How Monetization Ruined Clubhouse Drop-In Audio — Thought for Your Penny
Clubhouse quietly rolled a new update out this week, and it caused a lot of chatter throughout the hallway. We’re now on version 0.1.32, and there are three changes everyone should pay attention to.
- 1. Payments Beta
- 2. Activity Feed Grouping
- 3. Updated Terms of Service
We’re going to break down all three of these, but especially the first and third. One is the biggest topic of the week, while three deserves more attention.
Another topic that deserves mention is that Alpha Exploration Co. (the company behind Clubhouse) is in talks for another round of funding at a $4 billion valuation.
That’s a lot of money, and I’m curious to use this week’s update as a barometer to determine if this is a fair valuation. It means by the time retail investors get a shot at it, the company will have closer to a $40 billion valuation. It could be even more if a star breaks out from the platform to reach mainstream success like Charli D’Amelio with TikTok.
Of course, Jake and Logan Paul blowing up on Vine did nothing to save it from the app graveyard. And if you click the link for Vine above, you’ll see a familiar icon that should serve as a chilling reminder of its possible similarities to our favorite social audio app.
Let’s dive straight into it and discuss how the features were rolled out, what people think of it, and what to expect in the future.
Money, Money, Money
The big news on everyone’s mind is the release of payments on Monday. Clubhouse is finally letting (some) creators receive payments through a partnership with Stripe. It’s both this news (and the rollout) that became the hot topic for the beginning of the week.
After sitting in on several rooms walking people through how to update the app to accept payments, it became clear only certain people were approved. Not much information is given about how the selection process was made, so there’s a lot of conjecture.
What we do know is what it looks like for those who were approved to accept payments. These screenshots were gathered from throughout the rooms discussing the topic with those who were approved (and many who weren’t). We also know anybody can send payments to these select people.
If you do choose to send money to someone, expect to pay a hefty fee. That $5 I sent above to the founder of Burnt Chicken came with a $0.46 fee. It’s something to keep in the back of your head while integrating payments into your business.
Paul and Rohan were on hand in several rooms discussing related topics, though they haven’t yet hit the hotter burning questions. They discussed the business in both a French welcome room and on “How I Built This” with Guy Raz, which was recorded. Anu and Steph were on hand to listen to several of the rooms about monetization.
And you can piece together a general idea of what they’re looking for if you listen carefully to what’s said.
In fact, I even send this newsletter to the Clubhouse staff. I can’t guarantee they read it, but can promise I do my best to make them aware of what’s happening in the community.
The long story short of it is that Paul and Rohan never meant to create a social media platform. They’re more interested in the audio aspects, and they’re still clearly interested in creating a new podcasting platform.
It came up in several rooms that even by introducing monetization, Clubhouse risks changing the culture. But the platform’s culture has been changing for as long as I’ve been on it. Some people aren’t happy about shoot-your-shot rooms being appropriated by NYU girls.
And even the NYU girls’ exact tech bro-specific formula has been mimicked since it blew up, so nobody’s safe really.
Money has always exchanged hands in back channels. But now with an on-platform payment button, the Clubhouse team can get a grip on exactly how. It’s like drinking barium to get a clear x-ray of what’s happening under the surface of your skin.
Clubhouse didn’t invent payments, but now we are about to see where the real money is in this app.
I Ain’t Saying She a Gold Digger
The biggest point of contention around payments was the selection process of who can and can’t get paid.
Many people who couldn’t were bitter, and in listening to it all, it seems to be as randomized as possible.
Nothing programmed in a computer is ever truly random, and I’m positive there were certain thresholds that needed to be met. For example, the vast majority of people I heard get monetized live in North America. And the US Dollar is the currency for payments.
Stripe’s only available in certain countries, and that will certainly be a hurdle.
The other reason I know it wasn’t purely random is nobody with a party hat nor under 1000 followers got access. Supposedly there were 1000 people who got approved, but I didn’t hear that number during the time I spent listening to Paul and Rohan. I wasn’t there for their full speeches, so I could’ve missed it.
Besides the arguments about who can and can’t get paid, people have worries about how others spend their money. I heard several women complain other women would be tipped for being hot instead of adding value. Some expressed concern about life coaches ripping others off.
None of these problems are caused by Clubhouse, and I would argue they’re not even problems. If someone does get ripped off, Clubhouse facilitating the payments at least gives it more jurisdiction to remove a user than if it happened off platform.
Funny enough, I was sitting in a comedy room hosted by Leah Lamarr and her Hot on the Mic club Monday. As a professional entertainer, she regularly books comedians to perform in her rooms. They already started figuring out how to implement tipping long before Clubhouse enabled it.
Lamarr and the other comedians use CashApp and Venmo to facilitate tipping, and people are happy to do it. I even sent her a tip after her Monday afternoon show and about 30 minutes before Clubhouse rolled the update out.
