Clubhouse audio app has quickly permeated into the living rooms, dining rooms, and even its users’ bathrooms, with a Guinness world record attempt at simultaneous showering on February 23, 2021!
A valuation of $1 billion makes it one of the latest silicon valley unicorns, with investment from venture firm Andreesen Horowitz.
Mobile analyst and insight firm App Annie estimates that Clubhouse has had 12.7 million downloads as of March 18, 2021, with 3.7 million in the U.S., followed by 1.8 million in Japan and 735,000 in Germany.
Clubhouse rooms are live conversations with human connections. Everything on Clubhouse happens during a live discussion, whether asking or answering questions on stage, following another user, checking out their profile, following or messaging them on Instagram. Talk about living in the moment!
Into my second month on the app, I have had a rollicking time, from making new professional connections to making new friends, learning new things to having both fun and intellectual conversations.
The sheer novelty and ease of the drop-in audio chat have everyone hooked to the app, with a lot of users claiming addiction.
The app is still in beta and pretty early in its evolution, being a little over a year old.
But how to understand the offering of Clubhouse for better content creation, how would Clubhouse and content creators monetize, and how would brands use it?
Below is a deep dive into the app’s structure, content fit, conversation formats, and users with opportunities for content creators, brands, and monetization.
In my experience, this is the first attempt at creating a framework for Clubhouse, therefore and by no means, it’s going to be exhaustive or complete. The intent is to provide a basic framework to build upon and refine it.
User chooses the categories of interest after creating a profile and follows other users and clubs, and consequently is shown rooms in the hallway, equivalent of IG feed and FB wall.
A user can click on categories such as Tech, Hustle, Places, Faith, Languages, Sports, Knowledge, Life, Identity, Wellness, Arts, World Affairs, Hanging Out, and Entertainment.
Clicking on a category shows you users that follow that category, topics to explore, and clubs to follow.
A user can now create a club and invite their followers to become members of the club.
A room could be closed, social: for club members or only for people you follow, or open to all.
A user could create a room within a particular club she/he/they follow or under a new topic. Rooms are where conversations take place, and connections happen. A user would enter the room and then follow the speakers or even other users in the audience. These connections are not limited by any degree of separation but are serendipitous.
A hallway is equivalent to your feed on other social media platforms where a user sees rooms( conversations) that the other users he/she/they follow are present.
The app’s algorithm for showing active conversations to a user in their hallway is not obvious. Still, it is likely to be based on active conversations involving people you follow, the rooms you visited in the past, time you spent there, contributions you made, people you followed from that room, audience size of a room etc.
Moderator and Speaker
Speakers who moderate a room are called moderators, and they are responsible for ensuring none violates the club and rooms’ rules.
Any incident that violates terms and conditions can be reported to Clubhouse. The app notifies the moderators if there’s a safety concern in their room. The moderator could end the conversation if it seems to go out of hand.
The Innovator Moderator is likely to have started multiple clubs or multiple rooms within a club and would also be moderating for other club and room owners.
Innovator Moderator is also likely to have a high number of followers by Clubhouse standards.
Early Adopter Moderator
The Early Adopter Moderator is likely to start not more than one club and more likely to start rooms within a club. Early adopter moderator is highly likely to follow the Innovator Moderator and vice versa.
This user is mainly interested in listening to interesting conversations in rooms moderated by the moderators/speakers.
Clubhouse Rooms and Users
User is likely to play one dominant role across Clubhouse but will move along the spectrum from Speaker to listener.
Clubhouse Influencer( Innovator Moderator)
The Innovator Moderator is a Clubhouse native influencer, a leader, energy giver, and the prime driver of Clubhouse conversations.
KOLs, Journos, Influencers outside of Clubhouse, Service Providers, Content Creators, Artists, Brand Owners.
Monetize Influence on Clubhouse
Innovator Moderators are genuine “Clubhouse Influencers”, who are in it for the long-term opportunity on the app and are willing to put in the effort.
