"Ultimately, TikTok's ambitions toward disruption may be less than we had thought," writes Evercore ISI's Kevin Rippey.
With Chinese conglomerate ByteDance's fast-growing social media app TikTok naming Kevin Mayer, the Disney executive who oversaw the launch of streaming service Disney+, its new CEO late Monday, Wall Street analysts weighed in on the appointment and what it means for the broader sector.
Less than three years old, TikTok has been on the rise and aided by the novel coronavirus pandemic, surpassing 2 billion worldwide downloads in March. Mayer also will serve as COO of ByteDance.
"We likely gained some valuable insight about the strategic ambitions of TikTok by way of the company’s new CEO hire," Evercore ISI analyst Kevin Rippey wrote in a Monday evening report. "Ultimately, we think TikTok naming a well-tenured Disney executive as its CEO speaks more to a company looking to join the ranks of the media establishment rather than break them."
He continued: "Ultimately, TikTok’s ambitions toward disruption may be less than we had thought. While we’re sure Mr. Mayer is an extraordinarily talented operator and exceptional executive – to this point – true disruption in consumer internet has not come by way of the media establishment."
Calling Mayer "the ultimate established media executive," the analyst said "it’s fair to say that Mr. Mayer would be at the top of the list for new CEO wish lists in digital media." And he argued that TikTok was "likely to need a CEO capable of navigating a myriad of issues related to collecting user data and being owned by ByteDance, a Chinese internet company."
But Rippey also emphasized that Mayer was "decidedly not the same age as TikTok’s average user." And he added: "At 58, Mr. Mayer is the oldest head of a major social media company."
Arguing that the executive's background was in monetizing curated international property, the analyst concluded: "Recall [Disney executive chairman] Bob Iger’s passed on buying Twitter in part due to his concerns over content moderation. As a long-running Iger protégé, Mr. Mayer’s experience seems to be well-suited to a managed ad sales-centric operation as opposed to be building a sprawling performance marketing infrastructure. Running a massive user-generated content apparatus also seems outside of his prior experience."
Rippey predicted that the CEO hire would "rekindle questions around traditional media companies’ interest in social platforms as strategic assets," writing: "Chalk it up to the failure of [Jeffrey Katzenberg's] Quibi, but once again, we see that scaled media platforms are hard to build. Maybe Mr. Mayer thinks he can do what Mr. Katzenberg couldn’t."
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May 19, 2020 at 06:14PM
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TikTok CEO Pick Shows Desire to Join Media Establishment: Analyst - Hollywood Reporter
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