Not just for gamers: Discord’s leveling up to a mass appeal marketing platform

With its acquisition of Zyper, Discord is taking a course to bolster this trend. The former Zyper team has finalized partnerships with several fashion brands, who will launch branded communities. A logical move given that there has been a vibrant streetwear community on Discord for some time: In “Cook Groups”, nearly 25,000 members, talk about limited and rare sneakers, “drops,” bots and proxies, while also selling to each other. Since many of the items are exceedingly rare, the sale of which means a significant profit to the seller, such servers typically are private, charge a fee to join and have strict caps on the number of members.

24,000 applicants thanks to Discord

Some streetwear heads spend up to 10 (!) hours per day on Discord to make sure they don’t miss anything, reported Business of Fashion just a few weeks back. Sneaker fan Jaren Amoroso told BoF, “Most of my shopping is done online, and that starts with Discord.” As such, official streetwear brands are keeping close tabs on the “cook groups” and moving to Discord. In addition to New Ear and StockX, these include Hypebeast (whose server currently has some 18,000 members) and streetwear brand The Hundreds.

From Zyper founder and current Discord manager Amber Atherton’s posts and activities on Linkedin we can glean that the first spate of non-streetwear fashion brands began official undertakings on Discord: pseudo-punk mall chain Hot Topic and sportswear brand Gymshark for example. But also two US fast-food chains as well have begun using Discord: Chipotle put on a career day after the recent minimum wage increase, which according to reports led to some 24,000 applications received. Burger chain “Jack in the Box,” throws Late Night Parties on its Discord server (a play on its well-known extended opening hours) with comic artists, live music, giveaways and the unveiling of new menu items.

Discord is not for mass appeal

This is the part in the piece where we douse the hype with some cold water: Brands and companies need to keep in mind before they launch any activities that Discord is not a typical broadcasting medium like other platforms and will not net any massive reach spikes. For starters, the number of members for a given server, for example, is capped, typically at 100K. If you want more members, you need to request an increase. The largest servers on the platforms, for Fortnite et al., had, until very recently, a limit of 800k users.

CMO Aragones told Fast Company last May that “90 percent of all Discord servers have fewer than 15 members.” On top of the caps, Discord differs from Instagram, TikTok and other platforms in that there are hardly any organic viral effects that can reach new users. Although there is a discovery page on the desktop version, where users can find out about new servers, the potential reach here figures to be magnitudes less than that of algorithm and feed-based platforms like Facebook, Instagram and Tiktok.

Can Discord supplant Facebook groups?

At present, Discord is a place much more suited for brands to engage with its most hardcore and loyal fans, i.e. its ambassadors and to incentivize this exchange with tidbits of new information and/or other goodies. This could be leaking a drop ahead of time to a small group, for example. There is precedent of similar strategies working: When Fall Guys became a hit in August 2020 Discord was the most important growth lever: by creating and cultivating an active campaign before the game his shelves they were able to generate a lot of buzz via word-of-mouth.

Such cases show how Discord could be in a position to overtake Facebook Groups as the most important group when it comes to community building for the next generation. Whether it’s for companies like InstantPot, whose Facebook group currently has three million members, and Peloton or start-ups like Nugget Couches and Cricut, Facebook Groups were an important growth lever.

Trading server cracks 100,000 paying subscribers

As they did with Facebook Groups in the past, media and content creators are currently experimenting with Discord. In April, eight well-known US journalists, who report on tech, media and pop-culture topics in paid newsletters under the name Sidechannel launched a shared Discord server as a “virtual newsroom” for their subscribers; for the launch they interviewed one Mark Z., founder of Facebook.

Various media creators and other entrepreneurs use Discord to run paid communities. In addition to “Cook Groups,” there are paid servers on stocks and trading. 28-year-old American Kevin Wan runs Xtrades (link to Discord Server), which while available to all users does withhold certain features and channels for paying members. There are over 200,000 members on the Xtrades; according to this article on US tech blog Marker, approximately 50% pay between USD 38 per month or 1000 for a lifetime membership. Wan has four business partners and roughly 60 paid moderators.

Wanna earn cash on Discord? Go through Patreon.

Running a paid community is made much easier by the fact that users who have a Patreon account, can also link their Discord account. Many creators active on Patreon offer paying users membership or other special features in the Discord Server as an added “benefit.” For example, Throwing Fits, a podcast dealing in men’s fashion and lifestyle.