Many of them view Clubhouse as their chance at being the first to build a large followership and influence on Clubhouse before everyone is on Clubhouse, and since it is much easier and faster than other social media platforms.
Innovator moderators are already moderating rooms for money, are looking for brand partnerships, and would land brand partnerships.
The rooms will have one of the below as the dominant format.
Speaker and Listener-(Magic Zone)Higher Speaker to Listener Ratio
Personal and Business (Early Adopter Moderator)
Early Adopter Moderator is aspirational and will give back energy to the Innovator Moderator (on stage) and add to the conversation facilitating an energy exchange.
The early adopter moderator needs both short-term and long-term benefits from the app. Hence, they are likely to host rooms or go on stage in other rooms, where they aren’t the host or the moderator, to interact with the moderators and other users on stage to increase their influence, for short-term business opportunity, or just to have fun.
Also, they are likely to increase their Clubhouse influence slowly for the long-term.
Service providers, Brand owners, and Lead consumers.
Monetize Influence off Clubhouse. learn and fun
(Clubhouse Magic Formula)
The “Speaker and Listener” room format has a higher ratio of speakers to listeners, and is the magic zone of Clubhouse. The features and benefits driving the magic zone are listed below:
In business or personal rooms, where a user can raise hand and go on stage and become a speaker and even a moderator in the company of established professionals, whether in arts or business or any other domain, provides the feeling of belonging to the inner circle, and the feeling is likely to manifest in actuality with the connections and influence a user generates as a result.
E.g., I went to a room with the founder of over $100 million beauty brand, and she invited me to the stage, and then we spoke one on one on the stage. Post that, I have interacted with her a couple more times on the app & Instagram, making me feel like a part of her network. In those moments, I truly felt having arrived.
Users go into a room accidentally and form connections with people who share the same interests, engage in conversations with them without any degree of prior connection on any other social media platform.
You would suddenly see a room with Simon Sinek as the invited Speaker, and at the tap of a finger, you are in the same room, listening live to him answering questions on stage.
The rooms are live, not recorded; there are no DMs allowed on the app yet. All you can do inside a room is speak or listen. When you speak, people can feel your energy; they can see through your content and expertise, how you handle questions and how willing you are to help, or are you all about selling your stuff.
Collaborations + Friendships
I have been on the app for close to 45 days now, and have had unprecedented number of business collaboration opportunities, leads, and, most important, human connections that take me back to my high school or college days.
Every user, including myself, welcomes an Instagram DM, leading to a phone call or a zoom call, after some sort of interaction on Clubhouse.
Every time I have spoken on the stage, my Instagram inbox has at least 5 messages from people interested in my business services. If it is a room with a personal interest topic, I would still get DMs about our common interests.
Clubhouse is making connections on rocket fuel, whether business or personal.
You would suddenly see a super niche topic room in your hallway ranging from religion to business with hardly a few members in it, driving the sense of community even further because of multiple degrees of engagement with almost all in the room.
Democratization and Speed of Network + Influence
Since the app works only on an invite basis, you are likely to have more followers and influence on the app already compared with an established professional who is new to the app. More than that, in the magic zone rooms, where the ratio of Speaker to listener is high, if you take the initiative to speak on stage and offer value, your follower count increases @ speed unlike any other platform not just on the app but also on Twitter and Instagram.
Low Effort but Courage
It is the early adopter mentality that makes users muster up courage and go on stage to voice their opinions.
The magic zone would have the highest FOMO and experiential value. The frequency of such rooms would be irregular, and the audience size is likely to be smaller. Usually, these rooms are no bigger than 300 as of the current stage of the app. Also, the duration of magic zone rooms has been anywhere from 6 hours to 72 hours at a stretch.
Based on personal experience till date, Magic zone rooms with the highest magic, cross-followership, engagement on stage, and repeat visits to the room, creating a community of very close connections, are likely to be around 50 users maximum.
Other Examples of Magic Zone Rooms:
Business: Beauty crew afternoon check-in
Beauty brand founders and vendors host a room with high Speaker:listener ratio, offering other service providers and brand founders to come on stage and have their questions answered.
