Tech

Clubhouse: What they reveal about the business model

Clubhouse is currently one of the most popular apps in the Apple App Store.

Clubhouse is currently one of the most popular apps in the Apple App Store.

picture alliance / Flashpic | Jens Krick

In Silicon Valley, Clubhouse is already being traded as the next big competitor to Facebook, Instagram and Twitter. The hype surrounding the new audio app also reached Germany last weekend and is being boosted by a large star line-up and radical shortage. Membership is only possible by invitation. The best-known German users include TV presenter Thomas Gottschalk, CSU politician Doro Bär and football professional Mario Götze.

Anyone who has made it into the exclusive group can take part in virtual discussion groups there or set up discussion rooms themselves. It is also possible to follow other users and set push notifications. A bit like Twitter, only with sound instead of text.

Founders are under pressure to find revenue models

So far, the app is free and ad-free. However, Professor Tobias Kollmann, who teaches and researches digital business models at the University of Dusiburg-Essen, doubts that it will stay that way in the long term. “Clubhouse has to refinance sooner or later because investors are waiting for their return,” says Kollmann in an interview with NewsABC.net.

In mid-May, just a few months after it was founded, the US startup received funding from the infamous investment firm Andreessen Horowitz for almost 10 million euros (12 million US dollars) and is said to be worth around 80 million euros, according to information from Forbes magazine – Clubhouse only had 1,200 beta testers at the time. Today, according to the analysis service Sensor Tower, there are an estimated 1.3 million users worldwide.

Clubhouse reserves advertising and subscription fees

The expectations that the clubhouse parent company Alpha Exploration will turn the hype into money in the medium term are correspondingly high. The founders have not yet publicly commented on their plans, at least not outside of Clubhouse. Digital expert Kollmann thinks it is likely that the revenue model will be based on other platforms such as Facebook and LinkedIn. “The first way is usually through advertising. It is perfectly clear that at some point we will see banners and sponsored meeting rooms, ”he says.

This is also indicated by a passage in the terms and conditions. The commercial use of Clubhouse, for example to advertise companies or products, is therefore prohibited without permission. It is possible that companies will be able to buy this permit in the future.

“The second way is through premium accounts that are ad-free or have certain bonus functions. Fee-based meeting rooms for companies could also be an interesting source of income, ”says Kollmann. There are also some references to this revenue model in the small print. The parent company Alpha Exploration reserves the right to introduce or change a fee for “a subscription product or function” according to the terms and conditions.

The search for a functioning business model becomes all the more urgent the more users the app reaches. Because that also increases the costs. Said Haschemi, analyst at the German venture capitalist HV Capital (formerly Holtzbrinck Ventures), expects the clubhouse stars to want to be paid for their presence sooner or later. “At Clubhouse, the most successful rooms are those where famous personalities speak. In my opinion, influencers currently have none of it – at least not in monetary terms. If the clubhouse wants to be successful in the long term, it has to make a good offer to influencers. ”

Data as a business model

It is clear that personal information about users will play an important role in Clubhouse’s business model – as it does with almost all social networks. “Data is valuable, especially if it says something about consumer behavior or political attitudes,” comments Kollmann.

The Hamburg lawyer Nina Diercks, who has specialized in data protection, IT and media law with her law firm, took a closer look at the guidelines of the app for us. “Clubhouse says it doesn’t sell the user data. As usual, this does not mean that user profiles are not created for target group-oriented marketing and the corresponding access to them is not sold, ”she says. Clubhouse also reserves the right to integrate external advertising networks, which can then skim off tracking and analysis data themselves via the Clubhouse app.

“Data protection provisions would hardly stand up to GDPR examination”

“Clubhouse’s privacy policy would hardly be able to withstand a GDPR check. Overall, the formulations are too unspecific. There is a lack of the necessary transparency as to which data is collected and for which specific purposes the data is processed ”, sums up the lawyer.

Clubhouse requires your real name, email address and telephone number when registering. During use, it says it collects information about your communication profile, such as how often and for how long you are active, at what times of the day you tune in and with which people and groups you communicate. It also records the conversations and saves them “temporarily” in order to investigate possible rule violations according to its own statements.

Clubhouse could get into trouble with the EU

The US startup claims to use the data to improve and personalize the service. In the terms and conditions it also reserves the right to use the data “to develop new products and services”. However, what exactly Clubhouse does with the information remains unclear, according to lawyer Diercks: “As a user, for example, I don’t know for sure whether and how the audio scripts are evaluated or which analyzes are carried out via the app and which data are processed.”

Theoretically, Clubhouse in the EU could have problems with its lax data protection regulations, says Diercks. “In practice, however, examples such as Google, Facebook and Co. show that the authorities often find it difficult to enforce law against US corporations.”

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