Take a look at Spotify’s new audio-only app Greenroom, the audio streaming giant’s bid to challenge Clubhouse

• Spotify launched its own audio-only app called Greenroom on Wednesday.
• The app will go head-to-head with Clubhouse, a platform that has been valued at $4 billion.
• Here's what you need to know about Spotify's new app and how it stacks up to competitors.
• See more stories on Insider's business page.

Live audio-only apps are picking up steam, as platforms like Clubhouse continue to challenge the way social media operates.

Spotify launched one of its own on Wednesday – its app is built on Locker Room, an audio-focused platform that was built by Betty Labs and acquired by Spotify in March. While Locker Room was launched in 2020 to focus solely on sports, Spotify's new version of the app – Greenroom – will provide space to discuss any and all kinds of topics and interests.

Greenroom is designed to compete with Clubhouse, the buzzy social media app that recently received a $4 billion valuation. Clubhouse was released in 2020 as an invite-only platform, but quickly took the social media world by storm earlier this year as it gained popularity with celebrities like Paris Hilton and Lindsay Lohan. It also hosted entrepreneurs like Facebook CEO Mark Zuckerberg and Tesla CEO Elon Musk.

Spotify is one of many companies that have rushed to capitalize on Clubhouse's success. On Monday, Facebook released its own live audio and podcast platform.

Here's how Greenroom works

Greenroom has a very similar setup and style to Clubhouse and the basic premise is the same.

The social media app operates as a space for live conversations through spaces called "rooms." Each room has a host, speakers, and listeners.

The host is the person that starts the room and manages who gets to speak. Users who enter the room can request to speak via a button at the bottom of the screen. Listeners can also use the room's chat function to add to the discussion by clicking on the ongoing conversation text at the bottom of the screen. But the host can choose to switch the discussion tab off.

Rooms can go live instantly or be scheduled through the app's calendar function. Anyone can create a room by hitting "Create a room." Then they can select the room's topic and group and set the room live.

The rooms seem to serve the same purpose as Clubhouse rooms inasmuch as they appear to focus on networking, as well as impromptu discussions on current events, but the app still has fewer groups and room options than its competitor.

Greenroom also has similar policies surrounding hate speech and inappropriate behavior on the app. However, one notable difference between the two apps is that Greenroom allows users to record conversations.

Greenroom has its own way of distributing likes. In addition to following users, people can also give out "gems." By double-tapping a user's profile you can reward speakers for saying something compelling. The number of gems an individual receives appear on their profile alongside their following and follower tallies.

How to sign up for Greenroom

Greenroom will appear as an update for current Locker Room users and fits seamlessly into Spotify's brand with its signature color scheme.

To create a Greenroom account, Spotify users must sign into their Spotify account. Users who do not already have a Spotify account can sign in without one. The app works the same for paying and non-paying Spotify customers.

The sign-in process is straightforward and requires a full name, birth date, as well as a profile picture. A user can then begin to select their interests.

While Clubhouse helps users automatically connect with people from their contact's list, Greenroom appears to only offer a search option for other profiles.

The app also appears to recommend popular interests on the platform, including NBA and NFL groups. Greenroom also could eventually use data from people's Spotify playlists to help develop their interests on the app. Users can connect their Twitter and YouTube profiles to the app as well.

Apps like Clubhouse and Greenroom are changing the nature of social media.

For Spotify, Greenroom is just another way the tech company can help build on the success of their podcasts - a sector where the company has invested nearly $1 billion.

In its press release, Spotify said it is attempting to develop a new type of creator economy, where anyone can become a creator and earn revenue from their work. The company rolled out a fund to accompany Greenroom that allows creators who generate high turnout to receive a payment for their work.