next-upnext upauthorJanko RoettgersNoneDo you know what's coming next up in the world of tech and entertainment? Get Janko Roettgers' newsletter every Thursday.9147dfd6b1
×

Get access to Protocol

Will be used in accordance with our Privacy Policy

I’m already a subscriber
Power

Sonos CEO Patrick Spence: There’s money in ad sales for us

The smart speaker maker adds in-house ad sales as radio service continues to grow.

Patrick Spence holding a Sonos speaker

"Given the kind of customer base that we have and given the adoption we've seen in Sonos Radio, there's absolutely advertising revenue there," Patrick Spence says.

Photo: Andrej Sokolow/Picture Alliance via Getty Images

Sonos is doubling down on its efforts to monetize services on its platform, and is now looking to build out an in-house ad sales team for its free Sonos Radio service. Sonos CEO Patrick Spence confirmed the news in a conversation with Protocol on Wednesday, saying that in-house ad sales could help the company attract the right kind of brand advertisers to its platform. "Given the kind of customer base that we have and given the adoption we've seen in Sonos Radio, there's absolutely advertising revenue there," he said.

Spence made these remarks ahead of the release of the company's fiscal Q4 2020 earnings results. The company grew its revenue 16% year-over-year, to the tune of $339.8 million for the quarter. Earnings per share came in at $0.15, ahead of the $0.02 that analysts had expected. The company added 1.8 million new households to its customer base in its fiscal 2020, and close to 11 million households now own Sonos products, with an average of 2.9 Sonos products in each of those households.

Sonos saw overall listening hours increase by 33% for the full year. Sonos Radio seems to have played a significant role in that growth, and became the fourth most-used service on the platform, as well as the most popular radio service, just months after its launch in April. The free service did not cannibalize other services on the company's platform, Spence said. "This is not a zero sum game in any way," he said. "People are listening to Spotify, Apple Music and [other] on-demand services in addition to what's happening on radio."

The company introduced a paid tier, dubbed Sonos Radio HD, last week. Spence said that Sonos was still learning how to perfect both free and paid services after having solely focused on hardware products for so long. "We're kind of excited about having another part of the business that is experience-based, feels very Sonos, but is more iterative in nature," he said. "We'll learn and we'll grow it from there."

Sonos is forecasting between 9% and 13% revenue growth for its fiscal 2021, compared to 5% growth in 2020. Spence expressed confidence in hitting those numbers despite increased competition from companies like Google, Amazon and Apple, all of which have introduced new smart speakers this fall. "Our business continued to grow in scale in the face of those introductions," he said. "We're always watching and seeing what's out there. But I feel like we've shown that we can grow. We're going to continue to innovate and execute in the face of whatever anybody else does."

Update: This post was updated to more clearly identify full-year vs. quarterly growth.

App store laws, Microsoft AR and Square buys Tidal

Welcome to this weekend's Source Code podcast.

Cole Burston/Bloomberg

This week on the Source Code podcast: First, an update on Google's user-tracking change. Then, Ben Pimentel joins the show to discuss Square buying Tidal, and what it means for the fintech and music worlds. Later, Emily Birnbaum explains the bill moving through the Arizona legislature that has Google and Apple worried about the future of app stores. And finally, Janko Roettgers discusses Microsoft Mesh, the state of AR and VR headsets, and when we're all going to be doing meetings as holograms.

For more on the topics in this episode:

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Sponsored Content

The future of computing at the edge: an interview with Intel’s Tom Lantzsch

An interview with Tom Lantzsch, SVP and GM, Internet of Things Group at Intel

An interview with Tom Lantzsch

Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corporation

Edge computing had been on the rise in the last 18 months – and accelerated amid the need for new applications to solve challenges created by the Covid-19 pandemic. Tom Lantzsch, Senior Vice President and General Manager of the Internet of Things Group (IoT) at Intel Corp., thinks there are more innovations to come – and wants technology leaders to think equally about data and the algorithms as critical differentiators.

