Audio Could Perk Up Facebook's Eyes and Ears
April 22 2021 - 7:29AM
Dow Jones News
By Laura Forman
Facebook is putting its money where your mouth is. The hope is
that you'll spend a lot of yours in return.
Fringe social audio network Clubhouse has just 35 employees and,
in the span of less than three months this year, has grown its
valuation from $1 to a whopping $4 billion, according to PitchBook.
So when it comes to audio, imagine what a company with more than
58,000 employees and nearly half the world's population already
using its existing platforms can do.
Facebook wants to find out, of course. On Monday, the
social-media giant said it would launch a series of new audio
features, including a Clubhouse competitor in Live Audio Rooms that
should be available to everyone on the Facebook app by the
summer.
Facebook says it will test its audio rooms in Groups, where the
company hopes it will be able to do audibly what Groups did for its
platform visually: Bring together a concentrated group of people
with similar interests. Facebook says it has 1.8 billion people
using Groups every month -- 64% of the total monthly users on its
legacy Blue app.
In theory, audio networks could be even more popular. Years ago,
texting became the new phone call, offering the ability to
multitask. But we appear to be coming full circle with the
proliferation of audio apps as a potential next frontier of social
media that can be consumed anywhere, anytime, from a street corner
to your kitchen.
Just considering Clubhouse's growth this year, the potential has
promise. Launched last year, Clubhouse wasn't even available in the
iOS app store until September. But in February alone, it saw 10.1
million downloads, according to Sensor Tower data. For some, the
concept of social audio is an appealing antidote to Zoom fatigue
and takes advantage of the extra time available due to more
flexible work situations.
More recent data show Clubhouse's reach may have topped out,
though: March downloads totaled only 1.7 million. That could be
because audio rooms have a limited appeal or because vaccinated
consumers are beginning to venture back out and away from social
media. More likely, it has more to do with the fact that most
people still don't know about the app. As of March, 83% of U.S.
adults had either heard nothing or not much about Clubhouse,
according to eMarketer, citing Axios and SurveyMonkey.
For Facebook, that spells opportunity. Twitter has been testing
its own audio chat rooms called Spaces for the past few months. But
with its apps used by so many more people, Facebook is in a unique
position to bring the medium from Silicon Valley to global Main
Street. According to CivicScience, 41% of adults between the ages
of 35 to 54 are already listening to live streaming audio content,
illustrating the growing market opportunity for more audio
content.
In terms of early monetization, Facebook says it will begin by
offering listeners the ability to purchase "stars" they can dole
out to their favorite creators. The company says it will pay its
creators based on the stars they receive. Later, Facebook plans to
offer the ability for users to pay for premium content through
single purchases or subscriptions. These strategies are similar to
those Twitter reportedly is pursuing, like tip jars and paid super
follows for some of its own new products, some of them
audio-based.
Ultimately, though, it seems like Facebook's best opportunity to
monetize audio rooms is through data, which neither Twitter nor
Clubhouse can match. By running audio rooms through its platforms,
Facebook can conceivably keep the experience cost- and ad-free for
many of its users, much as it has done with Groups. That will help
it to broaden its following, driving the largest possible volume of
information on users.
That point in particular could be especially key as Apple's iOS
changes this year will likely lead to less data-sharing overall.
For most users, the audio social opportunity will present a fun new
way to learn from and engage with a like-minded community about
their favorite topics. For Facebook, it will be yet another way to
get users to further identify themselves via concentrated
interests.
That isn't to say the new opportunity will surely be a slam
dunk. Consider Facebook's forays into live video chats in Groups
and into dating, neither of which appear to have slowed the
incumbent leaders in those respective areas. The difference here
could be that Zoom Video Communications and Match Group were
established and widely used by the time Facebook entered the scene,
whereas Clubhouse is still little known beyond the niche tech scene
-- a small, albeit influential, group.
If in several months you are lured into a Facebook Live Audio
Room ad-free through Groups, don't be too surprised to see your
Facebook newsfeed populated by ads based on whatever topic brought
you there in the first place.
Write to Laura Forman at laura.forman@wsj.com
(END) Dow Jones Newswires
April 22, 2021 07:14 ET (11:14 GMT)
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