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Clubhouse Tests Private Rooms, New Reactions as it Seeks to Maintain Relevance

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Clubhouse's Latest Strategic Shift Points to Concerning Signs for the App's Future

Remember when Clubhouse was the thing in social media circles, with people doing anything that they could to get invited into the app – and some even buying invites for hundreds of dollars on eBay?

Those days are long gone, with more recent reports suggesting that the app is struggling to maintain relevance, which has led to a shift in strategy away from structured programming, and more towards ‘live chilling’ and facilitating virtual hangouts.

Which appears to be part of this latest move, with Clubhouse now testing private groups as a means to enable more intimate interaction in the app.

As reported by Bloomberg:

“The feature, which previously went by the name Social Clubs and is now known as Houses, appeared on some users’ phones in recent weeks. On Wednesday, the functionality appeared to be removed from some phones after Bloomberg requested comment from Clubhouse, but it remained active for other users.”

That would align with the aforementioned strategic shift, as Clubhouse seeks to recapture what made it such a compelling platform to begin with, and get more users back into the app.

Will that work? Could that be a way to get more people to open up the app once again, and check out what’s happening via live audio?

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Clearly, Clubhouse needs to try something.

According to reports, Clubhouse saw 3.8 million new installs globally between January 1st and May 31st his year, compared to 19 million installs during the same period in 2021, an 80% year-over-year decline.   

Clubhouse had been seeing steady growth in India, and other regions outside the US, which pointed to future potential, despite the dimming of its spotlight. But now it seems like those trends are in decline as well, and if Clubhouse can’t recapture the magic, in some form, we could be seeing the final stages for the app, which, at one stage, was valued at $4 billion.

Clubhouse is also trying new in-app tools and features, including Reactions within Rooms and other response options.

Which are interesting, and add more interactive capacity within its audio spaces. But none of these seem to be significant enough to re-ignite any major interest in the app, which may well now be entirely out of reach as the hype around social audio, in general, fades away.

Twitter Spaces isn’t seemingly faring a lot better, and Reddit Talk doesn’t look to be catching on in a major way. Facebook basically gave up on the option, in favor of its metaverse shift, and increasingly, it is seeming like audio rooms were a pandemic-enhanced trend, which don’t really have a place in most longer-term strategies and audience engagement processes.

That’s not to say it’s useless. Much like live video, there will always be some level of value in the option, and there are some great hosts and shows that still attract a lot of interest and engagement. But the mass appeal of such seems to be gone – which is not as big a deal for other apps, which bolted on social audio options to latch onto the trend.

But it is a big deal for Clubhouse, which doesn’t have anything else to fall back on.

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Could Clubhouse still succeed? Sure, there’s still a lot of interest in the app, and that could spark a new wave, at some stage. But its pathway to maintaining relevance is looking more and more challenging, which, eventually, will prompt some tough questions at Clubhouse HQ about how it advances to its next stage.

There is still hope for Clubhouse fans, and there are still shows that are worthy of support. But I wouldn’t be banking on the app still being on your phone this time next year.   



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TikTok Scales Back Live-Stream Commerce Ambitions, Which Could Be a Big Blow for the App

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TikTok Expands Test of Downvotes for Video Replies, Adds New Prompts to Highlight its Safety Tools

TikTok’s facing a significant reassessment in its business expansion plans, with the company forced to scale back its live eCommerce initiative in Europe and the US due to operational challenges and lack of consumer interest.

TikTok has been working to integrate live-stream shopping after seeing major success with the option in the Chinese version of the app. But its initial efforts in the UK have been hampered by various problems.

As reported by The Financial Times:

“TikTok had planned to launch the feature in Germany, France, Italy and Spain in the first half of this year, before expanding into the US later in 2022, according to several people briefed on the matter. But the expansion plans have been dropped after the UK project failed to meet targets and influencers dropped out of the scheme, three people said.”