Audience: Approx. 100, Duration: 2 hours
Business: Saturday morning check-in
A casual Saturday morning room hosted by vendors, moderators and founders in fashion and beauty on plans for the day and the best part of the week that was.
Audience: Between 50-100, Duration: 2 hours
Personal: Assume determinism is true, let’s run the experiment.
A weekly room hosted every Sunday by moderators interested in philospohical questions.
Audience: Approx. 30-75, Duration: 12 hours
Vicarious Experience+ Learner
The listener is typically an energy and knowledge seeker, who experiences the magic zone vicariously through listening to the interactions on stage between users like self and moderators/speakers on stage.
Authority and Credibility for Learning/Experiencing
A differentiating driver for Listener-Dominant room formats as compared to the other room formats on Clubhouse is the authority and credibility of the moderators and speakers.
Even in listener dominant rooms, there is a magic zone experience albeit not as pronounced as in Speaker: Listener rooms.
Service Providers, Brand Owners, and Mainstream Consumer
The listener has a short-term perspective in terms of “in it to learn or experience the current conversation” and loves the authenticity of the conversation.
The listener does not want to put in the effort of raising the hand to go on stage, not to mention the odds are low of being invited, but would rather relax and listen!
Audience: >1k, Duration 1-2 hours.
Although, the magic zone format will influence the format for rooms that are purely listener dominant, the room also has its own charm for those who want to listen and learn without participation. The content is in a way curated since the credibility of the speakers is very high.
Clubhouse Magic Zone, Users and Content Fit
Magic zone will drive content fit for both of the dominant room formats.
Host: Brands-Closed Room-Size of Room- Small
Target: Clubhouse Influencer( Innovator Moderator)
KOLs, Media: Journos, Lead Influencer, Brand Tribe
News, New product launch, New direction in Purpose, Financial Information or a private event.
Speaker and Listener-Size of Room-Small to Medium
Hosts: Brands with Innovator Moderators, Innovator Moderators, Early Adopter Moderators
Lead consumers, Brand Ambassadors-content creators, Early mainstream consumer
Public stance, Purpose/Cause update, Showcase & sponsor event, Q&A, Crowdsourcing and Gamification
Business Example: Club-The Beauty Room, Room-Building a Beauty Room with Purpose-Chart 6 B
The room had a high speaker: listener ratio as many users from the audience were invited on stage to ask questions of the panel.
Audience: approx. 150, Duration: 1 hour
Personal Example:Club: Hot on the Mic, Room Womxn in Comedy Do 2 Min #StopAsianHate-Chart 6 D
Almost everyone who wanted to come on stage was given the opportunity.
Audience: Approx. 300, Duration-2-3 hours( unsure)
Listener-Size of Room-Large
Brands with Innovator Moderators with/without Guest Speaker, Innovator Moderators with Guest Speaker
Lead consumers, Early Adopter Moderators, Early Mainstream consumer
Sponsor celebrity announcement, Talk Show, Seminar & Podcast-Education & Entertainment
Business Example: The Good Time Club with Good Time Show with Aarthi & Sriram: Product Leaders of Robinhood, Uber and YouTube-Chart 6 A
The room is almost purely listening mode for the audience with rarely any audience member invited on stage.
Audience: 1.3K+, Duration: 2 hours (approx.)
Business Example: Club CPG: Room-Acquired by Unilever, Founders and CEOs share Learnings-Chart 4 A
The room was very listener dominant even though a few of the users from audience did get invited on stage to ask questions of the panel.
Audience: 1k+, Duration: 2 hours (approx.)
Analytics & Data-Moderator, Room and User
This is my rough estimation and not Clubhouse’s claim. Of course, this deserves a separate article, which I will publish soon.
As shown in the chart, Clubhouse could generate data on the moderator for performance metrics on rooms moderated. The aggregate of all rooms moderated for a club would become the complete set of data for a particular club’s moderator.
This data would eventually drive the quality of moderation in the moderator, Clubhouse and brands’ eyes.
