When pandemic lockdowns swept the country in the spring of 2020, there were concerns that the booming podcast business would take a hiatus — the dramatic decline in people commuting meant fewer people were listening on the go. Podcast downloads initially declined, 10% between February 25 and March 25, but instead of accelerating that decline, digital audio recovered and 2020 brought a new generation of social audio companies to the fore.
The new format — live conversations — emerged as an audio trend with social media giants stepping up their efforts to maintain control over internet experiences. One of the audio upstarts, Discord – which started as a chat platform for gamers and has been around since 2015 – saw its popularity explode. Meanwhile, Clubhouse, which was launched during the pandemic, quickly expanded its user base into the millions and its valuation into the billions.
defy expectations, Podcasting revenue continued to grow and eMarketer had to revise its 2020 estimate from a 1% decrease in the time US adults spend on audio, to an 8.3% growth, over about an hour and a half. Clubhouse claims that users spend on average more than an hour a day on the app.
While people may have commuted less and may have watched the news in the early days of the pandemic, the versatility of the audio format persisted: people listened while cooking, cleaning, and exercising. As it turns out, audio may be the consumer’s last unfilled window of time: There are many more occasions when someone can listen, or even participate in a conversation, than they can keep their eyes on a video.
Discord landed at #3 on this year’s CNBC Disruptor 50 list due to its scale and rapid growth. The company that enables people to have conversations via text and audio chat, along with video, says it has about 150 million monthly active users, up from 56 million at the end of 2019. to set up rooms, which serve as online communities to talk about different topics. While the company’s initial user base was primarily focused on talking about video games, the company’s appeal has skyrocketed over the past year as people found communities on the platform to talk about video games, news, sports or fantasy football and their neighborhoods.
Its CEO, Jason Citron, aims to provide the best version of community space on the web, whether it’s reshaping a dorm, library, restaurant or auditorium experience in a virtual environment. Citron says many Discord users today still experience it in smaller groups of friends, say six to 10 people, but the company sees significant potential in meeting the needs of larger communities around topics of interest, and that’s a focus of new ones. product development, including its Stage channels.
“We see tremendous opportunities to grow our business model,” he said.
The platform caught the attention of Microsoft, which reportedly offered $10 billion for the platform — in an ironic twist, Citron and its Discord co-founder Stanislav Vishnevskiy were gamers who started the company because they were frustrated with communications technology like Microsoft’s Skype.
Discord has raised nearly $500 million from investors including Sony Interactive Entertainment, Tencent, Index Ventures and Reid Hoffman’s Greylock.
Clubhouse launched in April 2020 as an invite-only live audio chat platform with events hosted by people in the community. The app’s audience grew in the early months of the pandemic, bolstered by the frequent participation of Andreessen Horowitz partners, who have led three rounds of investment in the company.
But it was in February that Clubhouse’s user base really took off: Tesla CEO Elon Musk and Facebook CEO Mark Zuckerberg both appeared in Clubhouse chats, drawing so many listeners that the rooms exceeded their 5,000-person limit and people moved in. overcrowded rooms. Conversations – including some with 2021 No. 1 Disruptor company Robinhood CEO Vlad Tenev – about the trading phenomenon WallStreetBets attracted a lot of attention and interest. (Discord also saw its user base grow among stock traders this year.)
For Clubhouse, exclusivity helped: the company limited the number of people who could participate. New users needed a member invite, and the company didn’t expand from iOS to Android devices until May after a year of iPhone exclusivity. CEO Paul Davison this week told CNBC that there are “millions more” waiting to join the platform since Android’s launch.
In the ultimate validation of Discord and Clubhouse’s innovative models, the social media giants have launched similar services. Twitter began testing Spaces late last year, to allow people to click from a tweet to enter a live chat, and rolled out in 2021. Facebook announced “Live Audio Rooms” in April — Zuckerberg said the company has been working on audio for “a very long time” — and also began testing a Q&A product that allows creators to talk to an audience (with video only). or audio), which can ask questions via text or audio.
Microsoft’s LinkedIn is working on an audio feature that will focus on professional conversations. To expand the conversations that used to revolve around the water cooler, Slack, recently acquired by Salesforce, has been experimenting with a feature designed to recreate the spontaneity of conversations in the office hallway. And in March, Spotify bought Betty Labs, the parent company of Locker Room, a Clubhouse alternative.
Some social media trends come and go, but Clubhouse CEO Davison told CNBC this week that history is on the side of his company’s business model: “Voice is the oldest medium. … We are with other people gathered in small groups and talked since the dawn of civilization. … Voice is an enduring medium.”
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