By Laura Forman
Facebook puts its money where your mouth is. I hope you spend a lot of your own in return.
The Clubhouse social audio network has only 35 employees and, in less than three months this year, has increased its estimate from 1 to a staggering $ 4 billion, according to PitchBook. So, in terms of sound, imagine what a company with more than 58,000 employees and almost half of the world’s population that already uses existing platforms can do.
Facebook wants to know that, of course. On Monday, the social media giant said it would launch a series of new audio features, including a competitor’s Clubhouse in Live Audio Rooms that should be available to everyone in the Facebook app by the summer.
Facebook says it will test its audio rooms in Groups, where the company hopes to be able to visually do what the Groups have done for its platform: bring together a concentrated group of people with similar interests. Facebook says it has 1.8 billion people using the Groups each month – 64% of the total monthly users in its legacy Blue app.
In theory, audio networks could be even more popular. A few years ago, texting became a new phone call, offering the ability to perform multiple tasks. But we seem to be full circle with the proliferation of audio apps as potential next frontiers of social media that can be consumed anywhere, anytime, from the corner of the street to your kitchen.
Just considering the growth of the Clubhouse this year, the potential is promising. Launched last year, Clubhouse was not available in the iOS app store until September. But in February alone, 10.1 million downloads were recorded, according to Sensor Tower. For some, the concept of social sound is an appealing antidote to zooming and takes advantage of extra time due to more flexible work situations.
Recent data suggests that Clubhouse’s reach may have exceeded the number: takeovers in March were just 1.7 million. This could be because audio rooms have limited appeal or because vaccinated consumers are starting to separate from social media. It is more likely that this is more related to the fact that most people still do not know about the application. As of March, 83% of adult Americans have either heard nothing or not much about the Clubhouse, the eMarketer reports, citing Axios and SurveyMonkey.
For Facebook, it makes an opportunity. Twitter has tested its own audio chat rooms called Spaces over the past few months. But with its apps used by so many more people, Facebook is in a unique position to bring Silicon Valley media to the global Main Street. According to a CivicScience report, 41% of adults between the ages of 35 and 54 already listen to live streaming audio content, illustrating the growing market opportunity for more audio content.
As for early monetization, Facebook says it will start by offering listeners the ability to purchase “stars” that they can share with their favorite creators. The company says it will pay its creators based on the stars they receive. Later, Facebook plans to offer users the ability to pay for premium content with individual purchases or subscriptions. These strategies are similar to those Twitter allegedly follows, such as tip jars and paid super companions for some of their own products, some of which are audio.
Ultimately, Facebook seems to be the best opportunity to monetize audio rooms through data that neither Twitter nor Clubhouse can measure. By launching audio rooms through its platforms, Facebook can preserve a cost-free and ad-free experience for many of its users, as it has done with Groups. This will help him expand his followers, driving the largest possible amount of user information.
That point in particular could be particularly crucial as Apple’s iOS changes this year are likely to lead to less overall data exchange. For most users, the audio social opportunity will present a fun new way to learn and connect with a community of like-minded people about their favorite topics. For Facebook, this will be another way for users to further identify themselves through concentrated interests.
This does not mean that the new opportunity will surely be a dunk. Consider Facebook’s rush to live video chat in groups and to have fun, and none of them seem to have slowed down existing leaders in those areas. The difference here may be that Zoom Video Communications and Match Group were founded and widely used by the time Facebook came on the scene, while Clubhouse is still little known outside the tech scene – a small, albeit influential group.
If you’ve been lured into a Facebook Live Audio Room with no ads through the Group in a few months, don’t be too surprised to see that your Facebook newsfeed is filled with ads based on any topic that brought you there.
Write to Laura Forman at [email protected]
(END) Dow Jones Newswires
April 22, 2021 07:14 ET (11:14 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.