The app would also have data and analytics on a moderator’s followers, divided into different segments based on their interests and behaviors on Clubhouse.
Since Innovator Moderators are native Clubhouse Influencers, the metrics and data make the role very different from influencers on other platforms, with double-sided accountability to both the app(indirectly as it might impact the support in the future) and the room participants.
The app would also generate data on a user for categories of interest, clubs joined, rooms attended, duration of stay in a room, participation in a conversation, hand raises, number of times on stage, contribution to conversations, no. of moderations, repeat visits to a regular room, impact on conversation, trend of user’s interest in a conversation, user’s follower segments, interests, and behavioral metrics etc.
Clubhouse Monetization and Brands
Now to the hot topic of how would Clubhouse and moderators monetize and what role the brands would play?
At this stage of the app, the ultimate aim of brands should be to create communities. Brands could host multiple rooms under a club, which could be a namesake club, e.g. Youth To the People( a skincare brand) has a namesake Club and hosted a Stop Asian Hate room on March 24th. ( Chart 6 C)
Brands could also start a club or host a room around a value/purpose aligned with the brand, with the mention of hosted by “brand”.
A brand should host both magic zone ( high experiential value) rooms, and listener dominant rooms with a mix of emotional and functional topics.
6 Ways to Monetize For Clubhouse and Moderators
1.Subscription to Moderator Clubs-Listener Dominant Rooms
(Moderator gets paid, Clubhouse takes a cut, Brands could host own clubs that offer subscription or sponsor rooms)
Users would subscribe to clubs (rooms with a pre-determined frequency of hosting). The majority of the payment goes to the moderators(club owners) hosting the room, and Clubhouse takes a cut.
Brands could host rooms themselves alongside moderators or sponsor room conversations hosted by moderators, with listener-dominant rooms.
2.Tickets (Dynamic Pricing)-Speaker:Listener Rooms( Magic zone, high experiential value rooms)
(User pays Moderators to attend conversations(rooms), Clubhouse takes a cut, Brands pay moderator for hosting as well as to sponsor a conversation)
Users could bid or buy tickets for conversations that offer high potential for serendipitous engagement on stage while sharing it with a celebrity and other moderators, for either personal or business gratification.
Clubhouse takes a cut, and brands too could host such conversations in partnership with innovator moderators or sponsor a conversation hosted by a moderator.
3.Freemium Subscription to App
(User pays Clubhouse, Clubhouse pays Moderator, Brands pay Clubhouse)
User pays for premium conversations hosted by moderators by paying the app a monthly subscription for premium rooms. The free membership will have access to the conversations that brands and moderators host for free to build their audience.
The moderator gets paid by the app & brands for the premium rooms based on success metrics, and brands also pay Clubhouse to promote premium conversations or sponsor premium rooms hosted by moderators.
4.Brands Pay Moderators on Platform-Business and Lifestyle Rooms
(Clubhouse pays moderators, Brands pay Clubhouse & Moderators, User-Free)
Clubhouse trains and pays moderators to host business and lifestyle rooms driving conversations. Brands also pay moderators to host conversations in rooms.
Brands pay Clubhouse for aggregate data on moderators performance, rooms and users, to choose moderators for hosting the right conversations.
These conversations could have a sponsored by “brand” below the room topic. Already, Clubmarket is working on developing a sponsorship marketplace for Clubhouse.
I would expect Clubhouse to take a lead on this and facilitate a marketplace on their platform where brands can access data on moderator and their followers and decide on sponsoring conversations.
5.Brands Pay Clubhouse to promote conversations( rooms) to users on Clubhouse
(Brands pay Clubhouse and moderators, User has it all for free)
Brands would pay moderators to host sponsored conversations on Clubhouse, whether on business or lifestyle(personal topics). They would also pay Clubhouse to promote those conversations to users in their hallways.
The objective for brands at this stage would be to build community both on and off Clubhouse. Clubhouse and IG’s engagement rates are through the roof, with reportings( personal experience and chats with a few other users) of 30% Clubhouse followers converting into IG followers and up to 5-10% of new IG followers resulting in organic conversations on IG.
