The Social Audio Market Is Booming
Clubhouse Hits $4 Billion Valuation
Clubhouse, an audio social media app, was recently valued at $4 billion after a Series C funding round. This is particularly impressive because the app is still in beta and has no revenue. Meanwhile Facebook (FB) is launching its own set of social audio products.
Clubhouse’s huge valuation and Facebook’s move into the social audio space underscore the growing power of social audio apps. People flocked to audio entertainment as a way to pass the time and to combat “Zoom fatigue” during the pandemic. As of mid-March, Clubhouse was downloaded more than 12 million times. Though pandemic restrictions are easing, both investors and consumers are enthusiastic about the future of audio-based social media.
Other Tech Companies Want to Join the Audio Club
Facebook is taking note of the social audio boom and is launching a series of new products. The company announced that it is exploring building its own Clubhouse-type app as well as a podcast feature. It is also working on an asynchronous voice messaging system, which will allow Facebook users to leave audio messages for one another. Facebook also plans to launch an audio-only version of its video conferencing platform, Rooms.
Facebook isn’t the only tech company going after the social audio market. Spotify (SPOT) inked a deal in March to buy live audio app company Betty Labs, and Twitter (TWTR) is bringing its audio tools to its desktop platform soon. Messaging app Discord recently launched audio-only chat rooms, and Apple (AAPL) is expected to announce audio features at a product launch event this week.
Challenges in the Social Audio Space
Despite Clubhouse’s lofty valuation and other tech giants’ enthusiasm for social audio, this emerging industry is not without its challenges. Moderating audio chat rooms has proven difficult so far, with the potential for trouble on display this past weekend. Clubhouse had to shut down rooms after reports of anti-Semitic comments showed up on Twitter. The social audio industry is also getting more crowded, so companies will need to find unique ways to get listeners’ attention.
Despite these potential stumbling blocks, investors, tech companies, and consumers are optimistic about the future of audio communication and entertainment. As more companies enter the industry and consumers’ habits change after the pandemic, many will be listening closely to hear what comes next for the social audio sector.
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