‘We’re a company of music lovers making things for music lovers’
Now the streaming revolution is here, audio specialist Sonos is determined to get people off their laptops and headphones and into quality sound in the home. UK country director John Gahagan talks to Sean Hannam
The UK headquarters of market-leading wireless audio and streaming brand Sonos is rather aptly located in a place with a fantastic musical heritage – The Old Vinyl Factory, EMI’s former record pressing plant in Hayes, Middlesex.
Classic rock bands such as The Beatles, The Rolling Stones and Pink Floyd had their vinyl records pressed at the Art Deco site, which is now part of a planned £250 million redevelopment that will include commercial and residential space.
Sonos’s first-floor offices are very welcoming and have a cool vibe that’s befitting of the brand – products are displayed in a relaxing living-room environment, with sofas and shelves. There’s also a dem room, where ERT meets John Gahagan, Sonos’s UK country director. He joined the business in January 2013 and heads up a team of around 35 people, including sales, marketing and operations.
“We moved here in May – the beauty of this place is the musical history,” he says.
“Over 100 years ago, the Gramophone and Typewriter Company set up here and they started making horned gramophones – that grew into His Master’s Voice, which then became EMI.
“Stereo was developed here – if you Google ‘stereo development’ you’ll find one of the first stereo recordings called Trains at Hayes – it was made 200 yards from us.”
He adds: “The plans for this place are fantastic – it’s going to become a creative, technology- and music-focused site. It’s so right for us to be here.
“There’s a saying in the Sonos business – ‘we’re a company of music lovers making things for music lovers’, which is true. Everyone at Sonos loves music.
“That passion and the innovation that comes with it has kept us where we are [in the market] and, I hope, will keep us there for a lot longer. We have a very strong focus on sound quality, first and foremost, and then we back it up with innovative technology to make it accessible, understandable and controllable for people.”
So, as a music lover, is working at Sonos his dream job?
“Yes – it is. The thing that appeals to me is the music and the technology – I’m a bit of a gadget geek – and the values and the approach of the business.”
Q: Sonos is leading the way in multi-room music products and has been for a number of years. What’s your take on the UK market? It’s one of the growth areas in consumer electronics…
John Gahagan: It’s not just multi-room – it’s audio. I think there’s a general interest in sound. Vinyl and turntables are making a comeback.
For us, it’s very healthy – we’ve been in the UK for around eight years, starting out with just the Sonos Connect products and the Connect app. Then, in 2011, we moved into Play: 5 and the all-in-one range – it’s grown from there.
Going back to the legend of the business, when the founders set it up [in 2002 in the US], they thought the ‘streaming revolution’, to use a cliché, was just around the corner – a year or two away. We’ve been saying that every year until now. Now, we genuinely believe it’s just around the corner.
As a category and as a business, we’ve done incredibly well – it’s brought interest into audio, along with other things that have happened – it’s not just multi-room.
Q: Why do you think it took so long for the ‘streaming revolution’ to take hold?
JG: I think it’s a big shift for consumers. If you’re a music lover, or even just a casual consumer of music, all your life you’ve lived with the idea of owning something, whether that’s been vinyl, cassette, CD or even MP3 downloads, you still had something that was yours.
The shift to streaming is a big mental change – to go from having a collection that’s yours, to having access to borrowing pretty much anything.
The adoption of smartphones and broadband penetration has all come together to the point where we are now – huge innovation in the world of how people access music.
Apple Music is the most obvious incarnation of that and Spotify, Deezer and Tidal are doing some great stuff. There’s a huge level of interest in that world.
People have always been interested in listening to music, but while they’ve now adopted streaming, there are still a number of people who still listen through laptop speakers or walk around their house with headphones on.
We’ve yet to see that full transition to listening out loud and getting back to a really good quality experience in the home. That’s what we’re about – that’s why we’ve been successful.
The way we look at it is that what we’ve done so far is just the starting point. If more people buy into streaming, which we think they will, they will become more interested in understanding that they can listen to that music in really good quality, around the home, in a way that fits in with their life. That means the category – and the audio business as a whole – should go from strength to strength.
Q: Are more people upgrading their audio products to get better sound quality in the home?
JG: I think so – with the later stages of CD, there was a bit of a trend to dumb audio down. Our job is to educate and tell people that there’s a better way of listening.
