Clubhouse business model (2023) - Powerful Ways They Make Money

Clubhouse business model – How Clubhouse Makes Money

Since the early days of Facebook and maybe TikTok also, how many social app have you seen generating as much interest as Clubhouse has been doing for over a year now? Almost everyone just seems to be talking about Clubhouse and its business model. The audio first social app seems to have discovered a niche that other social platforms never emphasized. In fact, Clubhouse users grew from 2 million to 10 million within a two month period between January 2021 to March 2021.

But just in case you have been in the Venus for the last 24 months and just returning to earth and just hearing about Clubhouse for the first time. Or maybe, you have heard about it, but don’t quite understand the way it works, this post will detail everything about Clubhouse business model; what it is, the way it works, the value proposition, the revenue model and indeed every other thing you might want to know.

So if as an entrepreneur or a researcher you wish to know more about Clubhouse business model, this is the post for you.

Table of Contents

What is Clubhouse?

Clubhouse is an audio-based social media app, which hosts audio-only digital events. It works with a sort of discovery feed where you can find events of any time, organize them as a host, join them as an active participant or just attend to listen.

It is an audio-only app. No texts, no video, no images, just exclusively audio. It feels like a podcast where multiple people are allowed to speak about a topic or have hangouts without the need to share pictures, videos, or texts. All communications and interactions is just audio.

Clubhouse is more like a modern version of radio but with a social element. The format of content looks more like a story with the content always a live broadcast.

In Clubhouse people can freely form digital audio-rooms where they can talk about anything. Those virtual audio rooms, are managed by a few moderators working as hosts or presenters. Just like a normal phone in radio program, some persons can tune in to contribute to the conversation while others just tune in to listen and learn.

Clubhouse was previously an invite-only app. That was basically during the early test stage. But on July 21st, 2021, its founders announced that the app could now be used by anyone, thereby not requiring an invitation from an existing user. So anyone can download the Clubhouse app and join different audio rooms of choice.

Clubhouse Business Model: How it Works

Clubhouse is a social audio only app that allows users to join in, listen, and communicate through audio chat rooms. Individuals can set up their own audio rooms and allow others to join, or one can join audio rooms set up by others. Each audio room can host up to thousands of people at a time.

So, how does Clubhouse work?

I will explain that one now.

Clubhouse is available as a mobile app.

To use it, users will have to follow the following steps:

Step 1: Download the mobile app on the Apple App Store or Google Play store

Step 2: Create an account using your phone. A verification code will be sent to the phone number used for sign up.

Step 3: Once your account is confirmed, you can begin to explore the app by adding topics of your interest. You can also choose creators of your choice to follow on the platform.

Clubhouse Business Model: The Value proposition

Clubhouse is a place of serious learning. In fact, most of the people on Clubhouse are there primarily for educational purposes. So, unlike most social media platforms, Clubhouse is more of a place for learning than a place for entertainment.

The popularity of the platform means that it attracts very high ranking and high net worth individuals across the globe.

And what are they there doing?

They join to share their knowledge, experiences and decisions for people to learn from.

Among the most popular people to have graced Clubhouse are:

1. Elon Musk

2. Oprah Winfrey

3. Kevin Hart

4. Chris Brown

5. Tiffany Haddish

6. Ashton Kutcher

So Clubhouse Business Model has provided an for young and ordinary people to be part of a platform where their knowledge can increase. It is an opportunity to be in discussions with people one won’t ordinarily have access to. If you are an entrepreneur, a student or researcher you won’t want to miss out on this powerful platform for anything.

And the best part of it?

Joining Clubhouse is free of charge.

Commercial Applications for Clubhouse

Without videos, pictures and even texts which are easily saleable content formats in 2023 you would wonder where exactly Clubhouse finds practical and real life application. But the truth is that it is a matter of audience preference. Just like Podcast and radio, millions of people around the world prefer audio to videos. And Clubhouse can be used to build almost anything or work on any project including. If you understand Clubhouse business model and the way it works it can be a very important tool for your business and even for discovering new business opportunities.

