The live video chat app Houseparty has been around for about four years. Epic Games bought it last June, but the coronavirus quarantine has made it a hit. The app works like FaceTime or Zoom, but with some key differences. You start a chat room and people can drop in anytime, as long as you’re connected on the app. Also, there are quizzes and trivia.
Houseparty says it’s had 50 million new sign-ups in the last 30 days. And like Zoom, with sudden growth comes sudden scrutiny. There has been a lawsuit over user data collection, questions about security and the possibility of strangers joining chat rooms because they are open or unlocked by default.
I spoke with Sima Sistani, co-founder and CEO of Houseparty. She says no strangers can ever join rooms. The following is an edited transcript of our conversation.
Sima Sistani: Rooms are unlocked, so to speak, but it’s a mutual handshake. The only people who can come into a room are people who you’ve accepted as friends. If I open the app, my mom can just pop in, but because I’ve accepted her as a friend. That’s a totally different thing than what’s happening with Zoom, just to be clear. There is a feature, though, where you can turn on private mode, which makes all rooms locked by default. That just would mean my mom couldn’t come into my call like with my colleagues or my friends without me expressly giving her permission to do so even though she is a friend on Houseparty with me.
Molly Wood: Do you think you might have to change any of those defaults, or do you feel like the fact that you’ve already got this existing layer? Certainly, my son has complained about his one friend jumping into the rooms all the time, but that’s at least basic social interaction stuff for teenagers.
Sistani: Sure, we’re all learning the manners around video chat, if you will. I think that we’re always trying to be better, and private mode, for instance, the feature where you can have all your rooms locked by default, is in the settings. It’s one of those things where we certainly feel like we can socialize that better. There are steps that we always want to take to continue to help people bridge to new, more empathetic ways of being together, which we think Houseparty is compared to some of the other tools that are out there to connect socially.
Wood: What about data collection? There have been concerns about the amount of data that’s collected and whether it can be de-anonymized and whether it can be sold.
Wood: We asked this question back in 2018, and I have to ask it again. Since then, you have been acquired by Epic Games last year. How does Houseparty make money?
Sistani: We were monetizing through our games. When you’re in Houseparty, you can play fun games, like trivia with your friends. It was really important to us that the way that we monetize gives value back to the users. At the end of the day, that’s who we’re building this experience for now. Since we were acquired by Epic Games, and because of everything that was happening, we actually made all our games free. That’s one of the really great things about teaming up with Epic, who’s a creator of Fortnight, that we’ve just been able to help even more people connect with their friends and family and have these really fun experiences.
Wood: Will Houseparty always be separate, or do you think that Epic will eventually integrate some of the technology into the game experience?
Sistani: We are operating as a standalone unit now. We’ve been able to rely on all of the great expertise and learnings from Epic. That’s been critical to us, being able to stand up the system while we’ve experienced all this growth. We did announce Party Hub last year — I’m losing track of time in the middle of this endless shelter-in-place. That’s one of the initiatives that we’ve worked on together. At the end of the day, Epic and Houseparty have a very much shared mission and alignment around trying to build participation-based social experiences.
Wood: It sounds like Houseparty, for good or for ill, for you, you’re not going to be expected to generate enormous revenue within Epic Games necessarily. Is that fair?
Sistani: That’s a fair statement. The app is free and we don’t have an advertising model.
Wood: Got it. And now all the games are free, but not forever?
Sistani: They’re definitely free right now. We haven’t thought that far into the future, but we wanted to do the right thing in the circumstances to make it easy for people to connect and have fun.
Wood: What do you think happens in the future? How do you plan to keep all of those 50 million new sign-ups once people eventually do go back to work or school or in-person baby showers?
Sistani: I don’t think about that. If you’re Netflix, if you’re Charmin, if you’re Houseparty, I can’t wait for us to go back to normal, if you will. I expect that things will look a lot different as they do for me in all different types of habits and things that I’ve been forming outside of my online usage. For instance, we shamefully got away from doing family dinners, and suddenly now we are back to having family dinners. When we go back to our commutes and our jobs, I expect that we’ll continue to prioritize family dinners. The thing that I do hope comes from this is that people will have taken away this greater kindness and joy and empathy about the way that they want to connect with people online. I hope that that’s a habit that continues.
Wood: Is it also a little bit of much-needed competition in the social media and messaging space? I feel like all the players had felt essentially set, and now there’s a new conversation a little bit?
Sistani: I think that’s right. I think companies are getting into the space, which justifies the mission that Houseparty has around face-to-face interaction. If we can be the ones leading in that space, and bringing us to that more empathetic, non-highlight-reel engagement-for-engagement’s-sake version of social, I think we can all be in a better place.
Related links: More insight from Molly Wood
About the privacy lawsuit, it alleges that the feature that lets Houseparty users connect their Facebook account to the app handed over information, like IP address, time zone details and the unique advertising identifier that’s on everyone’s smartphone. However, MediaPost notes that judges have previously ruled that those identifiers don’t actually constitute personally identifiable information because it’s not that easy to connect them to someone’s name. Also, the California privacy law refers specifically to sensitive personal data. This is a good time to note that those advertising identifiers are also what various companies are using to track how well states and cities are physically distancing. Remember that Unacast map that was released about a month ago? Apple and Google use similar technology.
CNET reported Monday that Apple and Google have made changes to the contact-tracing tools that they announced in partnership earlier this month to make them more private. The new apps won’t be enabled by default and you’ll have to specifically opt in. The companies are upgrading the encryption on the information they capture, and they say they’ll protect details about individual devices, like phone models or even signal strength. The report also notes that a rebrand is in order because apparently “contact tracing” sounds a little too Big Brother. Now they’re going to call it “exposure notification.” Changing the name to sound less creepy just makes it seem more creepy, in my opinion. You’re saying we’ve always been at war with Eastasia? OK. Meanwhile, lawmakers are starting to make worried noises about the project, and they’re asking the administration to limit how much data can be collected by the new apps, which are scheduled to launch in mid-May. Sen. Mark Warner of Virginia said that since tech companies have been working to get into the health sector for so long, he’s concerned an app like this will be covered for future data sharing. We’ll see if the new changes can make lawmakers more comfortable, let alone users.
As it happens, the National Health Service in the U.K. announced Monday it will not use the Apple-Google contact-tracing app, but ironically, it’s because the U.K. wants a more centralized database of information about potentially infected citizens. Apple and Google said that carried a greater privacy risk.
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