Is Clubhouse On It's Way Out?

Is Clubhouse On Its Way Out?

Is Clubhouse On It's Way Out?

This post was originally published by Forbes on May 5, 2021

It’s hard to scroll through social feeds or the news today without being hit with more information on Clubhouse, the hot new app (now also available on Android devices as of this month) that features audio-only rooms that allow people to chat about shared interests. Recently TechCrunch reported that Clubhouse closed a funding round that values the company at an astonishing $4 billion, which is three times higher than its valuation in January. 

Despite all the hoopla and money chasing the trend, I suggest that Clubhouse could be on its way to the proverbial grave in the next 12 months, especially given recent data shows that downloads have plummeted. Clubhouse reminds me of Meerkat and Periscope, two live-video streaming apps launched in 2015.

Because of these two apps, live streaming was suddenly everywhere. We even streamed the launch of our influencer marketing company live on Meerkat at SXSW in 2015. It all felt very cutting-edge. We wondered which site would be the dominant player in this new arena.

Today, neither Meerkat nor Periscope lives on. What replaced them? Facebook Live. Live broadcasts on Instagram. Live video on Twitter. LinkedIn Live. YouTube Live. Even Zoom. Twitch was already 4 years old at the time, but it has boomed. Live streaming is everywhere. It’s hard to imagine a time when you couldn’t go live on these social channels, even though it was just a few years ago.

I think Clubhouse is in the same situation that Meerkat and Periscope were. It has a relatively small audience right now, reported at just 10 million weekly active users in February. Nearly 185 times that number use Facebook every day.

And now that social audio has been proven to be interesting, it probably won’t take long at all for many of the major players in the space to add this feature. In fact, we already see Twitter Spaces and Facebook Rooms coming to life. LinkedIn isn’t sitting out either, and business conversations make a lot of sense. Even Spotify, which has invested a fortune in its podcast platform, is entering the space.

When all of these options for audio rooms fully open, what’s the appeal of Clubhouse? The company has already indicated it will take months to launch on Android. Before that happens, audio rooms could be available to billions of users on all sorts of devices, via apps they already log into daily on desktop and mobile.

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From what I’ve seen, Clubhouse seems to be betting on getting elite audio talent to differentiate itself. In mid-March, the company announced an accelerator program to help teach “creators” how to monetize their shows on the app. And if the best conversations happen on the app, that could be a compelling distinction. 

Then, in early April, Clubhouse announced that it was beginning to roll out Payments that allow these same creators on the platform to receive compensation. In a sign that the company wants the creators to feel valued, Clubhouse has arranged for 100% of the payments to go to them. The donor pays the Stripe processing costs and Clubhouse won’t take any of the money for itself.

While I think these are smart moves, they are years behind the monetization opportunities already available to creators on Facebook, Instagram and many other places. I suspect it won’t be enough to keep creators if the audience flows back to their current social networks.

Given all this, I’m willing to make a handshake bet that Clubhouse, as we know it, won’t last more than 12 months. The funds the company raised recently could keep the lights on for a while, but I think that the lion’s share of audio-only interaction will be occurring on other platforms by the second quarter of 2022.

If you believe that your brand is in a position to participate in interesting audio-only conversations, by all means, get your feet wet with Clubhouse. But as you learn, separate out those lessons that apply to social audio generally from those that apply to Clubhouse specifically. That way, if my conclusion about the viability of Clubhouse is correct, you won’t have wasted effort by beginning your learning in this area.

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