Other Patreon creators use Discord not only to run a community, but also to offer special services via Discords integrated tech features. For example, using bots on Discord is permitted, a kind of mini-software, that fulfills special functions and can be applied to all of its servers. There are bots that play music in a server’s audio rooms, that provide instant translations, quiz bots, calendar bots, etc. (Here is a list with examples).

Bots open up new opportunities

The operators of the server Shut Up and Queue (who are also active on Patreon) use bots to play matchmaker with players from online game World of Warcraft. If you want to know how that works, check out the video below by newsletter author “Mules Musings” (link redirects to his excellent piece on Discord):

The Xtrades and Shut Up and Queue examples show that due to the app’s protracted scope of use compared to standard chat apps there is the potential for several new business models on Discord. Another factor speaking for Discord, in addition to the larger scope of use and the aforementioned bots, is the fact that Discord offers much in the way of customization. Server operators, for example, can set up numerous channels each with distinct features, moderators and even grant individual users access to different features and functions. For new users, Discord can be a lot to process—and the need for many of the features difficult to assess at first.

No holding back Discord

And more features keep coming. Some recent examples include organizing conversations in threads and “Stage Channels,” something akin to a Clubhouse clone (think panel discussions in audio rooms in front of an audience). In June “Stage Discovery” was introduced, a feature allowing users to discover new Stage Channels from servers to which user are not members. This could help alleviate the platform’s organic reach problem.

The breadth of granular functions and features does mean that Discord is very difficult to moderate and control. Raids, a wild west-esque tradition where larger groups of users attempt to take over a server and render it useless, are a thing, illegal content sharing is rampant and there are shady business types and unsavory groups active on the platform. Small wonder that the app was beloved by the alt-right in the USA.

Man and machine versus hate speech

Discord is aware of its rep and has said it’s implemented a host of measures to actively combat the larger issues. In 2017, for example, Discord installed an in-house “Trust & Safety team” and has recently begun publishing bi-annual “Transparency Reports.” Furthermore, the company hopes to increase the quality and efficacy of moderation on the platform with its “Moderator Academy,” which not only educates and tests participants, but also grants them access to special features.

Discord also employs a range of tech-based features to combat its ails. Bots in the form of automated moderation features are designed to curb misuse and the company recently acquired startup Sentropy, which “makes AI software that fights online harassment.”

Four billion minutes daily

Compounding these challenges for Discord are massively high numbers of users, rapid member growth and ultra intense usage. In May, Citron disclosed in the Discord blog that the platform had eclipsed 150 million MAUs (monthly active users); six months prior that number was at 100 million. In June 2020, Discord users were reported to log a total of 4 billion minutes of conversation a day, while an analysis carried out by Verto Analytics has Discord users spending more time on average on the platform than those on Twitter or Snapchat.

Do brands need to pay to tap into this massive reach potential with their own server? So far there is no information available correlating the hypothesis. There is the assumption that when a server reaches a certain size that companies need to pay for more “server space.” It’s also plausible (and pure speculation) that companies will need to pay in the future for special features, such as branded emojis.

Is Discord really worth USD 18 billion?

There are similar models in place for standard Discord users. Nitro is an added feature available to companies that unlocks more emojis, permits larger uploads and delivers higher resolution. “Server Boosts” are also available as monthly or annual subscriptions for 10 or 100 bucks respectively. According to media reports, these entail Discords primary source of revenue. The Wall Street Journal reported that Discord generated USD 45M in 2019 and 130M in 2020, but is not yet in the black.

There are also several reports that the Discord founders were in talks about selling the company with three separate companies, one of which is Microsoft, who, according to Techcrunch, offered USD 10B. Bloomberg put Microsoft’s offer at USD 12B, while rumors persist that Amazon and Twitter offered 15 and 18 billion dollars respectively.

Is the future in the Metaverse?

But Discord has apparently withdrawn from negotiations. In May Sony announced a minority stake in Discord as well as plans to incorporate Discord more heavily into Playstation. Now market players are expecting Discord to revisit the idea of doing an initial public offering.

Aiding such speculation is the fact that Discord is a buzzword all-rounder: Social audio, creator economy and Metaverse are all core elements or plausible permutations. And in what can be assumed as a nod to the latter of the three, Discord is expanding its product portfolio with the acquisition of augmented reality startup Ubiquity6 (which was rumored to having issues regarding scaling up). In an official company statement on the deal, Ubiquity6 co-founder Anjney Midha said that the company would be focused on developing “shared experiences” for Discord users in the future.