In his role at Intel, Lantzsch leads the worldwide group of solutions architects across IoT market segments, including retail, banking, hospitality, education, industrial, transportation, smart cities and healthcare. And he's seen first-hand how artificial intelligence run at the edge can have a big impact on customers' success.

Protocol sat down with Lantzsch to talk about the challenges faced by companies seeking to move from the cloud to the edge; some of the surprising ways that Intel has found to help customers and the next big breakthrough in this space.

What are the biggest trends you are seeing with edge computing and IoT?

A few years ago, there was a notion that the edge was going to be a simplistic model, where we were going to have everything connected up into the cloud and all the compute was going to happen in the cloud. At Intel, we had a bit of a contrarian view. We thought much of the interesting compute was going to happen closer to where data was created. And we believed, at that time, that camera technology was going to be the driving force – that just the sheer amount of content that was created would be overwhelming to ship to the cloud – so we'd have to do compute at the edge. A few years later – that hypothesis is in action and we're seeing edge compute happen in a big way.

Keep Reading Show less
Saul Hudson
Saul Hudson has a deep knowledge of creating brand voice identity, especially in understanding and targeting messages in cutting-edge technologies. He enjoys commissioning, editing, writing, and business development, in helping companies to build passionate audiences and accelerate their growth. Hudson has reported from more than 30 countries, from war zones to boardrooms to presidential palaces. He has led multinational, multi-lingual teams and managed operations for hundreds of journalists. Hudson is a Managing Partner at Angle42, a strategic communications consultancy.
Protocol | Policy

Here are Big Tech’s biggest threats from states

The states are moving much quicker than Congress on privacy, taxes and content moderation.

Virginia is expected to be the second state to pass a comprehensive privacy law.

Photo: Ron Cogswell/Flickr

When critics say that Virginia's new privacy bill is "industry-approved," they're not totally wrong, said David Marsden, the state senator who has been working for months to shepherd the law through the state legislature.

It was an Amazon lobbyist who originally presented Marsden with the text of the bill, which hews closely to the failed Washington Privacy Act, versions of which have been pushed by Microsoft across the country.

Keep Reading Show less
Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

Transforming 2021

Blockchain, QR codes and your phone: the race to build vaccine passports

Digital verification systems could give people the freedom to work and travel. Here's how they could actually happen.

One day, you might not need to carry that physical passport around, either.

Photo: CommonPass

There will come a time, hopefully in the near future, when you'll feel comfortable getting on a plane again. You might even stop at the lounge at the airport, head to the regional office when you land and maybe even see a concert that evening. This seemingly distant reality will depend upon vaccine rollouts continuing on schedule, an open-sourced digital verification system and, amazingly, the blockchain.

Several countries around the world have begun to prepare for what comes after vaccinations. Swaths of the population will be vaccinated before others, but that hasn't stopped industries decimated by the pandemic from pioneering ways to get some people back to work and play. One of the most promising efforts is the idea of a "vaccine passport," which would allow individuals to show proof that they've been vaccinated against COVID-19 in a way that could be verified by businesses to allow them to travel, work or relax in public without a great fear of spreading the virus.

Keep Reading Show less
Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Protocol | Policy

Google says it’s fighting election lies, but its ads fund them

A new report finds that more than 1,600 brands, from Disney to Procter & Gamble, have advertisements running on sites that push pro-Trump conspiracy theories. The majority of those ads are served by Google.

Google is the most dominant player in programmatic advertising, but it has a spotty record enforcing rules for publishers.

Photo: Alex Tai/Getty Images

Shortly after November's presidential election, a story appeared on the website of far-right personality Charlie Kirk, claiming that 10,000 dead people had returned mail-in ballots in Michigan. But after publishing, a correction appeared at the top of the story, completely debunking the misleading headline, which remains, months later, unchanged.

"We are not aware of a single confirmed case showing that a ballot was actually cast on behalf of a deceased individual," the correction, which quoted Michigan election officials, read.

Keep Reading Show less
Issie Lapowsky
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
Latest Stories