Sonos Jumps Into The Radio Streaming Labyrinth With Its Own Service

By Patrick Moorhead - May 8, 2020
SONOS

Sonos, the Santa Barbara, CA-based audio equipment manufacturer, has existed for a while as a Switzerland-like entity, managing various third-party streaming services on its popular multi-room audio solutions. For years, the company’s smart speaker platform has allowed consumers to connect to hundreds of streaming services, ranging from the 800-pound gorillas like Spotify and Apple Music, to Internet radio services like SiriusXM and iHeartRadio. Its intelligent audio system utilizes a single app, so users don’t have to remember multiple passwords for their various services. While the brand has had some recent hiccups, many consumers love it.

Now, Sonos attempting to take on a bolder role in the streaming radio services category—that of an actual delivery agent. Earlier today, the Santa Barbara-based company announced Sonos Radio, which will be available to its installed base of more than 10 million homes via a software update later today. Sonos Radio is a free, ad-supported streaming radio service that promises a new way to discover new music and services. It looks to be a good expansion of the company’s value proposition.

It’s not a modest entry either. At its launch, Sonos Radio will offer a growing library of more than 60,000 radio stations from long-time partners, including services like Tunein, iHeartRadio, and others. The company is not stopping there; it offers an impressive buffet of original programming such as Sonos Stations (30 stations of select music based on genres most listened to by Sonos users), Sonos Sound System (the company’s ad-free station) and Ad-Free Artist Stations (song selections from musicians motivated by their own inspirations and passions).

Overall, I think Sonos Radio is likely to boost the company’s brand reputation with its steadfast user base, and give new users a rationale to consider Sonos as their connected speaker. Differentiation is key in this highly competitive and crowded device category.

Sonos took a bit of a hit to its reputation (and stock price) a few months ago when it awkwardly rolled out its plan in January to bifurcate its legacy speaker solutions with newer generation models. This inadvertently created the perception that the company was instituting planned obsolescence with its oldest products, which led to reports of widespread dismay from long-time customers. The brouhaha forced CEO Patrick Spence to issue a statement on the Sonos website, acknowledging the company “did not get this right from the start” and pledging that legacy products would “continue to work as they do today.”

It appears that the company learned its lesson from all of this—the new Sonos Radio service will work with all Sonos products, including all so-called “S2” classified products with company’s latest operating system, and legacy S1 products that launched over a decade ago. This should satisfy even the most aggrieved Sonos customers, and I give the company credit for ensuring that legacy products work with Sonos Radio. That said, I personally believe it’s unfair for customers to expect decade-old products to always be compatible with the latest and greatest features and services.

Wrapping up

That wrinkle aside, Sonos’s entry into the streaming radio services segment makes complete sense. The company’s core Sound System station will be welcome news to those users who desire an ad-free listening experience for new music, classics and guest radio hours. Other channels will be ad-supported, but that won’t dramatically mitigate the overall listening experience for users. What will be intriguing to observe is how users respond to Sonos’s curation algorithms, which deliver custom local music, sports and news based on your zip code. While I haven’t had a chance to play with the new Sonos app, I expect it will deliver on Sonos’s reputation for excellent design, usability, and navigation.

The new Sonos Radio features won’t be compatible with voice control via either Amazon Alexa or Google Assistant (the former surprising as Sonos currently offers speaker solutions with integrated Alexa support). Still, I suspect that might change down the road with future updates. In my view, that’s a minor quibble. Sonos Radio offers an exciting expansion of the company’s value proposition. If its single-app approach delivers improved ease-of-use, Sonos may have a winner on its hands.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.