Thanks for the article Cristina, I am still trying to grapple with the platform didn’t work and I think your article touches on it and maybe not directly. I think if you think about the format of your short-form video sites like Youtube and Tiktocks – they never sought to convert traditional media into ‘new’ media for young people. Their strategy was to directly create content (usually low quality vs. traditional media) which definitely worked and once having a strong base could then move upmarket.
This reminds me of Clay Christensen theory on low-end disruption. It works by creating a product that is of lower quality and cheaper than the incumbent product. This usually attracts less paying consumers. The incumbent (trad. media) has no incentive to compete as they make more money where they are. The issue is that the lower quality and cheaper product can easily move upmarket and supersede traditional media.
The issue with Quibi was that it wanted to be a high-quality product to directly compete with incumbents in a market that incumbents are interested in. This never makes for great strategy.
Great article Pranav. I see a lot of comments about how creators will struggle to monetize. I think of the analogy of podcasts and how people like Joe Rogan apparently made $30M of his podcasts. So the assumption on audio-only not making money is not true. The second basis for people saying that it will not make money is the unrecorded nature of the platform. I also see an analogy to how television originally works. The television shows with the most views are the ‘lives’ of first-time play and they garner most of the ad revenue. If Clubhouse were to grow to get a significant amount of listeners what is stopping it to get advertising revenue like recorded podcasts and not even more?
Great post. My worry is on the sustainability of the company. 20% of commissions may also be seen as too high, why would a competitor – sponsored by a celebrity not charge 10% and get all of the users. The network effects on this business are low as all you have to do is attract the content creators to a new site promising lower commissions and then everyone else would move.