Patrick Spence, Sonos CEO, on industry partnerships and the future of Sonos
Patrick Spence, CEO of Sonos, discusses Sonos' place in the CI market and the company's long-term strategy at CEDIA 2018.
Q. So, the S1 filing indicated that there’s going to be an increased focus direct-to-consumer, and I can tell you that all the audio manufacturers out there really took advantage of the release of that information. With this in mind, how will you avoid cannibalising opportunities for the channel?
I think it’s a very valid question and I’m sure all the dealers that have been with us for a while know that they’re have been these moments in time where there are always questions – for instance, just walking into a retailer like Best Buy. My view on it is a bit like a rising tide, in that we’ve done a lot of work across the last decade to build the brand to a point where consumers know what Sonos is, and this is helping in terms of pull through. We’re also trying to be reliable and something our partners can integrate well.
As we’ve been put direct to the consumer, I think it’s the reality that any brand at this point needs to have relationship with the people that are engaging with the product everyday. For example, you will have seen that we put the ability to message to consumers in our app as well, so we can let them know when new products arrive or different features that we are introducing so we keep that communication going.
“The value is in integrated systems being provided and the solutions that come together, and that’s where installers make the difference.”
I think the reality is that some people are just going to buy a Sonos One or similar through Sonos.com, but they might also do it through Best Buy, Amazon or other retailers, but I don’t think that’s really where we add value. The value is added in through integrated systems being provided and the solutions that come together, and that’s where installers make the difference. I think this combination altogether creates a really good halo around installers’ businesses and ours, so we’re always trying to find that ground in how we do things.
I think our focus should be on helping educate customers, creating better awareness and ultimately then more opportunity for everybody that’s in the value chain – I don’t think its zero-sum gain. We are definitely pushing on that, and trying to make sure customers understand the latest and greatest with Sonos. One of the things that I did recognise doing our IPO roadshow is that people don’t always know this, so we have to keep consumers and dealers as up to date as much as we can.
Q. How is Sonos approaching and preparing for the future of audio content?
We’ve talked about something called the ‘sonic internet’ and people are like ‘Is that just a made up marketing term?,’ but the reality is that we think there’s a lot happening from the internet in terms of more things becoming audio content.
The past has been very much with the internet really being about tapping, reading and scrolling, and I think now I think more and more of it is becoming audio content. This can be seen in the explosion in podcasts, audiobooks and the ability for voice services to be able to read more things out loud. We really see our role in trying to get every piece of audio content that consumers want on to Sonos. And making it easy to access that – so adding Apple AirPlay support is a good example as we saw it as important to make playing any kind of content from an iOS device even easier.
I hope people can see that we’re going to do whatever is best for the customer and always think about that. We try not to get too religious about one thing or another when we approach this. Someone may want to use Airplay, the Spotify app, direct control or the Sonos app, we just try to be very flexible so people can listen their way. We are strongly committed to taking all the audio content that’s out there and making it available on Sonos.
Q. The one thing about Sonos is that its software has always been about keeping things simple – how does the industry come together to make things simpler for end users?
It’s interesting because we struggle everyday with how to introduce new features, functionalities and services, whilst keeping it simple, and we don’t get things perfect by any stretch.
If you think about our app and what we’ve added to it, I think we’ve complicated it at times at different points so you’re always learning. We’re really looking at what is best for the consumer experience as we try things out. I think we’re getting better at starting to do more in the beta testing area to test ‘Does this work?’ and ‘Does it resonate with consumers or not?’
“…the reason why we added voice control is because we realised this was going to be another way to get to their music faster”
Even for us, if it’s beta testing, its ultimately trying to make sure we’re not overcomplicating the experience and keeping at the core what really matters. One of our principles is around time to music, and the reason why we added voice control is because we realised this was going to be another way to get to their music faster, and it has allowed people to be able to do that. And technology, whatever it may be, that allows people to get to their music faster is a good thing.
So how do you do that? It may be against human nature to embrace things that are changing or seem different, but I think embracing that change and being flexible and adaptable and thinking how you can use something to create new things that are better for the customer is essential. It’s something all of us need to do in the CEDIA channel to, and certainly what I try an idea I try to instill inside the company.
Q. Speaking of voice control adoption, what is the role of voice in making this happen, and who enables this to happen?
I think we’re in the really early days of voice, because right now you basically have to learn a syntax to talk to Alexa or Google Assistant. I think the Josh.ai stuff is interesting because it gets more ‘human’ – I think that’s really where it really starts to explode, as things sound more human it’s easier to talk to as the language is more natural.
