TikTok and its parent Bytedance have been riding high lately, having a hand in launching multiple worldwide hits while posting revenues of over $17 billion, not to mention more than $3 billion in net profit. The company also made a big splash last week, announcing that it entered into a 10 year agreement to lease 232,000 square feet of office space in New York’s Times Square. Bytedance has even tried to distance itself from its Chinese origins by incorporating in the Cayman Islands, although the company is still reportedly governed by Chinese cybersecurity laws.
While that all points to an upward trajectory for the company, another very similar video app to TikTok is suddenly making a lot of noise – Zynn.
The app seems like a TikTok knock-off, if you look at the app’s features in its description:
- Discover spontaneous and exciting short-form videos
- Create fancy 15 seconds videos with massive music library, cool stickers and funny effects
- Share wonderful moments to Instagram, Snapchat and etc.
- Connect to like-minded people from the globe, embrace your community
Sound familiar? Why then, does the world need another TikTok?
It turns out that Zynn, which is now popular enough to become the most downloaded free app in the App Store, has its own secret sauce, which is the ability for users to make money using the app. You earn rewards by watching videos on Zynn and inviting friends to the app, which can then be used to make purchases inside the app. These include gift cards for the App Store, Walmart, and Amazon, or funds directly transferred to the user’s PayPal account.
But there’s more going on behind the scenes here. Zynn is apparently owned by Kuaishou, which is a competitor to Bytedance in China. Take a closer look and you’ll find that the company reportedly received $2 billion from Tencent in December. Tencent is Bytedance’s biggest rival, and it’s also slowly becoming a major factor in the Western music business, with an early stage investment in Spotify and now reportedly is looking to invest some $200 million into Warner Music. Zynn is another piece of the puzzle that it’s putting together.
The video platform could be an essential part of the Tencent strategy though, since TikTok has come on so strong in the last year, especially in the West. It’s become influential enough in creating hits that most record labels now pay it much more attention, even at the expense of the current top 5 social networks. The rise of Zynn could change the balance of power in the short-form video space, and right now any change in marketshare would be considered another small victory for Tencent.
That being said, the app might not have such smooth sailing in the West, especially in the United States. It’s probably just a matter of time before regulators begin to look at the rewards system that Zynn has in place to see if it can be considered a sort of pyramid scheme.
Of course, TikTok has also drawn the attention of the Feds as well because of its connection with the Chinese government. Even Bytedance’s corporate relocation to Grand Cayman and presence in New York City may not be enough to escape an investigation.
But maybe the most surprising thing of all is that we all thought that short-form videos had seen their day after the demise of Vine. TikTok proved that notion to be wrong, and now Zynn may be the ultimate vindication of the format.
Source: Forbes Business