Clubhouse, the elusive, exclusive audio-chat app has grabbed headlines globally over the first two months of 2021. Incredibly, it is still in a pre-launch, invite-only mode, is operable only on iOS and is not even a year old yet.
In May 2020, it had just around 1,500 users but since then, it has gone on to notch 2 million weekly active users in January 2021 and has reached and has reached a whopping 8.1 million global downloads as of February 16, 2021. Clubhouse could well become the first start up to achieve unicorn status while still in beta, riding on its meteoric growth this past month.
As per mobile-app analytics research firm App Annie, Clubhouse attained the No. 1 spot on Apple’s App Store in more than 30 countries this year, signalling that it is a more popularly downloaded app ahead of Instagram, TikTok, Zoom or WhatsApp in those markets.
To take a closer look at this exponential growth, understand factors driving news & social media coverage and the participants in audio-chat industry landscape, NetBase Quid carried out a robust market research analysis.
Quid scanned close to 3,000 articles written about the Clubhouse app since its inception until 22nd February 2021. The narrative is dominated by articles that focus on the app’s hype & tout it as the “next big thing”. Clusters of news such as Elon Musk spurs Bitcoin rise, Elon Musk discusses brain-chips, SpaceX make strong contributions to the coverage followed by China blocking the Clubhouse app. Quid’s clustering, based on semantic similarity among the articles in the network, reveals a host of interesting topics and emerging trends.
We discover that both Twitter and Facebook are making efforts to stave off the rise of Clubhouse by coming up with their own products. In December 2020, Twitter started testing ‘Spaces’, an audio-enabled chatroom within Twitter which has been widely compared to Clubhouse and earlier in February 2021, it increased its beta participants capacity from 1000 users to 3000 users. According to The New York Times, Facebook, the social network which has a notorious history of cloning its competitors, is also working on its own equivalent of Clubhouse. American billionaire entrepreneur Mark Cuban is also jumping on the audio and podcasting bandwagon and is launching ‘Fireside’, a “next-gen podcast platform” that facilitates live conversation.
In the thick of these larger clusters, we find a small section focusing on Indian alternatives to Clubhouse. An India-based live discussion app named Leher is now in the spotlight with the buzz around Clubhouse. Unlike Clubhouse or Twitter Spaces, Leher has both Audio and Video club rooms and it doesn’t require any special invitation to join. Leher’s biggest advantage, over Clubhouse, is its availability for Android and iOS devices whereas Clubhouse is iOS-only as of now.
Clubhouse for Brand Marketing
While Clubhouse does not offer any in-app advertising functionality yet, the app’s rapid growth has raised a question about its viability for being the next big social media platform for brands. A section within the narrative touches upon the potential of this boom to lend itself to PR and communications.
In a world plagued with Covid-19 and restrictions on travel, Clubhouse could be filling the void for networking events as new product developers or brand ambassadors could simply create a room on the app and engage in an intimate conversation at scale. Audio platforms are a fit for brands that are linked to a hobby or a passion, such as tech brands that could sponsor exclusive events discussing a new product or technology, Bret Werner, president of MWWPR explains.
Clubhouse allows users to create groups, a feature that has been leveraged by brands like Patreon and venture capital firm Andreessen Horowitz. In one “shoot your shot” Clubhouse room, where users try to win a date on the audio platform, Slice tapped an opportunity to partner with the hosts and send pizzas to those who failed to win a date.
Another day saw the Kool-Aid Man (official mascot for flavored drink mix brand Kool-Aid) pop up in a Clubhouse room alongside entrepreneurship evangelist Gary Vaynerchuk and Los Angeles Dodgers third baseman Justin Turner, among others. The Kool-Aid Man’s arrival did not go unnoticed as Will Cady, Reddit’s head of creative strategy who tweeted, “brands have entered the chat.”
Jack Dorsey’s Square-owned Cash App sponsored a giveaway program with the Black Bitcoin Billionaires, the biggest crypto-focused group on Clubhouse, to increase awareness and use of crypto in wealth creation. “Clubhouse presents a huge opportunity for brands. If your employees are engaged, informed and feel valued, they can be powerful, trusted advocates in these online spaces,” says Robyn Hannah, senior director of global communications for Dynamic Signal.
It is worth noting that Clubhouse is looking to begin tests that will see creators paid directly via tipping, ticketing or subscription fees and launch a Creator Grant Program to support emerging creators on the platform. This could shape how KOLs, creators, influencers and brand ambassadors go about storytelling and marketing efforts on the app.
Speaking of KOLs, Elon Musk has had a significant role to play in Clubhouse’s virality:
Elon Musk, the front-running Key Opinion Leader, has had a heavy influence on the app’s advent. From April 2020 through January 2021, the Tesla CEO had soft co-mentions in articles focusing on the app. However, when he officially participated on the app the numbers simply skyrocketed as displayed in the timeline chart above. Musk announced his Clubhouse arrival on Twitter and in that interview, he touched upon everything from aliens to memes and the COVID vaccine.
