The clubhouse audio chat app logo on the App Store is displayed on a phone screen in this illustration photo taken in Poland on February 21, 2021.
Jakub Porzycki | NurPhoto | Getty Images
The Clubhouse audio app was all the rage earlier this year, but there are signs that the craze for it is slowly dissipating.
In February, Elon Musk, CEO of Tesla, and Mark Zuckerberg, CEO of Facebook, hopped into the clubhouse within days when the social chat app launched.
Even musk asked Russian President Vladimir Putin if he would like to join him for a conversation on the platform. Fast forward to today and some of the hype seems to be gone.
The invite-only iPhone app, which celebrated its first birthday last month, allows users to find and listen to conversations between groups of people. It was quickly adopted by Silicon Valley guys, and it was supported by the well-known venture capital company Andreessen Horowitz (whose co-founder talks about the app from time to time) in a funding round in January It was reportedly worth $ 1 billion.
On Sunday, Clubhouse confirmed Andreessen led a new Series C funding round after The Information was released the news on Friday. The latest round of investments, which includes new backers DST Global and Tiger Global Management, reportedly valued the company at $ 4 billion. However, investors appear to be more optimistic than many of the app’s users.
While some people were desperate for a clubhouse invite, some users who are already on the platform don’t see the long-term appeal. The clubhouse, founded by Paul Davison and Rohan Seth in April 2020, did not immediately respond to a CNBC request for comment.
“I think the initial FOMO of getting a clubhouse invite and trying it out is gone,” social media analyst Matt Navarra told CNBC.
One of the main reasons for Clubhouse is the lack of relevant conversations or rooms that users see when they open the app.
“I tried to get into it a little, but the only rooms I was shown were run by people who unironically call themselves ‘growth hackers,'” one user told CNBC, adding that it felt like it was as if social media managers had arrived before anyone else.
According to Navarra, the clubhouse’s challenge is “to make sure you discover lots of great rooms and speakers every time you open the app.”
He added, “The content quality problem becomes more and more difficult as more users are added and quality content is watered down. Much like when meerkat users saw endless boring live streams, Clubhouse is full of spam, scams and snake oil sellers.”
Timothy Armoo, executive director of Fanbytes, a company that helps brands promote through social video, told CNBC that “showing the right things to the right people at the right time” is a “tough problem” and it is is not scalable.
“The elitists have left the building. Marc Andreessen doesn’t do anything anymore. The attraction of Clubhouse was that you could almost overhear interesting convos of interesting people. What’s the point when the interesting people have left?”
Armoo noted that craze for the clubhouse is also waning, as people can now go outside as Covid restrictions are eased in countries like the UK and the US
Paul Davison, CEO of Clubhouse.
David Paul Morris | Bloomberg | Getty Images
Despite the initial fanfare, Clubhouse had only been downloaded 14.2 million times as of April 14th. This is based on data shared with CNBC by app tracking company App Annie. Now like social platforms Facebook, Instagram, YouTube and Twitter Billions of users.
According to a spokesman for App Annie, downloads in the clubhouse have stabilized. “As with most app launches, there is always a huge download for the first few weeks and it tapers off,” she said.
For comparison: TikTok was downloaded 500 million times in the five months leading up to April 2020. according to app analysis company Sensor Tower. Elsewhere, the augmented reality mobile game Pokemon Go was downloaded over 500 million times within a few months of its launch. according to the research company Statista.
Some clubhouse users who arrange events in the app have started looking for alternative options.
Sara Essa, the founder of Sustainability Hub, which hosts several weekly clubhouse events for its 41,400 members, told CNBC that she was considering another platform.
“I’m trying to get my community off the platform and have our conversations elsewhere,” said Essa, who claims Sustainability Hub is the largest climate community in the clubhouse.
She said “people are leaving fast” because Clubhouse changed its algorithm and she accused the company of not listening to user feedback.
Finding a new platform is Essa’s “biggest hurdle right now,” but she is considering the online event app Hopin, which has one Valued at $ 5.65 billion despite being less than two years old. She is less interested in taking advantage of Twitter’s rival over Clubhouse, Twitter Spaces.
“Twitter Spaces wouldn’t work,” she said, adding that she’s not a huge fan of it. “A lot of people don’t use Twitter, so a lot of people get alienated.”
Meanwhile, Mike Butcher, editor-in-chief of tech news site TechCrunch and host of The Tech Media Weekly Wrap, left the clubhouse last month in favor of Twitter Spaces. The foray, however, was short-lived.
“Folks – I think we need to go back to our old clubhouse,” Butcher told speakers that he’d Twittered the show after hosting just two events on Twitter Spaces. “I’m totally ready to come back to Twitter Spaces at a later date when they’ve fixed the bugs and added Android, but there are a number of issues.”
Twitter Spaces crashed not only for Butcher’s speakers, but also for him, causing the entire show to fall out of thin air. “It ended the room!” Metzger told speakers during a live event. “Had to restart the whole room! Lost audience!”
He also criticized Twitter Spaces for: poor audio quality; the inability to “pre-book” or schedule a room making it difficult to advertise; and low attendance compared to the clubhouse. He got around 40-50 spaces on Twitter versus 150 plus on Clubhouse. Twitter did not immediately respond to a CNBC request for comment.
“It’s clear that the ‘shiny new effect’ wore off after a while at Clubhouse,” Butcher told CNBC. “There’s just so many random, poorly curated discussions people can have. That’s why I moved my regular show to Twitter Spaces to reach out about novelty given how mainstream Twitter is. Though we’re because of the experiment technical problems interrupted I think we’ll be back. The clubhouse has to climb out of its clique culture to be successful. “
Earlier this month, Bloomberg reported that Twitter was too Purchase of a clubhouse for around $ 4 billion. It came a few days after Bloomberg reported it was a clubhouse in fundraising talks from investors in a round that would value the deal at around $ 4 billion.
And there could be more competition along the way.
Reports suggest Facebook is working on his own clubhouse competitor. Screenshots released by TechCrunch in March suggest it is Facebook’s audio product an extension of the existing Facebook messenger rooms as opposed to a standalone app.
Meanwhile, LinkedIn, Slack and Spotify are also reportedly working on competing products.
Tech analyst Benedict Evans, a former partner at venture company Andreessen Horowitz, told CNBC that “drop-in audio chat” may be used everywhere, as “stories” are now ubiquitous on social media platforms.
“But the network you add them on isn’t interchangeable, and the mechanics of linking them may be more important than the format – that’s why TikTok works,” he said via email.
“Facebook could add ‘everything’ to ‘Stories’, but they can’t add ‘TikToks’ (AKA Reels) to everything because it’s about the consumption model and network, not ‘short-form portrait videos’. The same is true.” true) for audio chat – the point is how you do it and what network you connect it to, not just live audio. It’s like saying, “Facebook adds status updates so Twitter is dead” – the point is the network. ”