Why Clubhouse is the future of sports radio

The future is participatory and social

The traditional sports media business model is broken. We know that. It happened with newspapers, and this week, we saw radio suffer the same fate.

But here’s the thing: the downfall of sports media isn’t due to a lack of consumer interest (market), nor an issue with the media themselves (product).

There’s clear product-market fit; it just suffers from a flawed business model.

Enough is enough; it’s clearly time for this model to change.

In this post, I’m going to outline:

  • How radio’s traditional business model is broken
  • Why the future of sports radio is participatory & social
  • A playbook for Clubhouse to pioneer this model
  • How its creators can earn a sustainable livelihood

An unsustainable business model

First, sports media has historically relied on advertising to generate revenue, which isn’t scalable, nor profitable — especially given the high expenses that traditional media companies incur.

Radio stations have large broadcasting studios & offices, expensive A/V equipment, and pay sizeable salaries.

To put it simply, the minuscule revenue generated from advertising can’t keep up with radio’s rising expenses — and that’s what lead to ‘budget cuts’; the shuttering of entire radio stations, or layoffs of key personnel.

Second, the technology underpinning local radio (AM/FM stations) has suffered a steep decline in viewership, due to shifts in consumer behaviour:

  • The rise of streaming & mobile (podcasts, Spotify, etc.)
  • Declines in car ownership & driving (Uber / Lyft, public transit), especially among millennials. Remember, the only radio many people owned was the one built into their cars.
  • For those who did drive, COVID and remote work means less people are on the road commuting, so there’s less time with a radio at their fingertips.

That’s the bad news. But here’s the good news for the sports media industry:

First, the emergence of the ‘creator economy’, coupled with the rise of the direct-to-consumer (D2C) model, means influencers (sports media personalities) can now monetize their individuality by building their own audience (rather than their publications’), and earn a livelihood as a result.

How, you ask? Well, they publish their own content on an independent platform like Substack, leverage their existing follower base (e.g. Twitter) to attract an audience, and monetize off their most passionate, loyal fans — through a freemium or paid subscription model.

Many high-profile news journalists have left household publications such as The New York Times to start independent businesses on Substack, and are already earning six figures in annual revenues.

This is the detachment of ‘brand’ from the institution to the individual; a massive shift in the balance of power.

Secondly, consumers have demonstrated a clear willingness to pay for premium sports content, as validated by The Athletic and its 1 million paying subscribers generating $60 million in annual revenue.

Combined, these two factors lead me to my next point:

The future of sports radio is participatory & social

One of the downsides of traditional media (e.g. print / radio) is that it offers limited opportunities for consumer engagement.

Radio entails high friction for a listener to become a participant: you have to get the station’s phone number, muster up the courage to phone in, and if you’re selected by the host, you’re granted access to speak to the presenter. That’s a lot of steps.

The old-school methods of “Letters to the Editor” and “calling in to phone boards” are unilateral (one person expressing their opinion), rather than bi-directional (back-and-forth dialogue).

The dissemination of content discussed on radio is very hierarchical; speakers are the host, and they control the topic, what to say, and who can join them on stage.

This is where traditional sports radio falls short. Because radio’s content is driven top-down, it limits opportunities for consumer engagement — which, in turn, stifles monetization opportunities.

In contrast, new forms of participatory media such as social audio and video not only offer opportunities for direct interaction (Twitter threads, live video / audio) — but in fact encourage it on their platforms.

As a result, sports fans flock to digital platforms — usually Twitter — to engage in endless conversations about sports. In fact, they even tweet at (or about) sports media personalities, about the very things they said on-air! How this manifests itself, in the context of sports media, is often through ‘AMA’ sessions, debates, and polls.

And what better medium to conduct those activities through than participatory & social audio?

The downstream effect of this is that it democratizes who can have a voice and be considered ‘media’; again, the decoupling of influence from institutions.

With low barriers to entry (anyone can launch a podcast or Clubhouse show), minimal costs to get started (free or minor fees), and no constraints of geographical boundaries (anyone can tune in from anywhere), social audio is the antithesis to traditional radio.

Clubhouse’s golden opportunity

Which brings me to my final point: why the viral social audio app Clubhouse is perfectly positioned to be the future of sports radio.

The main premise of Clubhouse is the ability for users to start live, drop-in, audio shows. You don’t need to be an accredited personality to have a show on Clubhouse — just like how anyone can launch their own podcast or newsletter.

