Voice Devices & News Media: Play or Hold?

Amazon’s Alexa has over 20 million devices in consumer homes, Google Home isn’t far behind. The tech giants are playing with voice devices and services. The Echo has over 30,000 skills. Then there was the creepy demonstration of Google’s advances with AI a few weeks ago. If we follow the hype of the tech pundits and research houses like Gartner and Forrestor, by next year no one will use a computer or a smartphone and we’ll be having wonderful conversations with each other, Siri, Alexa and Google. It will be a utopia of voice. Except we know it won’t. So where does voice fit into the media mix for news media and publishers?

–

Business Objectives

Amazon and Google hold the market share with 30M Alexa’s and about 7.5M Google Homes. Apple, as usual, is being a bit coy, but numbers suggest a lower than anticipated uptake. Amazon launched their device with a business objective to sell products and provide purchasing convenience. The quality of the speaker was secondary. Google focused more on general purpose with a better quality speaker. Apple focused on music and the highest quality of speaker.

–

Only Apple has really focused on content. Amazon’s focus is products. Now Google is looking to figure out it’s own revenue model. We’ll discuss this later. What this really says is that the long-term economic and business models for home speakers is varied and not yet proven.

–

Putting Voice in Context

While we have two very defined business models (Amazon and Apple), Google’s isn’t quite as defined. What they are all doing right now is experimenting to a large degree and using consumer interactions to train their AI engines (Artificial Intelligence.) It takes an incredibly, mind-bogglingly large amount of data to train these AI engines. No doubt all three are in this for the long-haul.

–

The Advertising Revenue Conundrum

Through any of these devices, a consumer can stream music, podcasts and internet enabled radio stations. Recently, Google announced it is looking into voice advertising and has enabled it with Doubleclick it’s programmatic advertising service. Apple is also reportedly exploring this option. For publishers/news media, this is threat and opportunity and further stresses the tension. It will likely further erode advertising margins of major news media media.

–

How Should News Media Companies Play

News media (from newspapers to magazines) who are more digital savvy, will start experimenting. The cost of entry is fairly low. Google is accepting some publishers to deliver news, but is being very picky about it, so qualifying means you’ll need a solid plan.

–

So the question is, should you really get involved? Short answer is maybe. For major brands, it’s almost a must. For specialty publications and smaller news media, there is opportunity but it needs to be figured out. Until the advertising models are fully defined, sponsored content may be a way to help mitigate the risks and costs.

–

We anticipate that Amazon, Google and Apple will have defined ad revenue models and likely subscription models as well. But don’t plan on huge audiences right now. Consumers are still deciding on whether they want to more broadly adopt the technology. And the jury is out. They may be buying the devices, but how much are they using them? Checking out buy-and-sell classified sites in 10 cities across Canada and the United States and we found quite a lot up for sale.

–

So for now, be aware and experiment. That way, you’re ready and if voice devices do take off, you’re going to be ready.