![]() Thanks to Sonos Radio, the company now has a way to monetize that customer base for years after they purchase speakers, and also benefit from a trend of radio advertisers shifting their ad dollars from terrestrial to digital audio. On the flip side, partnerships like the one with Ikea have the potential to grow Sonos' customer base massively beyond the 10 million households that currently own Sonos speakers. In its fiscal first quarter, Sonos generated $562 million by selling its own hardware products but received less than $34 million from Ikea and other companies paying for the use of its technology. As a result, the company gets a lot less money per speaker sold. Those products aren't just cheaper than traditional Sonos speakers, they're also made by Ikea, with Sonos only supplying some of the electronics to power the streaming experience. The furniture giant began selling Sonos-powered speakers in its stores last summer. One reason that Sonos is expanding into services now is its partnership with Ikea. In recent months, the company signaled that it was looking to expand into services, with Sonos CEO Patrick Spence telling Protocol in February: "There's great opportunity there. Sonos doesn't make much money with Ikea speakers - yetįounded in 2002, Sonos has exclusively focused on audio hardware for most of its existence. "They're not playlists, they're actually radio stations," he said. Taylor stressed that the company wasn't using any algorithms to compile its radio stations and promised a radiolike experience, complete with artists and hosts talking about new releases. It struck a partnership with online music veteran Napster to power the catalog and streaming technology, but Sonos is doing all of the programming in-house. Sonos Radio General Manager Ryan Taylor told Protocol that the company first began sketching out plans for the new service some 18 months ago. The company's signature stations are being complemented by around 30 genre stations programmed by Sonos staffers, with titles like "Reggae Roots," " R&B Collective" and "New Lords of Metal." These genre stations will feature some ad breaks, while Sonos Sound System and the company's dedicated artist stations will be presented without advertising. ![]() These include the company's flagship station, dubbed Sonos Sound System, as well as a few select artist stations curated by musicians like Radiohead's Thom Yorke and Talking Heads legend David Byrne. The section offers consumers access to existing radio streams from terrestrial and internet broadcasters, while also highlighting Sonos-exclusive stations. Sonos Radio is launching as a new section within the existing Sonos mobile app Tuesday. As such, it's an interesting example for a consumer electronics company using services not only to generate revenue but also as a way to expand its core business. However, for Sonos, the radio service also represents a new opportunity to lean more heavily into product partnerships like its existing relationship with Ikea, and expand to new product categories, including automotive. Many of these stations will be supported by advertising - a new business for Sonos, which the company is entering at a time when the ad business is feeling the pressure of an evolving economic downturn. It promises free and exclusive music programming across a few dozen stations. Sonos launched its first audio service Tuesday, called Sonos Radio.
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