Sonos
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Sonos has launched its first in-house music streaming offering: Sonos Radio, a digital streaming radio service that includes both existing radio stations from TuneIn and iHeartRadio, as well as its own original programming through three new products including two ad-free offerings and one ad-supported option.
The original streaming options from Sonos include Sonos Sound System; an ad-free single station hosted by Sonos itself, that will play “new and well-known” music, along with snippets of stories from artists about their music, as well as hours guest-hosted by select artists themselves. Sonos says this is all about mixing crowd-pleasers with the occasional song you might’ve missed, in a bid to create a single stream that will have broad appeal.
There’s also Artist Stations, which also don’t have any ads, and which are hand-curated by artists and feature a selection of songs they love or that have inspired them. The first such station, debuting with the Sonos Radio launch, is Thom Yorke’s ‘In the Absence Thereof…’, and there are more to follow in the “coming weeks,” including stations from Brittany Howard of Alabama Shakes, David Byrne and more.
The final component of the original Sonos streaming content is Sonos Stations, which include over 30 dedicated genre stations. These are also free, but are ad-supported, so you’ll hear the occasional promotional message throughout the stream, kind of like you get with Spotify’s free tier.
To date, Sonos has acted strictly as an integrator for the services of others, operating the platform layer to provide in-house, multi-room streaming via its Sonos speaker and audio equipment products. This marks its first foray into doing something on the services side, so it’s a big change. I asked about whether this signals further moves into streaming, including through a potential paid premium offering with on-demand content, which would more directly compete with some of its biggest partners including Apple, Google and Spotify, and Sonos Product Marketing Director Ryan Richards didn’t shut the door on that possibility.
“This is about lean-back listening, it’s about discovery,” he said. “There are a lot of options for active listening out there, too, and so what we’re really focused on is first and foremost making the best possible radio service for our customers. In the future, we’ll see how that changes, but that’s what we’re focused on now.”
At launch, the global radio option backed by iHeartRadio and TuneIn will be available globally, but Sonos Radio’s original products will only be available in the U.S., Canada, the U.K., Ireland and Australia, with the company planning to expand availability in future. Its in-house offerings are powered by a deal with Napster to use their streaming catalog, and Richards told me that that arrangement also bounds the availability of the services. Sonos is working on signing up additional streaming licensing partners for an expanded geographic footprint and catalogue size, however.
The new Sonos Radio features won’t be compatible with voice control via either Google Assistant or Amazon’s Alexa on Sonos hardware that supports that at launch, though Richards says the company is looking at adding that as a future feature update. Sonos also acquired a startup that built its own smart voice assistant last November, so that could potentially still result in another in-house offering to lessen its reliance on partners at some point in the future.
To get access, anyone with a Sonos system should see the new offering in their Sonos app via a software update available today.
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Now that the final technology IPOs of 2019 have touched down, it’s a good time to start looking back at what happened during the year. We’re hunting for trends as the clock winds down. Here’s one that’s obvious: Hardware startups are still struggling.
It’s cliché to note in startupland that hardware is hard. Everyone knows it. Making hardware is difficult by itself, but as all tech hardware requires software, hardware shops wind up needing wider domain expertise than pure-software startups. And that’s hard.
But even if a nuts-and-bolts tech company hits scale, it seems difficult to keep that momentum up.
This year we saw Peloton, a hybrid hardware and digital services company, go public and struggle. Despite a recent public market resurgence, the company is slipping back toward its IPO price. Today its equity is trading down about 6% to around $30 per share. The company’s IPO price of $29 is uncomfortably close to its current value.
2019’s IPO crop also included EHang, a late entry to the market (more here on its debut) that quickly began to lose altitude after it started to float. EHang traded up today, but the firm is still worth less than its IPO valuation, a reduced figure that was dinged during the China-based drone company’s march toward the public markets.
So, Peloton is about flat and EHang is down. That’s not a great mix of results for a year’s IPO class of hardware companies. Looking back in time, things don’t get much better.
NIO, a China-based electric car company (despite making this thing of beauty), has deleted about two-thirds of its value since its late-2018 U.S.-listed IPO. After going public at $6.25, shares of NIO are worth just $2.70 today.
