This post was originally published on this site
Sonos Inc. is getting more serious about its services business with a new ad-supported radio product.
The company announced Tuesday the launch of Sonos Radio, which mixes curated stations with traditional radio. It’s available through a software update to Sonos SONO, +2.47% customers starting Tuesday.
About half of all listening on Sonos speakers comes from radio, said Ryan Taylor, the general manager of Sonos Radio, and the company saw an opportunity to create a new revenue stream while building a “premium” experience for listeners.
See also: Netflix and Snap earnings will be different tales of media usage during coronavirus
Among the features of Sonos Radio are original stations with hand-picked music. These include Sonos Sound System, an ad-free station hosted by Sonos meant to expose listeners to new music and classics, as well as artist stations, which will also be ad-free and showcase song selections by musicians. The first will feature selections from Thom Yorke of Radiohead, while the next is with Brittany Howard of Alabama Shakes.
Sonos Radio will also offer ad-supported stations comprising of hand-curated music for about 30 popular genres. Users will be able to listen to 60,000 local radio stations as well.
Owners of Sonos speakers listen to about three services on average through their products and Taylor sees room to introduce them to more variety. “If you know what you want to listen to, it’s easy to add it, but we haven’t done a good job of exposing new users to services they might not know exist,” he said.
Read: Disney is in ‘the eye of the storm’ — analyst warns parks may not open until January
From a business perspective, Sonos also eyes an opportunity to help link its partners in the streaming-music industry with what Taylor describes as a “highly affluent and highly desirable audience” through advertising.
While some stations will include ads, Taylor said the company is being thoughtful about how it places them into the programming. That means that the company is trying to blend in ads with the musical content so that the volume is level and there isn’t a large gap between when an ad ends and a song begins. From a privacy perspective, he added that data collected through the service is “only used for Sonos Radio” and that listeners must opt into the service.
Taylor said that Sonos’ effort “is not that different” from what Roku Inc. ROKU, +2.55% is doing in streaming video, except that in his view, Sonos is trying to make sure “it’s a premium experience rather than a budget experience.” Roku began by selling streaming hardware and has since developed a robust “platform” business that allows it to earn revenue when people subscribe to new services through its devices or watch ads on its Roku Channel.
Don’t miss: Roku says coronavirus is boosting streaming
While this is the first dedicated digital service for Sonos, Taylor said the company has been experimenting with other types of service-oriented revenue, including a hardware-as-a-service pilot in Germany through which customers can use Sonos devices for a monthly fee while also obtaining extra customer support.
Sonos shares have lost 44% so far this year, as the S&P 500 SPX, -1.78% has dropped 13%.
