By now, you might have already heard about Clubhouse, the audio-chat social media application that’s been making all the rounds on the internet. Clubhouse has been the fastest-growing social app since its launch in the spring of 2020.
In this post, we’ll discuss what the app is all about, how it generates revenue to keep itself afloat, and how to make money on Clubhouse as a user.
What is the Clubhouse App?
Its parent company describes the app as a new type of audio-based social product that allows people everywhere to talk, develop ideas, tell stories, deepen friendships, and meet interesting new people around the world.
Clubhouse offers rooms for conversations between two or more speakers. The moderators of this invite-only social app may allow an audience to join the conversation.
Moreover, the audience in attendance can “raise their hand” and ask for permission to participate in the audio chat room.
You can think of Clubhouse as listening to a live-streamed podcast on your phone. Only this time you have a chance to interact with the speakers.
The app allows you to listen to live conversations with other people. These folks can be famous, knowledgeable, or interesting individuals that want to be heard.
Originally, Clubhouse’s main rule is that the conversations will never be recorded and saved for future access. But this has changed when the company rolled out the Replay feature.
Here are some of the audio-only social media apps that directly compete with the Clubhouse app:
- Reddit Talk
- Telegram Voice Chats
- Discord Stage Channels
- Facebook Live Audio Rooms,
- Twitter Spaces
- Slack Huddles, and
- Spotify Greenroom
Clubhouse App: Who made it?
Co-founders Paul Davidson and Rohan Seth created Clubhouse in Fall 2019 as a social media startup. The invite-only chat app was originally named Talkshow and was designed for podcasts.
Clubhouse was rebranded and had its official release on the iOS platform in March 2020.
After receiving funding from investors, this audio-based social media app was valued at $100 million in May 2020. Also, Clubhouse got its funding from Andreessen Horowitz and other venture capitalists.
Some of Clubhouse’s notable investors include:
- Balaji Srinivasan (Coinbase)
- James Beshara (Tilt.com) and
- Ryan Hoover (Product Hunt)
This voice-only social media app gained popularity a few months after the covid-19 pandemic broke out. By December 2020, the Clubhouse app already had around 600,000 registered users.
In January 2021, the Clubhouse had an active weekly user base of around 2 million people according to its CEO, Paul Davidson. He also announced that the company will begin working on a new version designed for the Android platform.
In February 2021, the company hired Mopewa Ogundipe, a top Android software developer.
This meant that the development of the Android version had begun. And after a year since the app was released, it had over 10 million active users per week.
How does Clubhouse work?
Created by a duo of former Google engineers, Clubhouse is an audio-chat-based social media platform with distinctive features. It is an audio network that involves people engaging in real-time conversations with each other.
Users can listen to debates, interviews, and other interesting discussions that cover a wide range of topics such as:
- entrepreneurship, and
- marketing, etc.
It requires an audience and one or more speakers (or hosts) for a conversation to take place in a room. Also, some moderators may give the audience a chance to interact with the hosts.
Clubhouse was initially an invite-only social media app. But in July 2021, the founders announced that an invitation is no longer required to join chat room discussions.
Some of the main features of the app are rooms and clubs.
A room, or a real-time virtual chat room to be specific, is where a discussion can take place. Users communicate with each other through audio in a room.
Rooms are classified into varying levels of privacy.
- ‘Open rooms’ are created in a default setting. Anyone on the app can join an open room.
- ‘Social rooms’ are only for users that are followed by the moderators.
- ‘Closed rooms’ require users to get an invitation from a moderator.
There are 3 sections in a room, namely:
- ‘Followed by the speakers’ and
- ‘Others in the room’
When users create a room, they become moderators and have the power to invite other users. Additionally, they can mute users and remove speakers when necessary.
Initially, those who joined a room are assigned as “listeners”, in which there is no option to unmute themselves. Clicking on the “raise hand” icon will notify a moderator that a listener wants to enter the room and interact with the hosts.
A listener can exit a room by clicking on the “leave quietly” button.
On the other hand, clubs are groups of app users who share a common interest. A club can contain multiple rooms.
Within a club are 3 categories namely:
- Leader and
Admins can create/schedule types of rooms and modify club settings. Leaders are authorized to create/schedule open rooms that are branded by a club. Members can invite more people into the club and can also create private rooms.
Why is the Clubhouse app trending?
The Clubhouse app is not new. Since its launch in March 2020, it quickly became a popular social media platform.
But it was all of the hype by Elon Musk that led to Clubhouse’s exploding popularity. Musk tweeted that he’d be co-hosting a session with Robinhood co-founder and CEO Vladimir Tenev on the Clubhouse app. Overnight, Clubhouse became the most downloaded app on the iOS platform.
Who uses Clubhouse?
Celebrities seem to enjoy using the Clubhouse app.
Navigate through the application and you may hear famous people like Ashton Kutcher, Chris Rock, Oprah, Kevin Hart, or Drake. These celebrities may even host conversations, which are a big part of Clubhouse’s appeal.
With Clubhouse, the audience has the opportunity to listen, and may even participate in, candid conversations with celebrities.
To some people, networking may be the reason why this audio-based social application has become so popular these days. If you spend a lot of time on the app, you may find people formally slipping their goals and accomplishments into the conversation.
Clubhouse seems to focus more on celebrities. But lately, the founders also focused on a group of individuals that they consider as an elite clientele. And according to a New York Times report, Clubhouse has been wooing influencers into the platform.
