Rise of Social Audio

In December 2020, Clubhouse had 600,000 users. As of April 2021, it has 10 million. But just as it’s beginning to achieve critical mass, its core “Social Audio” experience is being replicated by a slew of well-capitalized incumbents like Facebook, Twitter, Spotify, and Slack, as well as ambitious upstarts like Stereo and Fireside. We explain why via the duality of “Lean-Back” and “Lean-In”, how Social Audio drives time on platform, and the paralells with livestream video.

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EPISODE TRANSCRIPT:

Chris Erwin:

So Andrew, there's been a lot of news about live and social audio as of late, hasn't there?

Andrew Cohen:

Crazy. It seems like we went from November, something we've never heard of, to March, we're hearing a new announcement every day.

Chris Erwin:

It's crazy. Let's go through a few of those, and then we'll talk about why this is happening. So over the weekend, Clubhouse just announced a Series C at a four billion valuation. There's also been the launch of Fireside backed by Mark Cuban, and then also Stereo as well. And then incumbent platforms have been either announcing new product builds or rolled out features. Facebook just had a big announcement this past Monday, Twitter has spaces, then there's Slack, Discord, LinkedIn Telegram, and even Reddit. And there's also been some M and A in the space, Spotify acquired Locker Room, focused on sports live audio, and then Twitter acquired Breaker. Am I missing anything there? I know it's a pretty long list.

Andrew Cohen:

I think you just covered it all. And it's crazy that even after all of those launches, all those builds, all those acquisitions in the space, Clubhouse is still able to raise at a $4 billion acquisition.

Chris Erwin:

It's wild. Again, led by Andreessen. There were supposedly demand that that valuation could have been higher from other investors. And I think that Apple is making an audio announcement potentially right now, but unsure what that's going to be. So anyway, though, Andrew, why do you think all this live and social audio is happening? We've been writing and thinking about this for our newsletter and also for our clients. And I think there's a few key trends that you've identified. What are you thinking?

Andrew Cohen:

It definitely seems to be a uniquely kind of engaging and accessible media. And I think all these platforms are trying to get in on that action, because they see it as an opportunity to kind of expand the time that both users and creators are spending on their platforms, and to deepen the engagement, both peer-to-peer engagement and trader to fanning. So we're kind of like what Spotify has been doing with the introduction of podcasts, or how Instagram and Facebook and even LinkedIn introduced stories, or what Instagram is doing now with Reels. I think all of these platforms where you're seeing social audio is another really engaging form of communication that they can integrate into their whole suite of communication tools to keep people in their ecosystem for longer and keep them leaning in even harder and deeper.

Chris Erwin:

I think that's interesting, to even think about the Facebook announcement this Monday, is I think from Zuckerberg's point of view, it's all right, there's a lot of people listening to audio and we don't want to miss the boat on that. Like you said, we just, we win and we make money by keeping our audience on our platform and engaged. And so even though I think Facebook and Ben Thompson did