Sonos Seeks Device Subscriptions to Expand Customer Base - Stacey on IoT

Sonos Seeks Device Subscriptions to Expand Customer Base – Stacey on IoT

By Yanko Reuters

Sonos is giving device subscriptions another look, at least if the new functionality listing is any indication. Based on the details of that listing, it looks like the company is about to expand its Flex subscription program, which lets people rent Sonos speakers for a fixed monthly fee. Expanding the program can not only help expand a company’s customer base, but help it continue to grow even as consumers cut back on spending due to inflation.

Sonos debuted the Flex in Late 2019 in the Netherlands, where it has since offered a small number of customers three rental packages starting at €15 ($15.50) per month for a pair of entry-level speakers and up to €50 per month for a full surround sound home theater package. As a Sonos spokesperson told me this week when asked about the job listing, “We’ve learned a lot about customer interests through this program and continue to explore how subscription models can provide additional flexibility for listeners.”

The Sonos Ray speaker costs less than many other Sonos devices. Image courtesy of Sonos.

Sonos started looking for an accounting analyst for Flex a week ago. The role spans multiple accounting teams and is based on the best (sic) on the east coast of the United States,” The job listing states, indicating that Sonos is eyeing multiple markets for the Flex purchase. Sonos currently generates about 60% of its revenue in the Americas, and just over 30% in EMEA.

“Sonos Flex customers will be able to enjoy the Sonos experience at home, without having to invest in purchasing our soundbar,” the listing continues. Customers will be able to choose from three Flex packages, and get product updates, with the job advertisement promising that the company will “always hear about the latest” on its products.

The company’s flexible experience in the Netherlands was limited to 500 homes. Sonos apparently paused new Flex subscriptions in late 2020, and since then they have been We tell visitors On their website Flex is “currently full”.

Reactions to the trial have been mixed. The Verge called it “Strange FelixAnd Tin Tzu, Founder and CEO of subscription monetization startup Zuora, He confessed It was frustrating. “This is not a very compelling subscription service,” Tzu said Wrote, adding that he would have preferred the company to include additional service features in addition to hardware rentals. As he put it, “Automatic equipment upgrades just aren’t enough anymore.”

However, not everyone doubts the potential of Sonos subscription software. “Extending this rental model to other regions is helping to grow a more stable revenue base, thanks to the addition of monthly recurring subscription revenue,” Paul Erickson, analyst at Erickson Strategy & Insights, said via email. “Honestly, I’d be surprised if they don’t eventually roll it out in the top 3-5 markets in order to grow the total available Sonos customer base via a more affordable option.”

Like many consumer electronics companies, Sonos has been exploring ways to diversify its revenue streams with subscriptions and services for some time. company Launched An ad-supported music streaming service in early 2020 that added a paid and ad-free category later that year. It’s unclear if Sonos plans to integrate Flex with access to its paid streaming product, but such a move wouldn’t be unprecedented: Apple, which has had its own hardware upgrade program for years, is Reportedly looking To combine with an Apple One services plan.

Subscription plans for the service are also It is increasingly becoming a part of the consumer Internet of Things. In fact, moving from device ownership to lease plans can improve, perhaps even guarantee, the consumer experience Obsolete devices are recycled.

For Sonos, Flex could be a hedge against economic uncertainty. Other device makers have responded to rising component costs and inflationary pressures Low power tools are sold at cost or less. A speaker maker has less room to do that if it doesn’t want to compromise on sound quality, and revenue from its services has so far been too small to make up for hardware losses.

Giving consumers a way to get Sonos products without huge upfront costs may be another way to grow the company’s installed base, which has arrived 14 million families at the end of the last quarter. “The Sonos product line is seen as a premium price,” said Ericsson. “In order to sustain customer growth and growth in household penetration during this period of heightened inflation and consumer price sensitivity, the Flex is an affordable alternative for many who will not be willing or able to purchase Sonos devices.”

However, Ericsson also cautioned that the success of a Flex-like service depends on the company being good at the service. As he said: “The long-term growth of Flex subscriptions ultimately will result from how adept Sonos is at pricing based on each market, and how well it delivers on the service side of the equation—installation, repair/support, and timely upgrades,”

This story was written by Janko Roettgers, who can be found at www.lowpass.cc

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