What’s the controversy with Clubhouse?
The Clubhouse guidelines do not allow recording, sharing, reproduction, transcription of conversations without explicit permission. Nevertheless, this has led to instances of bullying, racism, and harassment that have occurred on the app. Moreover, several incidents of Islamophobia have also been reported.
Interestingly, Clubhouse is a haven for hate rallies like those spreading incel ideology, Islamophobia, Hinduphobia, and antisemitism.
How does the Clubhouse app make money?
In its early years, Clubhouse wasn’t earning any revenue. Initially, the company was focusing on the growth of its user base. With over $110 million in capital, the company has a lot of time focusing on more important matters rather than monetizing the app.
The Clubhouse Business Model
In April 2021, Clubhouse finally launched its payment option. This form of Clubhouse monetization enabled content creators to receive donations from their followers.
But unlike the Patreon business model, the Clubhouse founders decided not to take a cut or charge a percentage of each gift. This inspired creators to continue producing high-quality content. And, in turn, drew new users into the app.
Clubhouse Monetization Alternatives
Aside from the tips and donations, there are additional Clubhouse monetization alternatives including:
- Displaying ads
- Selling tickets to corporation-hosted offline events and
- Charging a fee to access premium material
Drawing More Influencers into the Clubhouse App
Recently, Clubhouse has been courting influencers to join the platform.
The founders understand how essential influencers are to app monetization. Influencers can help certain websites grow their audience or monetize through subscriptions, ads, and other revenue generation methods.
Clubhouse’s revenue generation strategy is much similar to that of Patreon. Content creators get funding directly from their audience. But what makes Clubhouse different from Patreon is that it doesn’t take a cut for every transaction,
The Clubhouse App Remains Free to Use
For now, Clubhouse is completely free to use. It does not contain ads or premium plans. Moreover, there is no option for users to purchase content directly from the app.
Clubhouse Funding and Valuation
In over 5 stages, Clubhouse has raised $110 million in venture capital funds. Currently, it has $4 billion in market capitalization. In April 2021, Clubhouse’s valuation occurred over a year after it was launched.
Clubhouse’s most notable investors are:
- Andreessen Horowitz
- Tiger Global Management and
- DST Global
As a privately held company, Clubhouse doesn’t have to disclose its revenue figures to the public.
Can you make money on the Clubhouse app?
Initially, the company has rolled out a Clubhouse monetization scheme, which is for US content creators on the iOS platform. This monetization feature is made possible through the payment processing firm, Stripe.
The funds from in-app payments will go directly to the content creator. And of course, a small portion of that goes to Stripe.
With regards to the Clubhouse monetization feature on the Android platform, it is reportedly in the works.
How to Make Money on Clubhouse
Apart from donations and tips, here are other ways you can earn money on Clubhouse:
Sponsorship is one of the widely-used business models in the age of social media. On the Clubhouse platform, it is also one of the main ways to earn money as a content creator.
We have seen businesses that are trying to sell a product seek out influencers on social media platforms. So there’s no reason they won’t do the same on Clubhouse.
Like YouTubers, a content creator on Clubhouse gets paid by mentioning a company’s product or service.
Interestingly, brands that are on this audio-based social network app want to do more than spend money on shoutouts.
Many of these brands are starting to pay entrepreneurs and influencers to create whole new chat rooms. These companies require the rooms to contain titles and descriptions dedicated to the brand.
Affiliate links are included as well. Affiliate marketing can be advantageous for both the people and the brands they work for.
2. Paid Rooms
People with a steadily growing audience will occasionally create Closed Clubhouse chat rooms at a profit.
For instance, a content creator who wants to start a new closed chat room will notify the listeners about it and get them to respond to the invitation in advance. Those who want to join must pay before the event date. After that, users can listen and interact on the day the closed chat room event goes live.
For extra exposure, some folks will even get celebrities to serve as moderators or make guest appearances. Many CEOs and high-profile speakers have been on this voice-only social media platform to talk about a wide range of topics.
3. Direct Contributions from Listeners
Many people on this voice-only social product would rather receive funds directly from their followers. In their user bio page, they may include links to crowdfunding sites like Patreon, or links to their CashApp or Venmo accounts.
However, this form of Clubhouse monetization may not be necessary soon. In April 2021, a new payment feature was introduced.
Clubhouse now has a feature called Payments, in which listeners can send money to their favorite speakers without relying on third-party payment apps and crowdfunding sites.
4. Creator First Program
Launched in March 2021 in the US and India, the Creator First Program is another initiative to assist content creators.
It’s an accelerator program aimed at providing a rising creator with resources to bring ideas to life and promote creativity. It is intended to help creators build their audience and allow their content to earn money with a direct payment system.
The different components of this program consist of:
- creative solutions
- promotions and
- financial support
The platform supports an emerging creator through the following:
- Providing specialized equipment that may help with content creation
- Creating opportunities for networking with content creators and potential guests
- Offering to develop ideas and resources for creativity with the Clubhouse team
The Creator First program also features methods to help creators get noticed, which include:
- audience development support
- promotional campaigns and
- creative design services
Finally, the platform provides creators a monthly stipend, which aims at helping with building relationships with brands and acquiring sponsorship deals.
5. Ask Me Anything (AMA)
Speakers who are experts in their fields can create audio chat rooms and charge the audience a fee for answering business-related and personal questions.
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