Clubhouse, the new app designed for real-time audio conversations, should scare tech powerhouses like Spotify and Facebook, analysts tell TheWrap.
The free app that has spawned countless talk sessions hosted by everyday people (as well as celebrities and CEOs like Elon Musk) is unquestionably having a moment — going from about 2 million weekly users at the start of the year to 10 million as of Friday. It doesn’t hurt that many users simply want to see who will pop up on Clubhouse next: In addition to Musk, Oprah Winfrey and Joe Rogan are just a few names among the eclectic mix of celebrities who’ve jumped on Clubhouse recently.
That buzz is great for Clubhouse, which was founded less than a year ago by Bay Area entrepreneurs Paul Davison and Rohan Seth. For other popular apps, though, it’s not so great. The time people spend on Clubhouse is time they’re
not spending on streaming services like Spotify or social platforms like Facebook and Twitter. That’s a big deal, as time equals money, especially when it comes to social media, where the longer users stick around, engaged, the easier it is to pepper them with ads. The same goes for audio services that depend on subscribers paying a monthly fee.
Clubhouse, by blending social media and audio, is a real threat to several stalwarts. What’s more, after
raising $100 million at a $1 billion valuation — led by Andreesen Horowitz — earlier this year, Clubhouse has the financial backing to keep growing. Facebook CEO Mark Zuckerberg has taken notice, hopping on the app last month before
reportedly instructing his company to develop its own Clubhouse clone. Twitter, meanwhile,
has been busy rolling out Spaces, its own audio-driven conversations feature. And Spotify, which has spent big bucks over the last two years to make its app a real player in the podcasting world, should have its guard up, too.
With that as a backdrop, TheWrap reached out to a handful of analysts and experts to ask a simple question: Which company (or industry), if any, should be most concerned by Clubhouse’s rise? Here’s what they had to say:
Podcasters (Spotify and Apple)
Several analysts believe that, more than anyone else, the major music and podcast streaming platforms — Spotify and Apple Music, in particular — should be closely watching Clubhouse.
“In terms of competing for user time, Clubhouse overlaps most with podcasts, so Spotify’s growing podcast business may be most threatened,” Loup Ventures analyst Doug Clinton told TheWrap. “Communication and entertainment overlap closely today. Clubhouse tends toward the former and podcasts to the latter, so time will tell if they ultimately overlap even more or if each carve out a separate niche.”
Wedbush analyst Dan Ives agreed with Clinton, saying Clubhouse’s “major success out of the gates” as an audio platform that also fosters collaboration among users sets it apart.
“We believe this mostly impacts podcasts and streaming music platforms, such as Apple Music and Spotify from a mindshare shift,” Ives said. “If it gains more widespread adoption and no more invite restrictions, this could hurt traditional social media platforms.”
Social Platforms (Twitter and Facebook)
Major social media platforms also have reason to be concerned about Clubhouse. Chartable CEO Dave Zohrab said there’s actually a “bull case” to make for audio companies that Clubhouse will help them more than hurt them “because it’ll expand the total market for digital audio.” Zohrab added: “After all, only about a third of U.S. adults listen to podcasts on a monthly basis, so in theory, if people get turned on to audio on Clubhouse, they may want to consume more elsewhere.”
The flip side to this, he said, is that “the pie of attention time is essentially fixed at this point, so any time on Clubhouse would come at the expense of other” social networks like Twitter. “I think Twitter and [Facebook/Instagram] are rightly concerned about attention moving away from their platforms. Both of them are poorly designed for audio; it just doesn’t fit into the forever-scrolling feed of text and images.”
At the same time, Omdia analyst Sarah Henschel said Clubhouse can give Twitter a run for its money as the go-to app for news and updates, “due to its high-value social and topic-driven conversations.” When major news hits, it doesn’t take much time before a Clubhouse room pops up with a few thousand people ready to discuss it.
Still, Henschel said it’s hard to pin down one social app that should be worried about Clubhouse, since it has similarities to a number of platforms, including Discord, the popular messaging app that leverages voice calls.
“If anything Clubhouse is like a Discord, WeChat, and YouTube Ted-Talk all wrapped up in one platform,” she said. “I think Clubhouse has created its own version of social media that we have not had before.”
Why Clubhouse should be worried about Twitter
One analyst went the other direction when reached by TheWrap. Creatv Media Chairman Peter Csathy said that instead of Twitter being worried about Clubhouse, the new audio app should be worried about Twitter.
“If I were Clubhouse, I’d move fast to [strike an acquisition deal] with one of the big guys because they’re coming after you, and we’ve already seen that with Twitter and Spaces,” Csathy said.
“Spaces could crush them, just by sheer mass. People (on Twitter) have their followers already, so adding that Spaces functionality makes it drop-dead easy to use,” he said. Twitter recently reported it has 192 million daily users.
Csathy said this doesn’t mean Clubhouse is useless, though. In fact, it’s the opposite, he said: Twitter’s competitors should “run” to acquire it and weave it into their existing platforms.
“My advice to Clubhouse would be, ‘You’re tremendously outgunned by Twitter and the other big guys,’ so partner up fast. I would listen to acquisition offers sooner rather than later,” Csathy said. “They’ve identified a massive market opportunity, but they’re seriously outgunned. So in that situation, capitalize on your strengths now.”
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