Wall Street Analysts: China's TikTok Is 'Crack Cocaine' that Could 'Ruin' the Internet

Top Wall Street analysts recently stated that they could only think of one comparison to TikTok in terms of its addictive nature — crack cocaine. According to Wall Street, Communist China’s TikTok could “ruin” the internet.

Business Insider reports that China’s TikTok has become so popular and addictive that the only comparison to it is crack cocaine. Analysts at Bernstein Research wrote that with over one billion monthly users in just five years, the short-form video app has replaced “the friction of deciding what to watch and ‘boring’ status update images” with a “sensory rush of bite-sized videos powered by a Chinese-owned, black-box algorithm.”

Malika, a crack addict lights a pipe at Stalingrad Square, nicknamed Stalincrack, on December 2, 2020 in Paris. - This "drug of the poor" has been wreaking havoc in the north-east of the capital for thirty years. Over the past 18 months, the authorities have been stepping up initiatives to try to curb the use of this smokable derivative of cocaine: reinforced police patrols, arrests of traffickers, accommodation for drug addicts but these efforts have so far been largely unsuccessful.

Malika, a crack addict lights a pipe at Stalingrad Square, nicknamed Stalincrack, on December 2, 2020 in Paris. (Photo by JOEL SAGET / AFP)

Shouzi Chew, chief executive officer of TikTok Inc. Photographer: Christopher Goodney/Bloomberg

The analysts said: “The algorithm pushed the most viral content directly to the user delivering endorphin hit after hit with each swipe. Cocaine’s effects take time to set in, while Crack’s effect is instantaneous but wears off quickly driving the user to seek another ‘hit.’ Crack is incredibly addictive.”

Other major platforms including Facebook have rushed to compete with the app, creating a “digital crack epidemic,” according to a note by analysts titled “Has TikTok Ruined the Internet?” Despite advertisers failing to effectively monetize short-form video, it’s where users are placing most of their attention.

TikTok is poised to take in 16 percent of global digital ad spending this year and Facebook says that its Reels features account for 25 percent of the total time spent on Instagram. One key issue that advertisers have failed to determine is how to make direct response ads that encourage a user to take an action like clicking a link or signing up for something work in short-form video format.

Analysts warned that if companies like TikTok can’t figure out how to make direct response ads work “the consequences could be severe.” They added: “What if there’s something more deprecatory taking place ruining advertiser economics, creator art, and consumer attention spans along the way… all desperate for that next 15 second hit.”

Wall Street Analysts: China’s TikTok Is ‘Crack Cocaine’ that Could ‘Ruin’ the Internet

COMMENTS