurt its reputation.
Besides, the Chinese corporation is facing other challenges on its path to making the app a top American mobile brand. Late last year, the U.S. Department of the Treasury launched a national security investigation into TikTok because it bought a local company to break into the U.S. market. Also, two Congressmen have expressed concerns about the app’s user data getting into the hands of the Chinese government.
In addition, extremely well-funded video streaming service Quibi is launching on April 6 in the U.S. The platform features a wealth of star-studded short-form content representing a host of different genres. Because of its large advertising spend and premium programming, the app might turn into the public’s new brief video obsession.
If that happens, TikTok could experience a steep drop off in usage that would upset ByteDance but delight YouTube.