I sent her the tip because even though I’m poor, I respect her grind. I’m always happy to support artists, and Leah Lamarr is this generation’s Conan O’Brien in my book. It’s been several years since I went to a proper comedy club to watch some performances, and thanks to Lamarr, I’m fully immersed in daily comedy.
The money I gave her was honestly a discount for the pleasure she gives me at the start and end of my days.
Giving money to performers is something we’re used to doing, but not everyone is comfortable with being tipped to speak. Of course, that’s just the tip of the iceberg of ways people are leveraging monetization. By the time it’s fully rolled out, it won’t just be listeners tipping speakers.
Mods hosting game shows and contests can pay audience members. You can pay comoderators to come promote your show by showing up at the beginning to provide more visibility. Or you can hire a group of moderators to pay them.
Mo Money Mo Problems
Let’s not forget about the terms of service update, because a lot of that has to do with payments.
These terms lay out exactly what your rights are as both a payer and payee on Clubhouse. Specifically, I feel it’s important to highlight the verbiage related to subscription renewals:
“If your payment plan includes an ongoing subscription that is automatically renewed periodically, you hereby authorize Alpha Exploration Co. (through Payment Processor) to charge your Payment Instrument in the amount and frequency set forth in the terms of the applicable payment plan, and you further agree to pay any charges so incurred. You may cancel your subscription and revoke your authorization for such payments by notifying us at support@alphaexplorationco.com at least 3 business days prior to the next scheduled payment date.”
This is only one of many references to subscriptions in the ToS. What this confirms is the next step once payments roll out to everyone is to allow subscriptions. It was easier to update the legalese than develop the actual features.
And reading through the ToS, it sounds eerily similar to the 360 deals used in music. Essentially, even this newsletter could hypothetically be violating the ToS because screenshots in emails are included.
I can be suspended if anything I say in any of my writing “in the sole judgment of Alpha Exploration Co., is objectionable or which restricts or inhibits any other person from using or enjoying the Service, or which may expose Alpha Exploration Co. or its users to any harm or liability of any type;”
That means if you stop enjoying Clubhouse after reading this, I’m on the hook. It’s very important to read what you’re allowed to share on platform and off, as it’s covered in great detail in these terms of service. There could reach a point where Clubhouse has exclusive rights to anything you record on the platform.
And that brings up a very important point that everyone needs to remember.
Clubhouse is just one place to get paid. Like Vine, it could go down any minute. They can change the rules about how you get paid or how much at any time. And if you don’t like it, you’ll have to walk away from what you built on the platform (assuming there’s a platform to walk away from).
The company needs to justify its $4 billion valuation, and that means it’s inevitably going to insert itself in the mix. It’ll need to take a cut of sponsorships or transactions if it doesn’t want to play a 30-second ad at the start of each room and keep banner ads up.
Do what you can to make your money on Clubhouse, but be careful going all in on it. It should be just one piece of a broader online presence. Even when in-app payments are allowed, you should still have apps like CashApp and Venmo.
At the end of the day, Clubhouse belongs to Alpha Exploration and its investors. The rest of us are volunteers. You have no control over what happens.
Mansoor is the Clubhouse icon, and he still can’t get paid. On top of that, Mansoor’s not even supposed to be the Clubhouse icon anymore. The team announced it would replace him with Aja Monet.
Now I’m stuck in a position of rooting for him to get paid for being a mascot and wondering why he hasn’t been replaced yet. What’s unfair to him is doubly unfair to Monet, who will likely have her own time in the spotlight cut short on both ends.
If the icons can’t make ends meet, what hope do you have?
Personally, I volunteer my time and effort because I believe in the platform. I love the community that got built on it, and I’m happy to see where the connections and relationships I made through it go.
I don’t think money will ruin Clubhouse — I think this is one more step toward making it better. But until Mansoor is monetized, Monet’s face is on the app, and she’s monetized too, I can see why people are upset.
There’s nothing random about the selection, and people need to get paid. So don’t wait for Clubhouse to give you a button and don’t stop at the button when you get it. There’s no shame in making money.
Continue the Conversation
As always, the worst part about Clubhouse is the conversation never stops. You may not agree with my capitalistic views and think nobody should get paid. You may have experienced a different form of back-channel monetization to share, or you may just be tired of the topic at all.
Either way, joining a conversation on Clubhouse or starting your own about anything discussed here is fruitless. If you make enough noise, you may even draw the Clubhouse staff into the room to talk to you directly about it.
But you’re better off on Twitter Spaces, Reddit, Facebook, and Spotify, where they listen to you much better than Paul Davison.
Subscribe to the Clubhouse Conversations Substack to get the best of Clubhouse delivered straight to your inbox or keep up with the Clubhouse calendar on the r/ClubhouseConvos subReddit.
Originally published at http://thoughtforyourpenny.com on May 30, 2021.