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It’s the latest plot twist in the unfolding story of media’s evolution

In the weeks since late January when it was announced that Clubhouse had raised a $IOOM Series B, there has been a flurry of news articles, discussions, and debates about the future of the app. Clubhouse has, according to the New York Times, “exploded with popularity,” as weekly users grew to ~10M within a year of launch.

For those who aren’t familiar, Clubhouse is a mobile app that the Guardian described as “part talkback radio, part conference call, part Houseparty” (TechNexus is an investor in Clubhouse via Podfund). Clubhouse enables large numbers of users to meet-up to host, listen to, or join conversations in “rooms” on virtually any subject. There are no pictures or text—it is wholly audio. That’s part of the intrigue.

Evolution of Media

Many of the discussions about Clubhouse have occurred on the app itself, as rooms of people debate the value proposition, the nuances of the experience, the risk of hateful and misleading speech, and the relative merits of a bevy of competitors entering the market with similar offerings. Discussions have also centered on what apps like these portend for the future of media: “Will Clubhouse displace radio?” “Will Clubhouse eclipse podcasting?” “Does Clubhouse threaten Facebook?”

The future of media has been a topic of discussion since, well, the beginning of media. Throughout history, media has been continuously re-shaped as technology has unlocked new capabilities. Spoken word content was augmented by print; print by radio; radio by film; silent film by “talkies;” film by television; analog media by digital, and so forth—with augmentation being enabled each time by a new technology. I use the word “augment” because new technologies did not generally lead to the replacement of previous forms of media, but enhanced the media macrocosm. Video didn’t kill the radio star.

The way to think about technology’s influence on media is in three dimensions. First, new technologies enable new modalities by which to distribute content (radio enabled content to be immediately distributed over large distances and heard vs. read). Second, new technologies enable new forms and genres of content (live baseball game telecasts expanded the coverage of games beyond next-day newspaper stories). Technology also makes the act of content creation easier and cheaper. Third, new technologies enable new forms of monetization for media businesses (brands could sponsor radio shows in ways that weren’t practical for newspaper columns). The history of media is thus a story of an ever-expanding set of ways audiences consume an ever-expanding set of content forms with an ever-evolving set of business models supporting the system of production and delivery.

But even as technologies unlocked new capabilities, technologies historically still carried constraints. Radio expanded media, but the high cost of production and distribution concentrated broadcasting in the hands a small few.  As transformational as Television was in the beginning, broadcasts originally had to be “linear,” delivering programming on a pre-arranged scheduled because they could only be delivered over airwaves in sequential order.  Each step in technology’s advance expanded the boundaries of media, but constraints still limited the range possibilities for content.

Content Innovation

What’s different about today is that the Internet, mobile, Big Data, Al, fintech platforms, etc. have for the first time destroyed most historical constraints. This applies not only to distribution, but to content, cost, and business model as well. Where once content creators could only reach a mass market through gatekeepers who controlled production, individuals may now create even feature-length films at accessible cost (or…captivating TikToks!) and distribute them widely at near zero cost.  Where once advertisers could only direct ads, preplanned months in advance, through major industry infrastructures, they can now dynamically insert ads in real time into consumer-directed content platforms.

There are many consequences of a media world with no boundaries. But I want to focus on one in particular: unbounded possibilities regarding the shape and definition of content. As constraints disappear, the media landscape is fragmenting into ever-smaller pixels of what we may call form-modalities. Form-modalities are the intersection of content form (video, audio, etc.), genre (sports, drama, conversation, etc.) and distribution modality (theater, radio, television, computer, mobile, etc.). In a world without constraints, content is free to evolve into a boundless mosaic of form-modalities, each delivering specific types of content and genre to specific audiences through tailored distribution channels with specific value propositions. Indeed, Marshall McLuhan was right: the medium is the message. In this more fragmented world, there will still be blockbuster content releases. But there will also be a long tail economically-viable media opportunities where specific form-modalities address specific audiences. Not all will be economically viable, of course, but we expect the landscape support many, many form-modalities that are.  Some audience segments may wish to consume romantic comedies as podcast episodes. Some audience segments may wish to consume drama as a series of short videos (yes Quibi failed as a business, but we expect this kind of form-modality will eventually succeed). Some audience segments may seek to consumer lessons about entrepreneurship not only through books, but through live conversations with experts. The degrees-of-freedom are endless.

Clubhouse’s Innovation

Which brings me back to Clubhouse. Clubhouse is simply the latest example in a media landscape that is continuing a long march toward ever-more granular fragmentation across content form and consumption modality. The way to look at Clubhouse is not as a replacement to other media forms. The way to evaluate Clubhouse is in understanding the unique kinds of content only a Clubhouse-like platform can enable—and how it augments the media landscape. A recent Clubhouse room featured an in-depth discussion between Hollywood innovator Jason Blum (Blumhouse Media) and venture titan Marc Andreesen (Andreesen Horowitz) on the economic future of the media industry. That kind of cross-industry interaction may have never occurred in a public forum, and in any case likely not accessible to the kinds of people who joined the room. Another recent room featured a conversation between Elon Musk (CEO Tesla, SpaceX, others) and Vlad Tenev (CEO of fintech company Robinhood)—an impromptu discussion about the retail investing frenzy that erupted on the Robinhood platform.  It’s an example of the kind of raw, serendipitous, ephemeral content that Clubhouse enables.  It isn’t all about industry luminaries and celebrities.  Thousands of rooms are hosted daily, on topics from entrepreneurship to comedy to politics and diversity & inclusion. The ability to offer people near continuous access to live, cross-industry, cross-cultural, and targeted-interest conversations—often with industry leaders—appears to be a compelling new form of media. 

We don’t yet know where the plot of this story will go.  The platform will need to prove it can continue to be safe and control harmful and hateful interactions. The platform will need to be able to manage itself as it expands beyond controlled-beta. And there are a lot of competitors entering the space. But we like how Clubhouse is augmenting the media landscape.  We’re bullish on the kinds of platforms that Clubhouse represents. And we believe in the future of content-innovation in media.  

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