6. Clubhouse creates its own NFTs. (Just for Fun:)
Even though NFTs are a rage, the risk of recording a conversation and duplicating are very high. NFTs could still work for conversations with high emotional value such as a historic debate, confessions of a celebrity, conflict resolution chats, comedy clubs etc.
One way to overcome the duplication issue is Clubhouse combining various conversations into one assortment or digest with a unique digital code and then auctioning it.
The functional value of the NFT to a Clubhouse member who buys it?
The user could leverage the NFT to increase their influence ( like a badge) and audience on Clubhouse and make money on the app’s secondary market.
In a closed room with pre-vetted users, one person in a conversation buys the recorded conversation after room members bid on it. The members of the room could decide to opt-out and in which case the value of the NFT will go down and their part in the conversation would be omitted. If they choose to be in the recording, they would get an NFT commission depending on their contribution to the conversation.
The problem is that any participating user could violate the terms and record the conversation on their own, even though they could permanently be barred from Clubhouse. Anyways, the owner of the NFT would have the unique digital code given by Clubhouse, along with a unique digital audio stamp if there’s such a thing.
The 6th option is not to be taken seriously:)
Clubhouse has literally every member tuned into the drop-in audio app most of the day. While lockdown might have been a major factor in driving adoption, it has rapidly become a very authentic way of building connections, business collborations and learning new concepts and information at a breakneck speed and that too from listening live to people.
The app has users starting clubs and hosting rooms within a club, moderators guiding the conversations around a topic in the room, listeners who like to come on stage to engage as well as the listeners who are purely in it for passive learning or fun.
Moderators are driving conversations and the app by creating conversational content, which is not recorded as of now, generating FOMO.
The Innovator Moderators are native Clubhouse influencers, who host multiple rooms in a club and beyond Clubs. Their objective is to monetize their influence on Clubhouse.
Early Adopter Moderators are usually service providers, brand owners or content creators who are trying to build their network and influence, with the intention to monetize off Clubhouse.
The early adopter moderator takes initiative to come on stage to contribute to the conversation, loves being a part of the inner circle, of interacting with an innovator moderator, an established brand founder, a celebrity or even to have some fun engaging on the stage.
The listener experiences the magic zone vicariously and seeks to learn or have fun from the conversations.
Clubhouse magic zone is a conversation(room) with fewer than 300 members with a high speaker: listener ratio offering much higher authenticity and serendipity to the entire audience.
The magic zone format, with random degrees of separation between participants and high Speaker: listener ratio, is unique to Clubhouse and would drive both Speaker’s dominant format: Listener room and Listener rooms.
Each room format has a typical audience size, kind of topics hosted, differing engagement levels as a consequence, and brands and content creators( moderators) would use them for different types of conversations.
Finally, Clubhouse is likely to collect data on moderators, rooms and users aligned with the business model it chooses. The app could use one of the 5 business models described above: Subscription to Moderators/Rooms, Dynamic Pricing-Tickets, Freemium subscription to app, Incentivise Content Creator, Promote Rooms, and NFTs( worth a shot:)).
Let’s start a conversation to help shape the app and maximize all stakeholders’ value, with the users and moderators at the core.
I welcome your comments and suggestions to the framework. I would personally respond and get in touch to seek clarity and together we can refine this article and take it to its logical conclusion.
Also, I will reference all your inputs with links to your digital profile if I end up using them.
If any brand wants to create their Clubhouse strategy, feel free to book a free consultation with me.
Next up, the Clubhouse algorithm.
CREATE YOUR BRAND’S CLUBHOUSE STRATEGY!
Be an early mover.
ROHIT BANOTA, Founder of StorySaves, has transformed dozens into envious beauty brands for sharp and profitable growth, kickstarted from day 1 with “strategic brand story” and “story-led brand strategy” & powered by digital.
He has over 17 years of marketing and business experience growing consumer packaged brands including with startups and MNCs like P&G Beauty and Grooming.