Discord: The SuperApp for AI?
Discord: The SuperApp for AI?
Bits of Signum | 05.03.24
Key Points:
Could Discord become a Super App for AI? We believe this is possible due to the platform’s audience size and due to the surge in AI-related servers and users since March 2023, when they reported 30 million users using AI apps on a monthly basis. Discord is emerging as a hub for AI services.
We conducted research on the Discord server of Midjourney, an AI image generator with 19.8 million users, up from 13 million users a year ago, a testament to Discord's appeal as a platform for collaborative creation.
We compared Discord to Quora's Poe, an AI chatbot aggregator, and found that Discord offers a similar model for application creators to monetize AI. Discord’s audience value of ~200m MAUs, according to comments in the press, is significant. Poe has 1.2 million users; if and when Poe is distributed across Quora, it could also reach a large audience. Discord’s Premium App Subscription allows these AI app creators to offer free applications with optional paid upgrades, sharing 30% of revenue with Discord.
Introduction
Discord reported statistics on the growing user base of AI servers as well as AI applications on their platform in March 2023. At that time, more than 30 million people were using AI apps on Discord every month. Overall, users had created more than 1 billion unique images through AI apps on Discord. Almost 3 million Discord servers included an AI experience, and more than 10 percent of new Discord users joined specifically to access AI interest-based communities on the platform. Since then, the platform has witnessed exponential growth in the number of servers and users related to AI services.
Midjourney - A Case Study
We recently conducted research on Midjourney, which has become the largest server on Discord across all categories at 19.8 million users, up from ~13 million in March 2023. In fact, Midjourney does not have a standalone app on the iOS and Play app stores. Instead, it launched as an eponymous AI image generator accessed through a Discord chat server. In an interview with The Verge in Aug 2022, Midjourney’s founder, David Holz, said that their users want to create together and Discord provided the best social experience. The Midjourney app on Discord allows users to create AI-generated images using a simple slash command named /imagine.
This service is currently being used in more than nine million servers. In our view, this will likely become a meaningful new revenue stream - when Premium App subscriptions are activated, users will be able to subscribe to Midjourney directly from Discord, earning the company a 30% take rate on these subscriptions. Additionally, subscriptions unlock access to a gated Discord server. This could be shifted to a Server subscription service, another area of future potential monetization, in which Discord has already disclosed a 10% take rate. Server Subscriptions launched in December 2022, as a feature for server managers to monetize exclusive gated channels available only for their paying subscribers.
A Monetization Comparison to Quora’s AI chatbot platform, Poe
Poe, with 1.22m MAUs, is a service that was first launched by Quora in Feb 2023, with the purpose of becoming a chat bot aggregator. For AI, it is offering users the ability to tap into a variety of AI chatbots, including OpenAI, Anthropic, Google, and others. The idea was to provide a single destination for users’ AI needs while also offering Quora a new potential source of content. Assuming Poe reaches a certain quality level and is deployed across Quora, it could reach a significant audience of ~400 million MAUs.
In April, the company introduced a new revenue model that allows creators to set a per-message price for any bot that they create, and to earn compensation whenever a user interacts with the bot. This compensation will be in addition to creators' cut of subscriptions that they drive.
Discord’s Premium App Subscription, launched in late 2023 and still in beta, also allows “application” creators (note: applications could also be referred to as bots) to monetize their offerings. It works in a similar way as an app store. Discord server managers may select bots/applications for their servers which are free, but have optional paid upgrades for features. These upgrades result in a 30% revenue share to Discord. Additionally, if servers are more attractive and users subscribe directly to servers, user revenues are shared 90%/10% between the server and Discord.
One of our theses on Discord, long before AI hit the scene, was that the seamless integration of a bots marketplace would offer a new and powerful way for the company to monetize its large user base of at least 200m MAUs. In 2022, Discord revealed that over 30% of their active servers relied on apps for customizations, playing games, and keeping conversations safe. We believe a massive opportunity exists for AI servers on Discord to monetize with the 30% take rate in place. For context, we estimate 27m servers on Discord.
One can imagine users tapping into many AI applications via frequently used servers. Examples of other widely used applications on Discord that have only been in existence for roughly one year are LimeWire and Leonardo.Ai, with 2.3 million and 1.8 million users, respectively. We believe that Discord will continue to lead as the most dominant communications platform among online communities and economies. Two years ago, we had not imagined AI as a subscription driver, and we may not be able to predict the next genre to drive the platform. Still, this activity backs our conviction that Discord is well-positioned to capitalize on user trends as they arise in new digital economies, most of which have a Discord community manager.