TikTok has since refuted some of FT’s claims, saying that the reported timeline for its commerce push is incorrect, and that it’s focused on fixing problems with its UK operation before expanding, which is still in its roadmap. But the basis – that its program is not going as smoothly as planned – is correct. 

TikTok’s UK shopping push has also faced internal problems due to conflicts over working culture and management.

Last month, reports surfaced that TikTok’s parent company ByteDance had been imposing tough conditions on its UK commerce staff, including regular 12-hour days, improbable sales targets, and questions over entitlements.

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Now, it seems like the combination of challenges has led to a new growth dilemma for the app – which once again underlines the variance between Asian and western app usage trends.

Social media and messaging apps have become a central element of day-to-day life in several Asian countries, with apps like China’s WeChat and QQ now used for everything from purchasing train tickets to paying bills, to buying groceries, banking, and everything in between.

That spells opportunity for western social media providers, with Meta, in particular, looking to use the Chinese model as a template to help it translate the popularity of WhatsApp and Messenger into even more ubiquitous, more valuable functionality, which could then make them critical connective tools in various markets, solidifying Meta’s market presence.

But for various reasons, Chinese messaging trends have never translated to other markets.

Meta’s Messenger Bots push in 2016 failed to gain traction, and after its Messenger app became ‘too cluttered’ with an ever-expanding range of functionalities, including games, shopping, Stories, and more, Meta eventually scaled back its messaging expansion plans, in favor of keeping the app aligned with its core use case.

Meta then turned to WhatsApp, and making messaging a more critical process in developing markets like India and Indonesia. That expansion is still ongoing, but the signs, at present, don’t suggest that WhatsApp will ever reach the same level of ubiquity that Chinese messaging apps have.

Which then leads to TikTok, the world-beating short-form video app, which has seen massive growth in China, leading to whole new business opportunities, and even market sectors, based on how Chinese users have adapted to in-app commerce.

The Chinese version of TikTok, called ‘Douyin’, generated $119 billion worth of product sales via live broadcasts in 2021, an 7x increase year-over-year, while the number of users engaging with eCommerce live-streams exceeded 384 million, close to half of the platform’s user base.

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Overall, the Chinese live-stream commerce sector brought in over $300 billion in 2021. For comparison, the entire US retail eCommerce market reached $767 billion last year.

Given this, you can see why TikTok would view this as a key opportunity in other markets as well – but as noted, Chinese market trends are not always a great proxy for other regions.

The decision to scale back its eCommerce ambitions is a significant blow to TikTok’s expansion plans, not only from a broader revenue perspective (and worth noting, TikTok’s parent company ByteDance recently cut staff due to ongoing revenue pressures), but also in regards to revenue share, and providing a pathway for creators to make money from their efforts in the app.

Unlike YouTube, TikTok clips are too short to add mid and pre-roll ads, which means that creators can’t simply switch on ads to make money from their content. That means that they need to organize brand partnerships to generate income, and on Douyin, in-stream commerce has become the key pathway to exactly that.

Without in-stream product integrations as an option, that will significantly limit creator earnings capacity in the app, which could eventually see them switch focus to other platforms, where they can more effectively monetize their output.

Which may not seem like a major risk, but that’s exact what killed Vine, when Vine creators called for a bigger share of the app’s revenue, then switched to Instagram and YouTube instead when Vine’s parent company Twitter refused to provide such.

Could TikTok eventually face a similar fate?

TikTok, of course, is much bigger than Vine ever was, and is still growing. But limited monetization opportunities could end up being a big challenge for the app – while it also continues to face scrutiny over its impact on youngsters, and the potential for it to be used as a surveillance tool by the Chinese Government.

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In isolation, it may not seem like a major move, scaling back its eCommerce ambitions just slightly as it reassesses the best approach. But it’s a significant shift, which will slow down TikTok’s broader expansion. And it could end up hurting the app more than you, initially, would think.

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