We know that a lot of people still listen to music through their laptop speakers, which is crazy. At the end of the day, if we can deliver the right quality audio experience, that’s the most important thing – how it sounds.
It’s complicated – to do it right. We’ve put a huge amount of time and resources into the research and development to get a product that sounds really good, streams reliably and gives people simple control over their music. We work with 60 music service partners – for someone else to integrate that many would be difficult.
Our new product [the latest Play: 5] has been completely engineered from the ground up – it’s designed and built to be the best speaker that we can make to stream music out loud in the home. It’s taken about two-and-a-half to three years [to develop]. For us, it’s about getting back to really good quality audio.
We’ve worked with Abbey Road [the London recording studio] and Giles Martin [son of record producer Sir George Martin] – he’s our head of sound experience, which is a great job title. He’s brought the artist and the studio side to us – artists and production engineers spend a huge amount of time agonising over how good their music and mixes sound. If the consumer’s listening through speakers in the home that don’t sound great, they’re not getting what the artist intended.
Our job is not to put a ‘Sonos sound’ on it, but to recreate what the artist intended when they laid it down.
If you’re paying for Spotify and you’re listening to it on your mobile phone, you’re only getting half the enjoyment from that service that you could be getting. If you then go home and listen to it through your laptop speakers, that’s criminal. We have to get people to realise there’s a better way to listen.
Q: The multi-room audio market, which you’ve pretty much had to yourselves for some time, is becoming quite crowded, with some of the big, traditional CE brands, like Panasonic, LG and Samsung, coming into the sector. Is it a challenge for you to stay at the top?
JG: I guess so, but we don’t spend a lot of time worrying about what they’re doing. It’s a bit of a clichéd answer, but we think purely about what we need to do to deliver the best possible home listening experience. We’re very focused on one thing. We don’t do washing machines and TVs – we do audio.
The way I see it, there are two types of competition – there are those who are coming into multi-room streaming and there’s Bluetooth. More often or not, a customer is leaving [a store] with a Bluetooth speaker that’s not necessarily right for them.
Q: What’s Sonos’s approach to retail in the UK?
JG: Retail is a fantastically simple, but complex, business. I come from a retail background – I was at Amazon for seven-and-a-half years and before that, WH Smith. At Amazon, I was working in consumer electronics.
We see that the opportunity from people streaming music is huge and our approach is to partner with retailers to educate and inform all those people who, we think, should be listening to their music in a much better way. It’s a partnership to do that.
For us, the role of a retailer is to inform, educate and provide the best possible experience to their customer – we’re all about the experience.
If you go home and listen to Spotify through your laptop speakers, that’s criminal. We have to get people to realise there’s a better way
If we can find ways with retailers to deliver a better experience to people who are interested in audio, that’s exactly what we’ll do – whether it’s new displays, or staff training and education. Over half of our UK team is out there, on the road, talking to retailers.
We recently held a series of training workshops for about 200 installers and AV retailers. The majority of the training was on networking – it wasn’t specifically on Sonos. We see the AV specialist channel as a big area, moving into connected devices. It’s a huge opportunity for retailers. For independents, it’s a massive opportunity, because people’s home networks aren’t always as reliable as they want them to be. Even at its most simple level, troubleshooting networking problems is difficult. There’s a good opportunity for people who can help people with that and then bring [connected] devices into it…
Q: Do you ever envisage a time when Sonos will open its own dedicated stores or shop-in-shops?
JG: Possibly – yes – if we think that’s the best way of getting the experience across. I don’t think we’ll ever get to the stage where we’ll have 20 or 30 products. Our goal is to deliver the best possible audio experience to a customer in the simplest way. If shop-in-shop is the best way of delivering an experience, then I couldn’t see why we wouldn’t do it. At the moment, a lot of our emphasis is on training and educating store staff – that’s huge for us.
Q: Where is the multi-room audio market heading in the future?
JG: I’m a great believer that history repeats itself – streaming music has grown enormously.
It’s quite hard to get a handle on how many people are streaming in the UK and how many are paying for it. We reckon there is something like five or six million people paying in some way for streaming.
When you think of that as a proportion of the population, it’s still quite small. We think that will grow, so that at some point in the not too distant future, it will be heading towards a billion people streaming globally.
At the moment, there’s a huge amount of innovation in the delivery to customers – Spotify, Deezer, Apple and Tidal – but there’s not much innovation from the labels and content side. There’s still much more innovation to come and we’re just at the start of it.