But the most popular applications going into 2023 are likely going to be in the areas of:

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1. Business meetings

In this case there is no difference in effectiveness between Clubhouse and either Zoom or Google Meet.

So the same way you can set up a business meeting with colleagues and partners using Zoom, you can do the same thing with Clubhouse.

There are people who are naturally shy on camera or who just feel more confident without a video. You might be shocked how free and how much valid contributions such people might be able to bring when a business meeting is done via Clubhouse.

Finally, you can join several clubs in Clubhouse. Clubs on Clubhouse are a smaller community of people who interact and raise topics for discussion, just like a Facebook group. However, it is totally audio-based. Therefore, it is a subgroup where you can have personalized conversations.

You have a brief overview about Clubhouse, how to join, what Clubhouse is all about, and how it can serve as a personal and business development tool while facilitating connection with successful people; hence, boosting your business.

2. Another Version of Podcast

I earlier likened Clubhouse to a podcast or a radio. Well, that is exactly what it looks like or works like.

However, it is actually more than a podcasting platform. It is an improvement on what a podcast is in that it added a social component (user-generated content and interactions) and a format that looks more like radio and stories.

3. Hosting Digital Events

In you are someone that hosts digital events regularly you will definitely find Clubhouse very helpful. You can use it to because it to build up an engaged community of users.

4. Sort of Social Radio

Clubhouse looks a lot like the modern version of radio. But just like in the case of a podcast it comes with a strong social media component. While radio, as a media, has been adapting to other formats like podcasting. Clubhouse brings that to the next level. A “social radio platform” that fully user-generated, with thousands of digital audio rooms and shows, where any show can be produced, from wider audience topics to niche and microniche level subtopics.

5. Facilitating Training

A full blown course can be packaged and delivered to a group of people via Clubhouse.

And the training don’t have to be limited to any particular topic. It can cover a whole lot with proper explanations and emphasis made.

Clubhouse Business Model: How it Makes Money

Clubhouse is already a household name in most business circles. However, it is still in the beta stage, and even though it has been already valued at about $1,4B, it doesn’t make any money yet.

The owners explained that they are more interested in building building features that make it easier to moderate rooms and clubs. Moreover, they are working with creators to develop a business model that rewards every stakeholder as the platform grows.

However, some monetization strategies are being proposed already:

1. Subscription-based Revenue Model

Since Clubhouse is currently not considering the option of ad revenue model like most other social platforms; Facebook, Google, TikTok etc, it is most likely to go the way of OnlyFans. OnlyFans as we know goes by the subscription-based revenue model. It allows independent creators to receive funds directly from their audience. And as is evident with the highest earning OnlyFans accounts the model is a great attraction for most celebrities. OnlyFans takes 20% of the revenue and allows the creators to keep 80%. Though it is not yet clear how much or if Clubhouse will be willing to take a percentage of the subscription if and when it decides to go by this model.

But looking at Clubhouse business model this is a sure revenue model in the waiting.

2. Tipping and Donations

This is a monetization strategy that allows users reward content creators by making donations during live shows or events. Usually the platform takes a certain percentage of the amount donated as one of its own revenue options.

Common platforms that are already using this to great effect are Twitch and TikTok. And it is a monetization strategy that Clubhouse is not ruling out. And it is quite easy for Clubhouse business model to accommodate it.

Conclusion

Clubhouse is one of the latest social media sensations of the 21st century. It is an audio only platform that works more like a podcasting platform or digital radio but with a social integration. Clubhouse is a powerful platform for learning with users able to join any club or room of interest and learn for industry experts. The fact that the billionaire owner of Tesla and Twitter, Elon Musk along with other notable names has appeared on Clubhouse is a prove that it is a platform not to be ignored.

Clubhouse business model makes room for possible monetization through subscription, tipping, donations and others. But it is not likely to consider advertisement as a revenue stream.

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Kachi Ogbonna

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Clubhouse business model (2023) – How Clubhouse Makes Money