Conversational and synchronous videos, texts and audios are the three core ways to engage and entertain in the age of social media when everyone is live (synchronous means everyone is engaged real time). Videos, in all forms, have shown to scale really fast (think of YouTube, YouTube Live). Texts have also done well even though monetizing text seems harder compared to video (think of Twitter, WhatsApp real-time conversations).
Yes, you can be watching a video, and watching videos, and ads will keep showing. You do not have to do anything for those ads to drop. But for texts, you have to use your hands to initiate a kinetic process for the ads to show since you need to write to text-chat. In other words, you need to “work” for the ads to keep dropping.
For audio, the challenge scales. Indeed, in (synchronous) audio, you have a big problem to solve if you plan to monetize. How can you have many people speaking at the same time, with no visual element, and still figure out when to pause them to sell an ad? This is different from a podcast where the creator controls the sequence. It is also different from listening to music because the platforms have ways to use ads to enable the transitions, from one song to the other.
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But having two or more speaking, and suddenly an ad interjects will not make a service great. That is the Clubhouse challenge. Yes, how do you monetize in an audio chat room where everyone is speaking?
Finding a way to revenue will be a tough call. No wonder Clubhouse fired 50% of its staff today.
The company may need to borrow ideas from Twitter and offer subscriptions at scale but that would be a huge challenge if it wants to keep growing and scaling.
“Today we announced that we’re scaling back our organization by over 50% and saying goodbye to many talented, dedicated teammates in the process. We’re deeply sorry to be doing this, and we would not be making this change if we didn’t feel it was absolutely necessary.
“If you are among those impacted, you will receive a calendar invite to a 1:1 meeting with a manager in your department within the next 10 minutes. In the meantime, we wanted to provide everyone with more context about why we made this decision and how we will be supporting the individuals who are departing.
“To fix this we need to reset the company, eliminate roles and take it down to a smaller, product-focused team. We arrived at this conclusion reluctantly, as we have years of runway remaining and do not feel immediate pressure to reduce costs. But we believe that a smaller team will give us focus and speed, and help us launch the next evolution of the product.”
The company may need to borrow ideas from Twitter and offer subscriptions at scale, but that would be a huge challenge if it wants to keep growing and scaling. At this time, it does not have the scale, value proposition and brand equity to offer an all-user subscription. And the implication is that Clubhouse may have to be acquired by a bigger company like YouTube to thrive. YouTube will just buy it and integrate into YouTube. I do not see how this company can be a standalone business with its current business.
YouTube Music is betting on the future of podcasts. The Google-owned platform announced on Thursday it is officially rolling out its new podcast feature available to only some users in the U.S. as it looks to deepen its podcast offerings outside of YouTube’s main platform. In a statement, the company said the roll-out “complements the podcast video experience on YouTube.” The music streaming giant also noted it will let those even without a premium subscription be able to listen to their favorite podcasts through the new function.
YouTube continues to invest in the podcast space, while other audio-first products have taken recent hits – including Clubhouse, which announced on Thursday it will be laying off over half of its workforce.
The move also comes as Google’s parent-company Alphabet reported a decline in ad revenue earlier this week. (LinkedIn News)
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The fun is in building, but the sustenance is in making money. Not every tech tool people enjoy is meant to last long, because to remain afloat, money will always be needed.
Clubhouse doesn’t look like a business, so it’s either it gets sold or it will gradually go down. For now they are learning from Elon Musk how to run a tech company with smaller team, you don’t need overbloated headcount to get a tech company going.
Well, relying on ads or freewill donations as revenue model for a business comes with challenges, if the value is great, some category of users should be paying at scale.