The chat wars are fought and won as much with cash flow as they are with user numbers.
There are few multi-million user video conferencing apps that don’t have the super deep pockets of Google, Microsoft, Twitter, or Apple behind them, and the emerging start-ups face an unfair financial fight. For every Slack that makes it, there are a dozen that don’t–and Slack faces some goliath competition (from Microsoft Teams, for one) to stay relevant.
Last year alone we lost Vine and Blab, which both once held audiences in the millions. Their demise was directly linked to an inability to convert all those viewers into revenue, or to create enough quality content to keep them coming back.
It’s a lesson the makers of smartphone app Houseparty have already lived through themselves, and one they’ll have to learn from if their currently successful, youth-focused real-time video chat app is going to survive.
Houseparty has already been through a vicious rise and fall and rise again on the app store charts, and it still hasn’t been monetized. You can see the dangers it is facing when you line it up against one of the video calling world’s long-time survivors, ooVoo.
Why Houseparty Is So Popular
Houseparty was born out of the flaming wreck of Meerkat, a public live-streaming app that got buried under the weight of Facebook and Twitter. Its creators turned that talent for live-streaming into a social video calling app with enough cool and smarts to dominate the Generation Z market within weeks of its launch.
In May last year, it became the top download on the App Store charts.
Its appeal lies in its causal connectivity. The core of Houseparty is a straightforward group video chat function that caters for up to eight people. However, it creates the feeling of a much wider world than the average video chat service by letting users join any ongoing group chat that contains at least one of their contacts. This trick lets it mimic the real-world dynamics of a party by putting you in touch with not just friends, but friends of friends–like waving to a friend in a bar and joining the group for a beer and introductions.
Aside from a slick interface, a unique support service that is initiated by physically shaking your phone, and some nice quirks like falling confetti and oddball facts during loading times, that’s the big draw of Houseparty.
It was enough to get Gen Z interested…for about three months. By August last year the app was ranked outside the top 1,500 on the App Store and its parent, Life on Air, was in trouble.
Perhaps due to cyclical nature of the high school and college calendar, though, the app bounced back to the higher download rungs within a month and has held steady since.
Without a steady revenue stream to build upon, however, that’s a dangerous game to play.
ooVoo into Its Second Decade
ooVoo, by stark contrast, is unapologetic in its attempts to secure a profitable revenue base. The decade-old video chat app is littered with advertising, but seems to have found a balance between shameless commercialism and ongoing popularity.
Never a true pioneer, but always an early adopter, ooVoo, like Houseparty, is aimed squarely at a young demographic but attempts to appease them by offering avatars, masks, and a shareable YouTube channel.
ooVoo is available across desktop, laptop, and the major smartphone platforms, while Houseparty betrays its Gen Z roots by being smartphone exclusive. That aside, both offer a high-quality video call, and both make it easy to host and join a live chat–ooVoo’s group limit on smartphone tops out at four callers, but you can host up to 12 on a PC.
Each, though, does have its strong point.
The free-for-all nature of Houseparty–with the ability to quickly switch between group chat rooms–is something ooVoo can’t match. Actually, ooVoo’s presentation looks a little too much like Skype to ever compete on looks either.
On the other hand, ooVoo’s shared YouTube streaming channel gives callers something to do together other than just talk or exchange emoji, and it gives the service a depth that Houseparty can only compete with if its chat rooms stay crowded, and open to everyone.
Houseparty Is More Fun, But Is It Built to Last?
On looks and dynamics, Houseparty is the more interesting of the two services, and the most likely to win the attention of the desired Gen Z audience.
However, that precipitous fall down the App Store charts underlines its precarious future. If it becomes a seasonal app, put to use during semesters when school halls and dorms are filled with new faces, and discarded during the breaks, it is going to be hard for Life On Air to find a steady revenue base. Live video streaming is an expensive business, and Gen Z is accustomed to getting its social calling for free–they’ve grown up with WhatsApp, FaceTime, and especially Skype. On-screen advertising is another option, but it’s also a bit of mood killer at any party.
So while Houseparty may be the flavor of the month, it’s possible that it may not be around long enough to become a major social video calling force.
Meanwhile, ooVoo will keep supplying functional video chat, adding a few trendy features now and then–perhaps it’ll borrow from Houseparty’s “friend of a friend” mentality–and picking up a few million new users every year.
Image Source: Flickr CC User Esther Vargas