Are 150M MAUs, branded communities and a 10-figure price tag enough to overcome questions about reach and hatespeech?
Discord was conceived as purely a chat app for gamers who wanted to communicate with fellow players while playing. Of the 150M monthly active users, roughly 1/3 are active in communities on Discord dedicated to topics other than gaming: Memes, fashion, cryptocurrencies, shared learning and, even, karaoke. Merely a passing fad or an indication that Discord has enough in the tank to expand and evolve into a marketing platform? OMR took a long look at Discord, what the app’s brain trust is doing to attract brands, what new business models are being birthed on the platform and what makes the “Slack for Gen Z” tick.
“Ads are too intrusive, consumers dislike them in general and don’t want their data shared with brands.” Those quotes stem from a Wall Street Journal article with Discord founder Jason Citron, in the wake of which several other outlets have been quick to anoint Discord as the “anti-Facebook”. Be Discord’s aversion to ads as it may, behind the scenes it is pursuing a different marketing strategy: reaching out to well-known brands to convince them to join the platform—but not as advertisers, but as operators of branded communities.
Discord hires experts in branded communities
“We are working with a load of epic brands to centralise their communities on Discord and ultimately tap into the vibrant, engaging and creative users who live on it – If you’re interested please let me know.” That’s from a post shared by Discord manager Archie Prescott on Linkedin three months ago. That post coincides with headwear brand New Era setting up its own server (Discord parlance for forum communities) with Prescot’s support. Here, New Era fans can show off their collection of caps and outfits to others, engage in spirited discussions about US sports (New Era is the official hat company for the NFL, NBA and MLB) and in the future possibly also be able to take part in live audio events.
Before joining Discord, Archie Prescot was a member of the team at US startup Zyper, a software company that “connects brands with their ‘superfans'” and then sets up branded social networks with them. In January 2021, Discord acquired Zyper. Three months later, Zyper founder Amber Atherton (now in the employ of Discord) led what appears to be the first workshop for brands on Discord.
Inevitability thanks to zoomers
Back in September of 2020, Discord CEO Jason Citron announced that Tesa Aragones had joined the company as its new CMO. The Detroit native is an industry vet, having spent time at Nike, among other places over the course of her 25-year career. While at Nike, she oversaw the creation of the “Nike Training Club,” one of the company’s most popular digital communities. It all seems to point to Discord ramping up its efforts to get brands to open up dedicated servers on Discord.
And it looks like it’s working: Just this past June, sneaker and streetwear marketplace StockX (here’s StockX founder Josh Luber in the OMR Podcast International) launched a Discord server during its annual community events StockX Day. “It’s a move that felt inevitable,” said StockX chief marketing officer Deena Bahri to Business of Fashion. “We know Discord is the new platform of choice for Gen-Z and young Millenials.” In its series of “Cultural Talks” on Discord, StockX has spoken to reps from Complex, New Balance and 100 Thieves; currently, there are over 20,000 members to its server.
The Drake and Among Us bump
As noted at the top, Discord originally stems from the gaming sector. In 2013, co-founders Jason Citron and Stan Vishnevsky begin making mobile games together—with little success. Their voice-over-IP product, however, does resonate among gamers. The product, which allows gamers to chat while playing, is dubbed Discord and is launched in 2015. The app also has a text chat function and allows the users to establish servers, on which various channels can be created and to which hosts can be named. Discord’s UX is reminiscent of Slack.
In the first couple of years after launch, the app grows in popularity through various gaming-related subreddits and with the support and engagement of well-known Twitch streamers. More and more users switch to Discord from competitors Teamspeak and text-based “Internet Relay Chat.” Every now and then growth skyrockets thanks to viral gaming moments or celeb streamers. In 2018, for example, Ninja, a superstar streamer primarily known for playing Fortnite, set a record with playing the game together with rap superstar Drake in front of 600,000 pairs of eyeballs. During the stream Ninja makes Drake install Discord. Then in the summer of 2019, “Among Us” blows up and is nearly single-handedly responsible for a daily download spike approaching 1M—Discord ascends to 6th in the US App Store.
Discord is old news in in-game marketing
It’s not really surprising to learn then that Discord has long since become standard for game marketing. The most popular servers are dedicated to games and are officially being operated by respective publishers. There are also several large servers maintained by popular gaming streamers, such as TommyInnit and MrBeast. Other popular server topics include memes, internet culture, anime and music, where members number in the 6-figure range.
The most popular Discord servers
(Swipe left on mobile to view the entire table)
|15||The Lounge||Gaming, Anime, NSFW||525,000|
|19||Animal Crossing New Horizons||Game||507,000|
Maybe it is the fact that the Discord-Team has expanded the feature set of the app over the years which attracted more and more non-gaming users to join the app and to get gaming-focussed users engaged on non-gaming topics. After polling Discord users for about a year on how they use the app, Discord CEO Jason Citron published a blog article in which the clear answer was that “for a lot of [Discord users], it wasn’t just about video games anymore.”
From Karaoke to gardening
As such, the company changed its slogan to “Your Place to Talk,” a year later came to the more abstract “Imagine A Place.” To spread the message about the new company motto, it dropped a short film with Discord users and Danny DeVito.
Discord is a place for everyone, Citron wrote in May 2021. “With over nineteen million active servers of all sizes, Discord has become a place for study groups, karaoke nights, plant parenting advice, learning about cryptocurrencies, and simply a place to talk and hang out with your people whoever they are.” In June 2020 Forbes reported that over 30% of all users are engaged on the app for something other than gaming.
Hypebeasts hustle in “Cook Groups”
Does that mean that Discord is worth a closer look for non-gaming brands? Last year, numerous such brands did in fact begin experimenting on Discord. Candymaker Skittles launched its own server in June 2020, tequila brand José Cuervo launched a campaign on Discord with several big-name musicians and this past November the Sacramento Kings launched a server for its fans.
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.