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.
Musk even asked Russian President Vladimir Putin if he would like to have a conversation with him 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 backed by well-known venture capital firm Andreessen Horowitz (whose co-founder talks about the app from time to time) in a January funding round that was reportedly worth $ 1 billion.
On Sunday, the clubhouse confirmed that Andreessen had led a new Series C funding round after The Information spread 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 opening 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 only gets worse as more users are added and quality content is watered down. Much like meerkat users watching 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 the 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 the craze for clubhouse is also waning, as people can now go outside as Covid restrictions are eased in countries like the UK and 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. Social platforms like Facebook, Instagram, YouTube and Twitter now have billions of users.
Downloads in the clubhouse have stabilized, according to a spokesman for App Annie. “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, which corresponds to a total of 2 billion downloads according to the app analytics company Sensor Tower. According to the research company Statista, the augmented reality mobile game Pokemon Go was downloaded over 500 million times within a few months of its launch.
Clubhouse vs. Twitter Spaces vs. Facebook?
Some clubhouse users who organize 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 remove my community from the platform and hold our conversations elsewhere,” said Essa, who claims that 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 Hopin online event app, valued at $ 5.65 billion despite its age of less than two years. She is less interested in taking advantage of Twitter’s rival over the 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 . 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 invited the show on Twitter 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 are just so many random, poorly curated discussions people can have. That’s why I moved my regular show to Twitter Spaces in order to reach out about novelty in the face of the mainstream of Twitter. Although we paused the experiment because of technical issues 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 also plans to buy Clubhouse for around $ 4 billion. It came a few days after Bloomberg reported that Clubhouse was in talks to raise funds from investors in a round that would value the business at about $ 4 billion.
And there could be more competition along the way.
Facebook is reportedly working on its own clubhouse competitor. Screenshots released by . in March suggest that Facebook’s audio product will be an extension of Facebook’s existing messenger rooms as opposed to being 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 consumer 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, and not just adding live audio. It’s like saying, “Facebook adds status updates so Twitter is dead” – the point is the network. ”