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Smart Speakers Welcome to the Age of Ask… 2018 Where We Will Ta K E Y O U

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SMART SPEAKERS WELCOME TO THE AGE OF ASK… 2018 WHERE WE WILL TA K E Y O U The Australian What does a What is a Smart Key Takeaways Audio Smart Speaker Speaker? Landscape do? What does this What does this Smart Speaker Summary mean for our mean for SCA? ownership clients? KEY TAKEAWAYS Smart Speaker uptake is still People are listening to more audio Smart Speakers are giving in its infancy in Australia since owning a Smart Speaker brands a new personality • With only 5% penetration, Australia is far • Smart Speaker are becoming another • 70% of Americans are listening to more audio behind the USA (17%) and Canada (8%) in member of the family, with consumers since owning their Smart Speaker. terms of Smart Speaker ownership. attaching human-like traits to their device. • 28% of Americans are now listening to more • The 25-54 age group are the most likely to news/talk since getting their Smart Speaker. own a Smart Speaker in Australia currently. • Humans have developed four emotional spaces that Smart Speakers provide them • Music streaming is the most common with – provide trust & reliance, provide the interaction Smart Speaker owners are having ability to control, provide fun, and provide with their device. emotion & intimacy. • These devices allow brands to create a deeper, more engaged relationship with their consumers. Source: Slide design – hislide.io What is a Smart Speaker? What is a Smart Speaker? A Smart Speaker is a device that can be connected via WiFi or Bluetooth to play music, provide answers when verbally spoken to, or even control parts of the home via a built-in "home assistance" feature. These devices are the latest technological advances in the minds of marketers worldwide. Whether it’s being used as a source of music, entertainment, or information, there’s no ignoring the speed of their uptake in the global market, as well as closer to home in the Australian market. Source: Lauren Vetrano. 2018. Alexa: who are Smart Speaker owners? There are four major players in the Australian market today. Amazon Echo Apple HomePod When: Amazon released the Amazon Echo When: Apple released the Apple HomePod into the Australian market in February 2018. into the Australian market in February 2018. What: There are currently 4 models in What: There is currently 1 model in market: market: Amazon Echo ($149), Echo Dot Apple HomePod ($499). ($79), Echo Plus ($229), Echo Spot ($199). When: Google released the Google Home When: Sonos released the Sonos One into into the Australian market in July 2017. Who: The Apple HomePod uses “Siri”. the Australian market in October 2017. Who: The Amazon Echo uses “Alexa”. What: There are currently 3 models in What: There are currently 4 models in market: Google Home ($199), Google Home market: Sonos One ($299), Play:1 ($299), Mini ($79), Google Home Max ($549). Play:3 ($379), Play:5 (749). Who: The Google Home uses the “Google Who: The Sonos Smart Speakers use the Assistant”. Amazon “Alexa”. Google Home Sonos Source: 1. Amazon Australia. 2018. 2. Google Australia. 2018. 3. Apple Australia. 2018. 4. Sonos Australia. 2018. The Australian Audio Landscape THE CURRENT To fully understand the future, we need to know what the current AUDIO Audio Landscape is like. Which mediums are the strongest at the moment in terms of both LANDSCAPE reach (Penetration) and amount of listening (Consumption). That information is already available through industry currency data (‘Share of Audio’) from GfK and it provides a deep understanding of the Penetration and Consumption landscape. Despite very strong headlines, Smart Speakers are still only in their very early stages of adoption and usage. Share of Audio – % people who listen daily (daily reach) -1.3 -3.1 +2.0 +0.1 -0.5 -0.3 Radio has 4 times the daily Radio reach of the combined Podcasts streaming services 68% Owned Music (Paid and free service) Radio is still king when it comes to Australian share of Music Streaming audio. TV Music Channel 19% Online Music Videos Music streaming (Spotify, Apple Music) is seeing the largest increases in this space, however currently has the 3rd highest share of audio. 15% 6% 6% 4% Source: GfK Share of Audio 2017, P10+ Average daily time spent listening -0:02 -0:01 +0:03 -0:02 -0:01 0:00 Radio continues to dominate, Radio with listening six times longer Podcasts than the streaming services 2:10 Owned Music (Paid and free service) combined Music Streaming TV Music Channel Music streaming (Spotify, Apple Music) is seeing the Online Music Videos largest increases in this space, however currently has the 3rd highest average daily time spent listening. 