How Israeli-Founded Video Chat App Houseparty Became A Hit During The Pandemic

The world has slowly been emerging from months of social distancing, quarantine, and lockdown to contain the spread of COVID-19. Many countries are beginning to re-open and are now assessing the socio-economic, political, and environmental ramifications of the pandemic.

Few things have defined this period nearly universally as video communication tools. Their popularity has skyrocketed over the past weeks. From remote birthday celebrations, graduation ceremonies, wine and dine nights, major holiday festivities – not to mention the work meetings and the distance learning sessions for kids – virtual gatherings have a prominent place in our social lives at this moment in history.

And although Zoom has been the tool of choice for many, specifically in the context of work, the Israeli-developed Houseparty has solidified its place as a top contender, especially among younger crowds.

The app enables friends and family to quickly jump into “parties” of up to eight people simultaneously and can be used via smartphone or desktop. Developed by Life On Air, the company that created the once-popular, now-defunct live-streaming app Meerkat, Houseparty prides itself on making video chats a more personal experience. Users can see who is online or free to talk, like other messaging apps, or choose to play in-app games or join live parties.

Houseparty has come a long way. (For an insider look at Houseparty’s ups and downs, check out this podcast.)

As the coronavirus crisis made virtual socializing the “new normal,” Houseparty’s numbers have shot up accordingly. The app’s popularity grew from around 130,000 downloads a week in February 2020 to around a million downloads at the end of March, according to data from App Annie. The app analytics and app data company also reported that it’s the sixth most downloaded free app in the US iOS store and number one in New Zealand, Canadian, and UK iOS stores. TechCrunch reported that the app saw 50 million new sign-ups in the month of March alone, most of which were from European countries.

By the end of March, Houseparty had solidified its place and justified its need in the market by beating out Zoom as the most downloaded application on the Apple iStore in Australia, Canada and the United Kingdom, according to Medium’s tech and science outlet, One Zero. It’s also the no. 3 social app on the US Google Play store.

Unchartered territory

After taking over active duties from co-founder and ex-CEO Ben Rubin, now a member of Houseparty’s board and advisor to the product teams, newly appointed CEO Sima Sistani, previously the company’s COO, is one of the only female CEOs currently running a venture-backed social networking platform. The change in leadership reflects the company’s desire to incorporate gaming, alternative media partnerships, and live entertainment into the video conferencing platform, at which Sistani is well versed.

“We made this decision that the strategy now is games and media, and we’ve got the best person in the house to do that in Sima,” Rubin told The Verge. “As a product CEO and a founder, you have to step away.”

This pivot came after Epic Games, the gaming giant behind the internationally successful game Fortnite, acquired Houseparty in June 2019 for an undisclosed amount of money (rumored to be in the tens of millions of dollars, according to CTech by Calcalist). 

“Houseparty brings people together, creating positive social interactions in real-time,” founder and CEO of Epic Games, Tim Sweeney, shared in a press release posted to Medium. “By teaming up, we can build even more fun, shared experiences than what could be achieved alone.”

In January 2019, Houseparty incorporated its first game, the popular mobile charade-like game Heads Up, a partnership promoted by Ellen DeGeneres on her popular daytime show. Heads Up became part of a long term strategy dedicated to building the first-ever ad-free social network built on shared experiences.

“We’re really starting to think about ways we can make money by bringing value to our users, not extracting value from them,” Sistani told The Verge.

That same year, Houseparty introduced trivia games and a new screen sharing feature which Sistani said had been on the company’s road map since the beginning.

“When people are hanging out on Houseparty, they’re already engaging in these companion experiences. They’re watching Netflix, they’re shopping, they’re doing homework. Screen sharing will make all of those activities easier,” she said.

Houseparty’s offerings appear to have resonated with users, especially during the pandemic lockdown when people’s social lives as they knew them suddenly screeched to a halt. Seeking connections, people turned to video apps, often using different ones for different functions.

“We use Zoom as well,” Sistani told CNBC’s Closing Bell in April. Sometimes I say, Zoom by day, Houseparty by night.”

“I think there are all different uses cases, and I think it’s so great to see people utilizing video chat to stay connected,” she went on.

Taking its name seriously, earlier this month, Houseparty hosted a three-day, celebrity-studded virtual party called In The House with stars such as Alicia Keys, Katy Perry, John Legend, Snoop, Neil Patrick Harris, and Idina Menzel (of Elsa/Frozen fame). Users who opened Houseparty during the event could add it into their own group chats for a “private viewing party.”

Unforeseen obstacles

Amidst the rising figures of daily user signups earlier this year as the pandemic hit, Houseparty came up against an unforeseen obstacle – an alleged smear campaign designed to curb its download growth. On March 31, it addressed rumors that the app was not secure and allowed access to third-party accounts. “We are investigating indications that the recent hacking rumors were spread by a paid commercial smear campaign to harm Houseparty. We are offering a $1,000,000 bounty for the first individual to provide proof of such a campaign”, the company tweeted. 

The statement refers to recent warnings made by Houseparty users claiming that downloading and using Houseparty invites hackers to access sensitive information from users’ devices. These allegations went viral on platforms like Twitter and WhatsApp, based on reporting from the BBC for example. The news network spoke to two women. One said she had received an email from the music app Spotify about suspicious activity because someone had been trying to log in to her account.

“This only happened since I downloaded the app [Houseparty,]” she said.

A spokesperson for Epic Games claimed that an internal investigation “found that many of the original tweets spreading this claim have been deleted, and we’ve noticed Twitter accounts suspended.”

“When you’re using Houseparty to have a face-to-face social connection with the ones you care about, you should not have to worry about the security of your data. We take this seriously and it’s a core part of our values. We aim to be best-in-class in this area,” Sistani wrote in early April.

In a social distancing world running rampant with video conferencing technologies that provide users with a sense of normalcy, the values of privacy and security take on a new meaning. The ability for businesses and individuals to be able to conduct conversations without the disruption of unwelcome third party drop-ins creates a need to remain uninterrupted and unexposed.

A recent phenomenon known as Zoom-bombing, where uninvited guests access a Zoom session by exploiting privacy settings, has introduced a vulnerability that has been exploited by hackers.

Although Houseparty is not the only platform dealing with privacy breach issues, they are the only ones who have maintained that the rumors are false.

In a previous tweet, posted on March 30, Houseparty’s official account released a statement assuring users that there was no real threat. “All Houseparty accounts are safe – the service is secure, has never been compromised, and doesn’t collect passwords for other sites.”

More than ever, companies like Zoom and Houseparty have a responsibility to reassure users that their information, conversations, and online experiences remain confidential if they wish to continue growing and thriving in an increasingly technologically dependent world.

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