Elon Musk’s recent guest appearance on audio chat app Clubhouse is potent PR for the social media start-up. By hitting every tech enthusiast’s favourite topics: Mars, memes, crypto and Robinhood, Mr Musk’s “room” — the Clubhouse term for groups participating in live events — reached capacity. Spillovers were created to let others listen in.
Is audio the future of online socialising? Perhaps. Chat app Discord has more than 300m users and Twitter is developing a Clubhouse-like voice product called Spaces. But California is littered with the remains of failed social networks. Friendster attracted millions of users when it launched in 2002. MySpace was once the most visited website in the US. Users deserted both. Even survivors can struggle. It took Twitter 12 years to report a quarterly net profit.
Clubhouse, still less than a year old, does look promising. Aping Facebook’s restricted initial membership model has created buzz and lowered the risk of technical problems. Making a product that appeals to venture capitalists who develop tech for a living saved on marketing.
Two challenges remain: hitting the mainstream and monetisation. The first is going well. By making invites easier to obtain, membership has more than doubled since the end of 2020 to 2m “weekly active users”, coinciding with a second round of funding led by venture firm Andreessen Horowitz at a reported $1bn valuation.
The second is harder. Moving away from exclusivity may put off early enthusiasts and makes moderation more difficult. But it is necessary if the company wants to transform hype into money.
Clubhouse has no adverts and no fees. A $10-per-month Spotify-like subscription might generate $240m in annual revenue. But it is only feasible if Clubhouse can convince well-known names such as Mr Musk to keep appearing. The alternative is corporate events — less cool but more lucrative. Virtual events do not yet have the same pull as physical ones. Moving online has meant events organiser Informa expects £1.7bn in revenue for 2020, down from £2.9bn the previous year. A buzzy start-up like Clubhouse might just raise their profile.
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