The beauty of Clubhouse is that anyone can participate. Shows have moderators (ala radio hosts), and audience members — who can ‘raise their hand’ to jump in the conversation, with the moderator’s approval.

This significantly reduces the friction for listeners to join in on the conversation, ultimately making conversations more dynamic and fluid.

Conducive to the real-time nature of sports

On Clubhouse, there can be pre-scheduled shows on a regular schedule, much like traditional radio has the same hosts at the same time, every day / week.

But, the beauty is that shows can also be spontaneous.

One of the unique things about the sports industry is that it rapidly changes in real-time throughout the day, based on breaking news.

Imagine a big trade or signing just took place in the NBA.

Sports media personalities could spontaneously start a show, their followers would get notified to join in, and the “instant analysis” conversations begins in real-time.

This is where podcasts fall short for sports media. The turnaround time required with editing & publishing podcasts means that by the time an episode makes its way online, the news is out-of-date, or the key tidbits have already been shared on Twitter. Moreover, the conversation topic may be dormant or less relevant by the time the episode gets published the next day.

The Athletic’s podcast for “instant analysis” on breaking stories.

It’s the modern-day equivalent of how print news suffered by running on 24-hour news cycles. Which was disrupted by… social media.

A path to monetization

Now, you’re probably wondering: okay, but what about the business model, since Clubhouse is free to use?

Clubhouse has already announced that they plan to allow creators to get paid directly via their app; calling them the “lifeblood” of the platform.

I see 3 potential business models for sports media personalities on Clubhouse:

Premium subscriptions

Similar to the Substack freemium model (free newsletters with some premium-only content), hosts on Clubhouse could launch premium subscriptions for their most passionate, loyal followers.

An example of Substack’s paid subscription options.

This would get subscribers exclusive access to special shows like athlete interviews or AMAs, or small & intimate sessions with high-profile individuals in the sporting world. It’s a model already validated by OnlyFans.

Let’s do some quick calculations. Say the average sports media personality has 100,000 followers on Twitter, and they launch a $5/month premium subscription to their premium newsletters and talk shows.

If they can convert 1% of those followers — their most passionate and loyal — to paying subscribers, that’s $5000 in monthly revenue, or $60,000 a year.

Ticketed shows

In the pre-COVID world, sports media personalities used to rent out large concert halls or pubs / restaurants, do live talk shows / panels in front of their fans, and charge for entry.

The Athletic, for example, used to host “Puck Talks Live” events in various markets, where audience members would purchase tickets to come watch a live panel of their favourite hockey media personalities, and guest speakers.

Imagine that same model, but on Clubhouse, through microtransactions.

For example: users could pay $1.99 to hear a famous GM talk about how they got started in the industry, or they could buy a $4.99 ticket to take part in an exclusive AMA session with a famous athlete.

Tipping

Though often scrutinized, tipping has emerged in the creator economy as a common way of ‘thanking’ your favourite influencers for their time and content, while supporting their livelihoods at the same time. And just like Uber and Doordash, 100% of the tip would go into the host’s pocket.

Imagine your favourite sports media personality just produced an epic show, or wrote an in-depth blog post that you found really valuable. You could open up their Clubhouse profile, and say “thanks” by sending them $1.

Last year, YouTube launched a set of tipping features for its content creators, and in just a few months, over 2 million users had given tips to over 80,000 YouTube channels (source).

The beauty of these 3 business models is that the incentives are perfectly aligned; the hosts’ quality of content (output) directly correlates with their earnings (outcome). In addition, the models aren’t mutually exclusive; you can have ticketed events that generate tips, or ticketed shows open to free subscribers.

Contrast that with the advertising model, where the media is incentivized to optimize for clicks and page views, through clickbait-y headlines.

Summary

In closing, here’s why I’m bullish about Clubhouse being the future of sports radio:

  • The advertising business model isn’t profitable, yet consumers are willing to pay for premium content
  • The power of ‘influence’ has shifted from institutions to individuals
  • Social audio turns radio into an interactive & engaging format
  • Clubhouse’s spontaneity is conducive to the sports news cycle
  • There’s proven business models from other verticals in the creator economy

If anyone from the sports media industry is reading this post, and wants to learn more about Clubhouse (or needs an invite), feel free to reach out to me on Twitter at @samir_javer! 👋

Product @Grammarly. Ex: @GoClio, @Thumbtack, @DoMeetings.

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