I think we have a long way to go in that area, but I think there’s a lot of investment that’s happening – obviously from Amazon, Google and players like that. I think there’s going to be a lot of services out there so that’s why we’ve built a hardware platform and software platform that allows multiple voice systems to operate simultaneously on products like the Sonos One speaker or Sonos Beam soundbar, because we don’t believe there’s going to be one to rule them all, but ultimately, multiple out there and you might call on one to do something, and one for another thing.
I think there’s going to be a lot of change in this market in the next couple of few years in and I think installers thinking about how you can help customers through that will find great opportunity. It’s also critical to make sure it doesn’t become a bad experience. At times it can, and even as we’ve delved into it, we’ve found some gaps in customer’s finding the language needed to be just right. However you can help people manage through that, you’ll be even more valuable to the consumer. But it’s early days and its still kind of messy, and we’ve got a long way to go with it.
Q. Working with Amazon, Google and even Apple, and incorporating their technologies into Sonos, how do these collaborations fit with Sonos’ strategy going forward?
I think its down to choosing one path or the other – you can either embrace these things and bring them on to your platform, or you lockdown control. We’re of the mind that it’s better to embrace these things, and if people are using these Alexa, Google or Siri, let’s put them on our platform.
We did the same with music services and we’re doing that with podcasts and audiobooks – we’re trying to bring all the content to the platform because we think the customer wants access a range of things. If we can do it in a viable way that still doesn’t overcomplicate the experience, then I think that’s a good thing.
“…with our work with Amazon, there was a lot that had to be built by both Amazon and ourselves to create a great Alexa experience across the whole Sonos ecosystem”
Of course it does present a lot of challenges. Even with our work with Amazon, there was a lot that had to be built by both Amazon and ourselves to create a great Alexa experience across the whole Sonos ecosystem, and we’re going through the same thing working with Google Assistant now. It comes with a degree of complexity, but we try to shoulder as much complexity as possible so that installers and consumers don’t have to deal with that, because that’s where it all starts to trip up and fall apart. One of the things we pride ourselves on is trying to make sure that all of our installers don’t have to be going back into people’s homes unnecessarily to deal with issues – we want to be known for our reliability and longevity. We think it's better to embrace these trends then try and be everything to anybody.
Q. Do you personally, and on wider level should people, worry about people listening to you?
I don’t worry too much about it personally because I operate under the principle that anything I write down or say, someone’s going to get that information. In this day and age, I just assume someone’s listening and that’s just how I operate, so I don’t get overly paranoid.
I think there are people that are rightfully concerned about it. I think people are awakening to what’s actually out there which I think is quite interesting. I do think that as a society and world we’re going to go through a period of trying to hash out who owns your data, the value of giving that up to all these different services and the advertising revenue that they get (‘should I get a portion of that?’).
I have all of the voice platforms in my home to see how they are experimenting with things because I want to learn as well through using them. So, I don’t worry too much and I work with all these companies to try and understand what they’re doing. I know that certain people do, however, so that’s why with the One and the Beam we made it so you can turn the mic off and its hardwired, so when you turn it off it can’t be fooled – the light goes off and it is actually off. Of course, with most companies when you turn it off it can actually be spoofed via software so a hacker could possibly get in and listen on a lot products, and we said we didn’t want that as we’re in some of the most sensitive homes in the world (e.g. government people), so we needed to do it in a way that was more foolproof.
Q. What’s the company ethos you hope to instil as CEO of Sonos?
The reason I’m here and the reason most people at Sonos are here is music.
I had the product for two years before I joined the company, and when we set it up and then started using it the difference was clear. In Canada, we had multi-room systems that I could use and thought were great, but they were very complicated. We then we moved to England and got Sonos and everyone – including my wife and kids – could use it and it was so simple. The music was therefore playing so much more, and I realised it was something special.
When I eventually met John MacFarlane, our founder, we bonded over music and the ideals of building a company among other things, and that’s why I’m here too. And you’ll find that with most people at Sonos, we all have a story about experiencing the product or the people that led them to be here, and I think that’s special. As all installers know, in our business, it’s all about being connected to and passionate about what we do. We’re all passionate about filling homes with music, and that’s what we want to do at the end of the day.
Patrick Spence has been CEO of Sonos since 2016, and joined the company 2012. In conversation with CEDIA board member and president & owner of installation company, Southtown Audio Video, Heather L. Sidorowicz, he answered questions submitted by members of the CEDIA community at a special expo event.