The next big smart home innovation is right under Amazon’s nose

2019 was a great year for Alexa. Amazon launched half a dozen large Echo speakers and shows, considerably completing its list of voice products. Amazon’s voice assistant also continued to mature, adding new creative skills like Alexa Guard and a Food Network Kitchen app. And yet, the question that many of us who cover the tech industry increasingly feel bouncing off the back of our minds is, “What is the next real innovation?”

In spite of all new Amazon products and the Google’s reworked smart home platform, 2019 finally felt like an iterative year. Everything improved, but no important new concepts were introduced. We’ve had voice assistants since 2011, smart speakers since 2014, smart displays since 2015, and smart home integration long before all of those. So what is the next great invention? Augmented or virtual reality? A voice application environment?

Rather than looking to technological advancements, in the tradition of the iPod or Echo, to understand the future potential of the smart home, it is time for smart home developers to look at the breakthroughs in distribution, which is already essential to the Amazon DNA.

In short, the smart home market doesn’t need a new Echo. You need a Netflix.

Increased subscriptions.

In 2007, Netflix harnessed the increasing power of the Internet to launch a streaming service that offered popular movies and TV shows on demand, through its online platform. Thirteen years later, amid theater stops due to the coronavirus, streaming services like Netflix and its progeny (Hulu, Amazon Prime Video, Disney Plus and HBOMax, among others) have replaced or are in the process of being replaced essentially all major forms of film and television distribution.

In other words, despite the fact that television and cinema have evolved in recent decades, the most important innovation has been their distribution paths. In fact, online distribution is precisely what has facilitated further innovation in artistic form and evolution in spectator practice.

The subscription model has been exceptionally disruptive in the entertainment industry, but has also proven profitable in many other retail spaces that feed dozens, if not hundreds, of popular clothing, food and toy brands. These companies allow customers to try new products at reasonable prices, reducing much of the time typically associated with research, purchasing, and ultimately making difficult decisions. In fact, in the smart home niche market, where buying a simple light bulb can lead to articles on color temperature and power, ecosystem compatibility, and voice control, a subscription box model seems to make perfect sense. .

Also, where subscription services often require customers to search for them online, many people log into Amazon Prime daily, whether it’s to stream shows or order household items. Amazon is in a unique position to reach these people, who are curious to sign up for something that piques their interest.

So why haven’t they?

Subscribing to a smarter future

The key to subscription services is the monthly price. Few people worry that five dollars will be automatically loaded from their checking account every month; many more care about 50. That is why Netflix and other streamers are so cautious about raising the price of their services, even by a dollar or two, and that is why streaming services are more popular than teller services. subscription with much more expensive monthly rates. .

Smart home technology has never been cheap. The original Amazon Echo was $ 180, and the original Nest Learning Thermostat was $ 250. I have worked with colleagues to install smart bulbs and displays in CNET’s smart home, and I can tell you and everyone how quickly they add up. those costs.

And yet the situation is changing: Smart bulbs cost less than $ 10 these days; you can find smart speakers for $ 20 during the holiday seasons (and often free with other purchases); and more recently, smart cameras are down in the $ 20 range, too. My colleague Megan Wollerton recently wrote that the era of the $ 200 smart camera is overBut really, the same could be said for almost the entire smart home.

The other problem is integration: Most subscription box services don’t include products from all different brands, and smart home products are notoriously difficult to integrate well.

But Amazon has already started branded devices to simplify this process, including smart plugs, light bulbs, cameras, and even a microwave.

So what would a subscription service look like?

A $ 15 a month fee, which is a dollar cheaper than Netflix’s premium plan, could easily help people start filling their homes with smart home gear. Make it an Amazon Prime add-on that comes with a free Echo Dot or smart bulb, and customers struggling with quarantine monotony will probably give it a try. Within a year, with a $ 180 down payment and short installs once a month, average people could have a dramatically different home experience.

The experience could even be personalized. In the same way that food delivery services allow you to choose from a limited menu every week or month, smart home subscribers can select more, for example, security-oriented devices for the first few months, before switching to devices lighting or kitchen.

Such an approach would echo Amazon’s aggressive sales of the Dot speaker, which is often free during Prime Day and Black Friday sales. A crucial motivator for Amazon to get Echo Dots in homes has been to claim real estate on the counter before people knew they wanted a smart speaker. The result is that Amazon maintains an incredible advantage over competitors like Google and Apple, even when they launch smart speakers that could be better than Amazon’s.

Likewise, if Amazon can get smart home devices in homes now, it could claim homes for its brand ecosystem before competitors have a chance, to a greater extent than it already has with the Echo.

Should Amazon do it?

Here’s the big question: should device subscriptions be the next big innovation in the smart home? From a business perspective, the answer is yes.

2020 has seen massive increases in online shopping, particularly through Amazon, and the tech giant is already using its Prime service to distribute Amazon-branded smart home devices more widely. An Amazon spokesperson told me, “We often bundle Echo devices with smart home products on customer detail pages. For example, on the Echo Dot detail page you can turn it into a smart plug or smart light pack for $ 5 additional “.

You can also bundle an Echo Show with a Food Network app subscription or smart plug. And Amazon has shown a willingness to practically give away smart speakers to encourage people to subscribe to an Amazon service for even a single month.

The only risk is that the smart home could be late for the game, since subscription fatigue is set on clients. But norms and expectations change over time. Ten years ago, we thought a couple of hours of screen was a lot. Today, most of us spend hours looking at our laptops, phones, and televisions without a second thought (for better or for worse). Similarly, Netflix felt like an exceptionally good deal eight years ago. Today, there are more television transmitters than ever, indicating the degree to which customers continue to respond to the model, even when prices rise.

Whether or not such an innovation would be Okay for people or the smart home industry it’s a different question. As Netflix introduced what many hailed a new Golden Age of television, it also changed television viewing standards and reformulated the film industry in its image, an image that has left many filmmakers ambivalent about the future of the medium. .

A subscription-based smart home market could be great for the industry, leading to more competitive pricing and increased customer interest in what may seem like an inaccessible suite of products. In a retail category full of hard-to-understand devices, a service like this could slowly introduce new products based on customer interests, all of which are guaranteed to work with your Amazon Echo speaker.

On the other hand, filling people’s houses with connected devices that they don’t fully understand could degrade security and privacy.

The question of the next big innovation has been lurking in the shadows of the CES talks and Zoom calls with industry experts for years. Thanks to the mystique of characters like Steve Jobs, those conversations almost always orbit the next “smart technology.” But perhaps, in an industry that few people really understand, we’d be better served by something simpler and a little less brilliant: smart distribution.