The traction scatterplot above paints a very insightful picture – news articles of Meek Mill’s Clubhouse rant garnered the highest social engagement on average, but their publishing average was towards the lower end of the spectrum.
The cluster pertaining to Thai Government’s warning to protesters using Clubhouse received ample attention from the media who published it extensively, and the cluster also generated noteworthy buzz online.
Thuringian Prime Minister Bodo Ramelow’s found himself in a soup for stating that he was playing Candy Crush during deliberations with Chancellor Angela Merkel on the corona crisis. The cluster containing this pocket of news was published a lot by media houses. It also proved to be an inflexion inflection point that was followed by soaring of Clubhouse-related posts on social media, as seen in our social listening consumer exploration on NetBase below:
Consumer Sentiment Around Clubhouse
As we can see, mentions of Clubhouse were fairly flat on social media until an event on January 25 placed it firmly in the consumer spotlight. In the NetBase social media monitoring dashboard, we can click on this spike to reveal the specific driver and see which items feed this activity:
Consumer talk and emotion mirrors media love for the app, with primarily positive sentiment in both our top terms and top emotions, with “interesting” mentioned most:
Exploring the age range of participants attracted to Clubhouse, we see Millennials, followed by the older Gen Z crowd dominating here. And then Gen X and a solid showing of Boomers as well. The app is age restricted to 18+, but that’s apparently not keeping some of the social explorers under 18 away:
Possibly the most unexpected insight to uncover here is where consumers are talking about Clubhouse, beyond Twitter, which is entirely expected. The app allows two integrated connections – one to Twitter and one to Instagram, but we’re seeing the lion’s share of posts happening on Tumblr and Reddit:
Though for all the conversation about it, and there’s a good bit, it’s still very new – and making even Millennials feel old, because they “don’t get it”:
But companies sure do. Quid analyzed 336 companies to harness competitive intelligence and paint the landscape of the market that Clubhouse operates within it.
Company Dataset Intel
This ecosystem has largest participation within the social networking audio platforms segment. Alpha Exploration Co, the company that runs Clubhouse, is also a part of this cluster.
When we “Select Neighbors” of Alpha Exploration Co. (Clubhouse) within the Quid Companies network we discover 9 more companies whose business descriptions are most closely related to that of Alpha. Among these, 4 companies were founded in or after 2018 thereby indicating heavy expansion of audio-based social network applications in recent years – Hearshot was founded in 2018, Voizy in 2019 whereas Felix and Shortcast were founded in 2020 (same as Clubhouse).
Market Landscape Heatmap
The Quid Companies dataset also has a powerful view that allows us to compare market segments (clusters) to each other using market intelligence criteria such as investment, maturity, and growth. This can lay out a very efficient path for identifying market opportunities.
Following are the key takeaways for the above shown heatmap:
- High saturation as well as sharpest funding growth in the last 3 years among Social networking audio platforms –
- While 27 of these 92 companies have been founded since 2018, a large majority of the players have been in the business from before. Hence, there’s will be high competition in this segment within audio-only, voice-centric technologies and new entrants would have to come in with strong differentiators in order to win market share.
- 2020 saw Alpha Exploration Co. (Clubhouse) and Betty Labs (Locker Room) raising a cumulative $22.3M, while oVice and Dive drew investments totalling $1.2M. Hence, 2020 was a pivotal year for the companies within this cluster which only saw Quilt (a feminine-forward audio social network) raising $3.9M in 2018. The global pandemic that hit in 2020 coerced society into finding innovative ways of keeping in touch and that could have played a part in driving up the investments for this segment. Alpha Exploration Co. (Clubhouse) has also raised new funding in a Series B round (pegged at $100M) led by Andreessen Horowitz at a $1 billion post-money valuation in January 2021.
- Podcasting and AI/ML based applications present the youngest segments with 2017 being the median founding year for the 49 companies in those clusters. The Podcasting cluster houses 2016-incorporated Wondery, a company Amazon has just acquired, that creates and curates podcasts to connect wonderers and brands to a world of entertainment.
- On average, Voice/Speech recognition firms have attracted the highest value investments. One of the companies that has been a driving force in this segment is Mobvoi. It offers Chinese Smart Watch Operating System that features mobile intelligence voice search for iOS, Android, Android Wear, Google Glass, and WeChat. It develops technologies in Chinese language speech recognition, natural language processing, and vertical mobile search. Mobvoi raised $180 million in its Series D round of funding from Volkswagen Group China in 2017.
Making the Most of the Market
Overall, Clubhouse speaks to the future of social media – and of social media marketing, for a large segment of early adopter types. Will this take hold with the larger online population? That remains to be seen, as the fast-paced, “on stage” feel will not be for everyone. Companies seeking to reach consumers will need to carefully vet target audience sentiment and engagement before diving in, just as they would with any network. And other audio options, taking a less aggressive participation approach, will soon be on the way.
And from an investment/acquisition standpoint, this category is experiencing amazing growth and potential right now. Keeping a close eye on where Clubhouse lands once it moves beyond beta would be wise, as it will act a litmus test for the audio-chat market, and likely a strong point of departure from which other versions will launch.
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