If We Ban TikTok, Where Does It End?

Will the very real and on-going discussions and policy-creation over concerns around the potential of TikTok sharing data with the Chinese government have ramifications that go far beyond a silly, time-wasting video app? The implications for Chinese television manufacturers who use ACR (automated content recognition) data to collect data about every single piece of content that goes through the glass of the TV are enormous.

If you have been to CES at any point in time over the past four decades, you know the prominence that television sets have had for decades. In fact, the Central Hall floor is a great retrospective on the geo-dynamics of the industry. In the '70s the leading TV manufacturers were based in the USA: RCA, Magnavox and Packard Bell. In the '80s the show floor and subsequent consumer demand for televisions turned to the Japanese brands: Sony, Panasonic, Sanyo, JVC and Sharp. These brands dominated until the '90s when new entrants from South Korea, Samsung and GoldStar (subsequently renamed LG in 1995), began to appear, targeting the lower end of the TV market. By the early 2000s, with both innovating and gaining a reputation for high quality, these Korean brands began to dominate the TV sales market. In addition, they became the two "must-sees" of Central Hall -- the backbone of CES -- by diversifying their product offerings into mobile, laptops, connected and smart appliances, robotics and more. Samsung and LG still dominate the television market with a combined global market share of 48.9% overall, which is even higher when you look at the premium end of the market.

Around 2010, a new group of Chinese-manufactured televisions began to find their way onto the show floor, albeit in the back and not always in Central Hall. Brands like Huawei, TCL, Hisense, Haier, Xiaomi and Skyworth -- all Chinese-based companies -- followed the playbook started by Samsung in its early years with lower-market targets and often built on a Roku or Android TV OS.
More recently, Comcast partnered with Hisense to embed their Xfinity Flex OS into the set. These televisions, sold primarily in the U.S. at Walmart, Costco and Sam's Club, have improved in quality year over year. While maybe not quite at the premium status of Samsung, Sony, or LG, and, perhaps more likely to be the secondary or tertiary set in a household, they have found a mass audience.

If the CES Central Hall can truly be viewed as a geo-political historical map, then China as the next chapter is here. These manufacturers are no longer in some obscure corner of Central Hall. Not only are they front and center, when it comes to showcasing televisions, in 2023, they were exponentially larger than Samsung and LG.

According to just-released 2023 forecasts from the Consumer Tech Association, U.S. TV sales, which hovered around 40mm per year prior to the pandemic and peaked with sales in 2020 of 49.5mm and 46.5mm in 2021, are now back to pre-pandemic levels, with CTA predicting sales of 39.4mm in 2023 and 40.3mm in 2024. Globally, an estimated 217mm televisions are sold each year.

The market share of Chinese-manufactured TVs sold has been growing steadily, with one estimate placing it at 27 percent of sales in 2022. Hisense shipped 19.6mm TV sets globally in July 2022. TCL was on a similar track stating that it had sold 10.15mm TV sets globally by mid-year.

A leading data privacy compliance expert with whom I recently spoke summed it up best when it comes to privacy concerns: "We've been so focused on the device in our pocket (the smartphone), that we've forgotten about the device on our wall." As the television morphs from an almost exclusive passive-viewing, "couch potato" device into an interactive home management and communications hub, the data produced can read when and where we work out, view who is outside our home on our smart doorbell apps, monitor when and how we engage in e-commerce, control the temperature of our home, and manage our in-home security. That's in addition to "knowing" who is viewing which shows, playing which videogames and watching what type of content. While the TV is still, for all intent and purposes, a HH multi-user viewing device, manufacturers continue to improve ways to get down to the individual profile.

There was a time, not very long ago, that we would not think twice about that type of data being shared with China as any more of a concern than data being shared overall. Unfortunately, in the Xi Jinping era, with the tension around Taiwan continuing to grow and China's alignment with Russia around the Ukraine war, the reality of geo-politics is a real and serious factor. This is our new reality. If the U.S. government believes TikTok to be a "national security risk or concern" as several prominent officials, including FBI Director Christopher Wray, have stated, then they should not be singling out one app, albeit a very popular one. In the interest of consistency, they must look at any Chinese-manufactured device that collects data, including the quickly growing adoption of Chinese manufactured televisions in the U.S.

If the history of the CES floor is an indicator, then the road to Chinese dominance in television hardware is well on its way to becoming a reality. If policy or regulation around this is going to happen, it should be starting now.

But Wait, That's Not All ...

To be clear, I am not trying to raise hysteria, but rather point out that as we navigate the new geo-political landscape in which we find ourselves, that we take it seriously and are consistent in policy. With the rapid advancement in the power of AI to analyze the petabytes of data being generated by television set usage and its likely ability to merge other datasets with that television data, we cannot afford to kick the can on this discussion.

For another perspective on China and data, please read this perspective from my colleague, ex-CIA analyst, Kent M. Harrington: Pogo, TikTok and Data Brokers: We Have Met the Enemy and He Is Us.

All comments are welcome and may be sent to the author at jeff@mediavillage.com.

Click the social buttons to share this story with colleagues and friends.
The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.