0:25 0:22 0:06 0:06 0:04 Source: GfK Share of Audio 2017, P10+, Hrs:Mins Rogers Innovation Adoption Curve: Based on Past 7 Days Usage The Adoption Curve is an important tool Streaming Video in predicting technology penetration & (42%) growth rates. Streaming As indicated here, Streaming Video is Audio really the only channel we study entering (35%) into rapid acceleration, but Streaming Audio (Music) is close behind. DAB+ Podcast (12%) Smart (9%) Speakers (5%) Brave consumers, Opinion leaders try out Thoughtful people, but accept Skeptical, will use only when the Traditionalists, will only accept only if pulling the change new ideas, but carefully change more quickly than average majority are using it. the new idea has become mainstream or tradition Source: SCAR Digital Media Report, November 2017, All People 18-54, National Metro Markets. N=1487 Q: “And which of the following audio or video services have you used in the past 7 days?” Smart Speaker ownership Smart Speaker ownership in Australia is still in its infancy AUSTRALIA currently. While there’s still very low Smart Speaker penetration Ownership [2018] in Australia, people aged 25-54 are the most likely age group to own a Smart Speaker currently. 6% 5% 5% 3% Total 12+ years 12-24 years 25-54 years 55+ years *Please note these results are based on People 12+ living in Australia Source: Edison Research. 2018. The Infinite Dial Australia 2018 (People 12+ N=1009. National) Smart Speaker ownership in Australia is still behind ownership in the USA and Canada currently. Ownership [2018] 17% Ownership of a Smart Speaker device in Australia is still very much behind ownership in the USA and Canada. 8% 5% USA Canada Australia *Please note these results are based on People 18+ Source: Edison Research. 2018. The Infinite Dial Australia 2018 (People 12+ N=1009. National) Looking at Smart Speaker awareness, the Google Home AUSTRALIA has had a strong head start in the Australian market. 3 in 5 Australians are aware of the Google Home, Awareness [2018] while only 1 in 4 are aware of the Amazon Alexa. 61% 28% Google Home Amazon Alexa *Please note these results are based on People 12+ living in Australia Source: Edison Research. 2018. The Infinite Dial Australia 2018 (People 12+ N=1009. Australia) 83% of SCA listeners are aware of at least one Smart AUSTRALIA Speaker device. 80% Awareness [2018] 76% 73% 58% 59% 57% 51% 48% 44% 21% 17% 17% 14% 14% 11% 2% 1% 2% Google (Google Home, Google Siri (Apple HomePod) Alexa (Amazon Echo, Amazon None of these Sonos (Sonos One, Sonos Other Home Mini, Google Home Max) Echo Plus, Amazon Echo Dot, Play:1, Sonos Play:3, Sonos Amazon Echo Spot) Play:5) People 18+ Hit listeners Triple M listeners *Please note these results are based on People 18+ SCA listeners living in Australia Source: SCA Research. 2018. Audio Landscapes Study (People 18+ N=7025, Hit listeners 18+ N=3478, Triple M listeners 18+ N=3547. National) But Smart Speaker ownership is predicted to increase quickly… AUSTRALIA Half a million Australian households currently own a Smart 23% Speaker device, with predictions to hit 3 million households by 2022. of Australians will own a Smart Speaker by the end of 2018 Source: 1. SBS News. 2018. At home, DVAs are outsmarting smartphones | 2. Telsyte. 2018. Australian IoT@Home Market Study. 12% of SCA listeners own a Smart Speaker device. AUSTRALIA 69% Device ownership [2018] 66% 62% 17% 19% 15% 15% 16% 13% 12% 11% 8% 4% 4% 5% Google (Google Home, Google Home Siri (Apple HomePod) Sonos (Sonos One, Sonos Play:1, Other Alexa (Amazon Echo, Amazon Echo Mini, Google Home Max) Sonos Play:3, Sonos Play:5) Plus, Amazon Echo Dot, Amazon Echo Spot) Total People Hit listeners Triple M listeners *Please note these results are based on People 18+ SCA listeners living in Australia Source: SCA Research. 2018. Audio Landscapes Study (People 18+ N=7025, Hit listeners 18+ N=3478, Triple M listeners 18+ N=3547. National) So what are the barriers to purchase of a Smart Speaker? USA Security 36% Women (38%) are more likely to be worried about the Price 32% security of Smart Speakers than men (33%). Ease of use 13% Digital product reviews from users 8% Product reviews from tech publishers 6% The biggest barrier to purchase of a Smart Speaker in America is security. Popul- arity 3% These concerns can involved people being worried that Smart Speakers are always listening, that somebody could be using their device to listen in on their conversations, or that it gives people access to their home and personal information. Design 3% Source: McAfee. 2018. New Security Priorities in an Increasingly Connected World (N=1234. United States of America) Smart Speaker owners are seeing a need for more than one device in their home. USA NUMBER OF SMART SPEAKER DEVICES OWNED ONE 58% While 45% of American Smart Speaker owners are planning to purchase an additional Smart Speaker device TWO 24% THREE OR MORE 2 in 5 American Smart Speaker owners 18% have 2 or more devices in their home Source: NPR & Edison Research.
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