The Big Story

Sonos launches its first subscription service

Smart speaker-maker Sonos is getting into subscription services: The company unveiled Sonos Radio HD on Thursday, a $7.99 per month, commercial-free radio service that offers access to exclusive artist stations, uncompressed HD audio and the ability to skip songs.

Dolly Parton will be among the first artists who will curate and host their own Sonos Radio HD stations; Sonos has promised to launch five additional artist stations early next year. Paying subscribers also get access to what the company describes as sleep sounds: think white noise and mellow piano music, fine-tuned for Sonos speakers. At launch, Sonos Radio HD will be available only in the U.S. and the U.K., but the company has plans to expand into additional countries soon.

The launch of Sonos Radio HD comes about half a year after Sonos unveiled Sonos Radio as a free, ad-supported service on its platform. Sonos Radio has since become the fourth most-popular music service on the platform, according to the company, so there is clearly demand for this type of curated experience. It also tells us a lot about what's in store for the future of Sonos and how the company is seeing the industry evolve.

Here's why Sonos Radio HD is a big deal:

It gives Sonos greater independence from industry heavyweights. Sonos has long been a kind of Switzerland for streaming music, working with anyone and everyone, to the tune of around 120 services to date.

• However, these days, some of the biggest services are run by Apple, Amazon and Google, all of which make their own devices (and Spotify reportedly still has a Home Thing in the labs somewhere). Even pure-play media service companies may opt to keep the best experience for their own apps.
• "Going with our own radio service, frankly, gave us more control," said Sonos SVP Ted Dworkin.

It adds another revenue stream as Sonos diversifies its business. In addition to building its own speakers, Sonos has begun to partner with companies like Ikea to make devices that are powered by the company's platform.

• Ikea's Sonos speakers aren't just cheaper: They also bring in a lot less revenue for the company.
• Ad-supported and subscription-based radio can make up for some of those gaps, while adding recurring revenue streams to the company's existing install base.

It sets Sonos up to embrace on-the-go listening. A patent application I recently unearthed suggests that Sonos is working on its own set of headphones.

• Launching paid as well as free services would allow Sonos to own the experience on those devices, and not just make them yet another way to listen to Spotify.

There are some signs that you may not even have to wait for Sonos headphones.

• Another recently published patent application outlines plans to allow users to listen to music directly from their mobile devices, and intelligently switch back and forth between headphone listening and playback on Sonos speakers.
• Consumers may be able to set dedicated policies, for instance to automatically transition audio playback between headphones and speakers during daytime hours, but ask for confirmation at other times to avoid waking up neighbors when the headphones run out of battery late at night.

Asked about plans to add mobile playback to Sonos Radio HD, Dworkin remained noncommittal, but ultimately acknowledged: "One could foresee that."

Overheard

"Our future is about inventing ever better ways to move the world through story … which entails embracing change." WarnerMedia CEO Jason Kilar in a memo announcing massive layoffs as the company refocuses on streaming.

"Spotify is conducting an all-out assault on the podcast industry. Daniel Ek would buy up every microphone if he could." Morgan Creek Digital co-founder Anthony Pompliano, reacting to the news that Spotify spent $235 million on podcast ad-tech company Megaphone.

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Watch Out

Inside Evoca's ambitious plan to reinvent over-the-air TV

Millions of consumers are cutting the cord, replacing their traditional cable bundle with a custom selection of streaming services, only to find that their home broadband can't quite deliver what's needed to watch 4K TV on multiple screens. Idaho-based Evoca now wants to combine streaming with a new generation of over-the-air broadcast technology to close this digital divide, one TV set at a time.

Key to Evoca's service is ATSC 3.0, a nascent broadcast standard that makes it possible to transmit 4K HDR TV over the air.

• It also uses modern video compression to allow broadcasters to send more programming over the airwaves, and it combines over-the-air programming with streamed on-demand content.
• For consumers, this would mean that they can access 4K video without having to deal with slow internet connections. "For the first time, broadcast now talks to the internet," said Evoca CEO Todd Achilles. "It's very much of a hybrid."

The FCC approved ATSC 3.0 in late 2017, and broadcasters have begun to make use of the standard in about a dozen markets across the country, including Portland, Austin and Las Vegas. Like traditional broadcast TV, much of ATSC 3.0 has been free to consumers.