Sonos also went public in the United States in 2018. It traded above its IPO price of $15 at first. Then it fell under $10 per share as 2018 came to a close. The smart speaker and stereo company spent 2019 recovering. It’s now worth its IPO price again, closing trading today worth about $14.80 per share.
If you go back to 2017, however, Roku has kicked ass. After pricing at $14 per share, the TV hardware and digital services firm is trading for $137 per share, a nearly 10x gain. But Roku was moving away from hardware at the time of its IPO, making it a somewhat poor example. Hardware revenues for Roku were just 31% of revenue in its most recent quarter, for example. That figure was 42% in the year-ago quarter. It will continue to fall.
We don’t need to go over what happened to Fitbit and GoPro, I don’t think.
Hardware can make a lot of money. Samsung and Apple make oceans of money from their hardware. Microsoft has managed to make Surface into a real business, with billions of dollars in yearly revenue. Amazon has a big hardware business with both consumer reading gadgets and consumer surveillance devices. Even Google is taking its new phone seriously enough to buy out a chunk of the NBA’s ad slots (I think it’s this one), according to my extensive in-market testing. Facebook is the laggard of the group.
But for smaller hardware companies going public, unless I’m missing a number of recent of IPOs — and I don’t think that I am — it’s a tough world out there.
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The official Sega Genesis Mini is coming in September and hopes to capitalize on some of the retro gaming hype that turned the Super Nintendo and NES Mini Classic editions into best-sellers. But there’s already a modern piece of hardware out there capable of playing Sega Genesis games on your HDTV — plus Mega Drive, Master System and Sega CD, too.
The Analogue Mega Sg is the third in a series of reference-quality, FPGA-based retro consoles from Analogue, a company that prides itself on accuracy in old-school gaming. It provides unparalleled, non-emulated gameplay with zero lag and full 1080p output to work with your HD or even 4K TV in a way no other old-school gaming hardware can.
For $189.99 (which is just about double the asking price of the Sega Genesis Mini), you get the console itself, an included Master System cartridge adapter, an HDMI cable and a USB cable for power supply (plus a USB plug, though, depending on your TV, you might be able to power it directly). The package also includes a silicon pad should you want to use it with original Sega CD hardware, which plugs into the bottom of the SG hardware just like it did with the original Genesis. It includes two ports that support original wired Genesis controllers, or you can also opt to pick up an 8bitdo M30 wireless Genesis controller and adapter, which retails for $24.99.
Like the Nt mini did for NES, and the Super Nt did for SNES before it, the Mega Sg really delivers when it comes to performance. Games look amazing on my 4K LG OLED television, and I can choose from a variety of video output settings to tune it to my liking, including adding simulated retro scaliness and more to make it look more like your memory of playing on an old CRT television.
Sound is likewise excellent — those opening notes of Ecco the Dolphin sounded fantastic rendered in 48KHz 16-bit stereo coming out of my Sonos sound system. Likewise, Sonic’s weird buzzsaw razor whine came through exactly as remembered, but definitely in higher definition than anything that actually played out of my old TV speakers as a kid.
Even if you don’t have a pile of original Sega cartridges sitting around ready to play (though I bet you do if you’re interested in this piece of kit), the Mega Sg has something to offer: On board, you get a digital copy of the unreleased Sega Genesis game “Hardcore,” which was nearly complete in 1994 but which went unreleased. It’s been finished and renamed “Ultracore,” and you can run it from the console’s main menu as soon as you plug it in and fire it up.
Analogue plans to add more capabilities to the Mega Sg in the future, with cartridge adapters that will allow it to run Mark III, Game Gear, Sega MyCard, SG-1000 and SC-3000 games, too. These will all be supported by the FPGA Analogue designed for the Mega Sg, too, so they’ll also be running natively, not emulated, for a true recreation of the original gaming experience.
If you’re really into classic games, and care a lot about accuracy, this is definitely the best way to play Sega games on modern TVs — and it’s also just super fun.