However, the standard also allows broadcasters to transmit DRM-protected content and then charge consumers to access it — which is exactly what Evoca is doing.

• The company went live with a small 100-household trial in Boise, Idaho, this year.
• Participants pay $20 per month, which gets them access to a set-top box from the company that combines ATSC 3.0, traditional broadcast TV and on-demand streaming.
• The lineup includes broadcast content as well as a bunch of niche channels, but the company is promising to add more traditional cable content in the near future.

Evoca plans to open up its service to the public and expand to additional territories in the coming months. The company aims to be available to more than half of all U.S. TV households by 2023.

That's an ambitious goal, and there are still a lot of open questions:

Currently, Evoca doesn't offer a DVR. The company hopes to add this to future versions of its device, but there's a catch.

• The same DRM technology that makes it possible for Evoca to offer a paid service over the air could also allow broadcasters to prevent consumers from recording their shows.
• "Complying with the copyright restrictions is messy," Achilles admitted. "It's messy and getting messier."

The balance between free and paid is yet to be determined. To date, broadcast TV has been a great way for people to get free access to networks like ABC, CBS and Fox.

• What happens to those networks, and the shows available on them, not only depends on ATSC 3.0, but also the pace at which companies like Disney shift their crown jewels to streaming.
• "Broadcasters and networks are still trying to figure out what the future looks like," Achilles said.

Device support is lagging. A few TV manufacturers started to add support for ATSC 3.0 to their 8K TVs this year, and more are expected to jump on board next year.

• That's important not only for free TV, but also for paid services like Evoca, which eventually wants to forgo its own hardware and become an app on a smart TV.
• However, industry insiders are expecting it will take some time to trickle down to consumers.

"It will take several more years for the consumer market to ramp up its adoption of ATSC 3.0," BIA Advisory services concluded in a report for public TV stations last year. Laura Slater, a spokesperson for DVR maker Tablo, agreed. "It's great to see that there is demand from super early adopters and technology enthusiasts, but the average cord-cutter won't be able to take full advantage of ATSC 3.0 for a while."

Fast Forward

Bloomberg has launched a new streaming network. Launching after the election was a bold choice. Then again, will this election news cycle ever really end?

Some VR arcades seem to be doing well despite COVID-19. Whether these trends hold up as infections surge across the country remains to be seen.

Vimeo raises $150 million, may go it alone. IAC is preparing to spin off the 16-year-old video site.

On Protocol: TV providers are on track to lose around 5 million subscribers in 2020. Q3 2020 wasn't quite as terrible as last year, but the industry is still shedding customers left and right.

Roblox will host a Lil Nas X concert this weekend. Roblox's first-ever concert experience will include three performances scheduled Saturday and Sunday. It's how you party when you have global audiences all using the same metaverse.

The Slingbox is dead; existing devices will lose support in 2022. Dish's Sling subsidiary (not to be confused with Sling TV, which is also owned by Dish), is officially pulling the plug on the Slingbox. Consumers will receive another two years of support, after which all Slingboxes will turn into paperweights.

Discovery, CBS and NBCU have some doubts about T-Mobile's new TV service. The media companies believe T-Mobile doesn't have the rights to include their networks in TVision's $10 tier. Predictably, the telco disagrees.

The Four Seasons is now in VRChat. Then again, why would you want to visit a hotel in virtual reality. Wait, I'm told it's not the hotel?

Auf Wiedersehen

This has been a strange week, and the election has led me to spend way more time on Twitter than I should. Seriously: My phone informed me that I used my Twitter app for five hours on Friday. That's all during my spare time; I basically live on TweetDeck during work hours.

But while I spent most of that time agonizing and stress-refreshing, I did also learn a few interesting things. Earlier this week, someone tweeted a hilarious video supposedly showing a school orchestra butchering the theme music from Kubrick's "2001: A Space Odyssey." It took the Twitter hive-mind only minutes to identify the actual source of the audio: a recording of the Portsmouth Sinfonia, which set out to become the worst orchestra in the world in the 1970s, and briefly counted Brian Eno among its members. Atlas Obscura has the whole story, and YouTube has more recordings than you'll ever want to listen to.

A MESSAGE FROM SAMSUNG NEXT

Welcome to the age of synthetic media

Content generated or manipulated by AI through machine or deep learning is changing how we create, distribute, consume, and democratize media. What does synthetic media have the power to change next?

Learn more