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Optimizely, a platform that offers tools for A/B testing and personalization on the web and in mobile apps, today announced that it has raised a total of $105 million. This includes a $50 million Series D round led by Goldman Sachs Private Capital, with the participation of Accenture Ventures, as well as a $55 million line of credit from Bridge Bank.
Goldman Sachs’s Michael Kondoleon will join Optimizely’s board of directors as a board member.
“We’re excited to reach this milestone because these investments cement our leadership position in the market,” Optimizely CEO Jay Larson told me. “We can invest more in products to put an even bigger gap between Optimizely and our competition. We can expand geographically. And we will continue to grow our team of world-class digital optimization experts. This is a big day for Optimizely and a big day for the experimentation and personalization industry.”
The company notes that about a quarter of the Fortune 100 currently use its services. The company says it now handles more than 6 billion events a day and that its customers have tripled their investments in digital experience optimization in the last two years. Current customers include the likes of Gap, Visa, IBM, StubHub, Metromile, Lending Club and Sonos.
In total, Optimizely has now raised more than $200 million, excluding the line of credit. The additional $55 million from Bridge Bank is a bit unusual, but not completely out of the ordinary for companies at this stage. “Bridge Bank is proud to continue working with Optimizely, a global leader at the forefront of the digital experience optimization market,” said Mike Lederman, senior vice president and western region director of Bridge Bank’s technology banking group. “Optimizely is on a path of substantial growth and the additional capital will help them continue to build market-leading products that are used by an increasing number of top global brands.”
As is pretty much standard for companies at this stage, Optimizely will use the new funding to drive growth.
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Sonos today took the next step in its initial public offering price, setting a range for the shares it intends to sell that will help calibrate the final amount of money — and valuation — that it will have when it begins its trading debut.
This isn’t the final, final step in the IPO process, as this is usually done to test the waters and figure out the exact appetite for the company’s shares when it goes public. Sonos is offering 5,555,555 (a wonderful palindrome of a number) shares, where it will raise as much as $105 million if it prices on the upper end of its range and sells them at $19 per share. The official range is between $17 and $19, but this can go up and down throughout the process — with a drop-off signaling a lack of interest or skepticism, and an increased range a sign of heavy demand. Companies will sometimes lowball their range, though we won’t find out for a little bit where everything lands.
Insiders are also selling 8,333,333 million shares in this initial public offering. Including that, the IPO could end up raising around $250 at the middle of that $17 to $19 range that it’s estimating, including the shares sold by existing stockholders. The proceeds from those shares sold by stockholders aren’t going to end up in Sonos’ hands, so the company itself is only going to net around that $105 million at the top end of its range. There’s also an over-allotment, typically called a greenshoe, that consists of shares sold by Sonos and existing stockholders. That could add a total of $15 million and $22.5 million, respectively, at a price of $18 in the middle of that range.
The company is offering some preliminary estimates for its second quarter, saying it generated between $206.4 million and $208.4 million in revenue with a net loss of between $29 million and $27.1 million (this is probably because the final accounting isn’t finished up as we’re just about entering the front end for earnings season for major companies). The company said it sold between 880,000 and 890,000 products as an estimated range in the second quarter this year, up from 796,000 products in the second quarter last year.
Sonos is nicely positioned as a third-party option in an ecosystem that’s getting increasingly crowded by proprietary speakers from the larger companies that own voice assistants like the Echo, HomePod and Google Home. But Sonos has been around for a considerable amount of time and has clearly built up a significant following to ensure that it could find itself operating as an independent public company. In its fiscal 2017 year, Sonos said it brought in nearly $1 billion in revenue, an increase of 10 percent year-over-year. The initial filing indicated that the company had sold a total of 19 million products in 6.9 million households, with customers listening to 70 hours of content each month.
This is basically the next step in the process as the company continues its march toward making its debut, and we’ll get more details soon enough as to whether or not investors are interested in a publicly traded company that’s known for its speakers.
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In October, Sonos launched the Sonos One, raising the bar on what is already the gold standard in wireless whole-home audio. The big new feature? An integrated microphone that added support for Amazon’s Alexa. However, there was one big caveat: While Alexa was integrated to control music services like Apple Music, Google Play Music, Soundcloud and others, it was missing a major player in… Read More
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