It’s been a rough six months for Sonos. After the disastrous roll out of its new control app, the multiroom giant has spent much of the past few months on a reputation-saving mission—saying sorry (a bit too late), putting products on hold (briefly, at least), and plowing money into an app fix that still isn’t entirely finished.

A couple of weeks ago, it announced its fiscal 2024 earnings, and they were—perhaps predictably—not too pretty. Overall revenue was down 8 percent year-on-year (YOY), with Q4 particularly bad, down 16 percent YOY. Sonos tried to downplay the impact of its own mistakes, blaming “softer demand due to challenging market conditions” before, in a mea culpa, admitting that “challenges resulting from our recent app rollout” had also played their part.

However, it could be right—there could be bigger things at play here. This is the second year in a row that Sonos has posted a YOY decline in revenue—down 5.5 percent in 2023, despite two rounds of layoffs. “Challenging” was the word CEO Patrick Spence used to describe that year too, and while keeping the momentum following two bumper years during Covid was never going to be easy, there may be something of a pattern emerging.

In its FY24 earnings call, it was even remarked by investors that Sonos had only added 1 million new users this year—that might sound impressive, but it was said to be the lowest in the last “five to 10 years.” And while the overall speakers per household were up to 3.08 from 3.05 last year, with a slowing new user base, how can Sonos continue to make money in what is looking to be a saturated market?

In Good Company

Sonos wouldn’t be the first company to consider whether a subscription model might help to keep things buoyant. Recurring revenue streams make a lot of financial sense—and some huge brands use them to their advantage for that very reason.

GoPro first turned to a subscription model in the face of poor sales in 2016, offering cloud storage for the footage from its pricey action cams. It expanded its GoPro Plus offering further in 2018, and has continued to do so, growing the subscriber base from 160,000 members at the time to 2.56 million as of November 2024. While overall revenue was down YOY in Q3 2024, and layoffs are happening as a result, its subscriber revenue had grown 11 percent, showing the promise this model holds when hardware sales falter.

Games console manufacturers have also found subscriptions to be hugely beneficial to their bottom line. In 2021, during the Activision Blizzard acquisition, legal documents showed Xbox’s Game Pass had brought in a total of $2.9 billion from consoles in the fiscal year ending 2021—around 18 percent of the total Xbox business. This could have risen to as much as $4 billion the following year, it’s been predicted. So with Xbox sales plummeting earlier this year, it’s perhaps not surprising the company responded by hiking the Game Pass price by 25 percent in the same month.

The examples continue. Smart cameras, smart doorbells—they all work to their best when accompanied by the features of a subscription. And while many of those brands market hardware competitively to pull in that subscription base, car manufacturers show that the model can even work on products that cost tens of thousands of dollars. The likes of Mercedes-Benz, BMW, and Tesla all offer subscriptions to access additional features like parking and driving assistance or enhanced functionality.

So would it really be that much of a stretch as something for Sonos to consider? After all, it’s something the company already touts through its Sonos Radio HD subscription, which takes its free offering of 60,000 internet radio stations and adds in high-definition audio quality, exclusive content, unlimited skips and ad-free music for users paying a monthly fee. Sonos Radio HD hasn’t exactly transformed the company’s fortunes, or anecdotally been that popular, but could broadening this into a wider subscription model with even more benefits be an answer for its revenue woes?

Take a brief glance at the community forums over on Reddit or even Sonos’ own website and you’ll see this is already a move that users are concerned could be in the works. And their suspicion isn’t just a baseless hunch either. The way the app works now is completely different to the one before, making a subscription play a technical possibility.

The differences between the app now and then were highlighted in a technical teardown posted by developer and self-proclaimed “Sonos fanboy/hacker” Andy Pennell. He explains that the app has shifted from controlling your devices over your local network to an app that controls your devices via its own cloud. And by diverting everything through Sonos’ servers, it ultimately gives the company more control over the things users can and can’t do with their devices. Such a huge move was a surprise.

“When the new app was announced, I don’t think anyone really expected that all of it was changing,” Pennell tells WIRED. “We thought it might have a new skin on it, people would love it or hate it in the same way they do every time an app design changes, and that would be that. But this was everything—UI, speaker discovery … even the actual APIs that the app uses were changed.

“I have no idea why they decided to do all that at once; as a developer it makes no sense to me. To change the backend and the front end at the same time? That’s a crazy engineering decision right there.”

It has been reported that the release of the Ace headphones had forced the change, and that “technical debt” racked up over two decades meant the app was no longer fit for purpose—but that’s something that Pennell struggles to understand.

“Regarding technical debt: I worked in their codebase for a couple of years, and I would be happy working today with what I saw around eight years ago. I don’t own a pair of the Ace headphones, so I can only speculate [about their requirements]. But from the features of them that I have read about, I don’t see anything that would require a top-down rewrite.”

“Secret Great Plan”?

Even stranger, says Pennell, was the decision to not roll the app back immediately once the usability issues were highlighted by the community. Spence initially said it was an option Sonos was exploring but later explained that “rereleasing S2 would make the problems worse, not better.”

“The desktop apps still work,” argues Pennell. “Third-party apps still work. I have an iPhone 6S, which can’t run the new app because it needs a more recent version of iOS, so I’m running the old app, and it just works fine. So it wasn’t an engineering decision that they can’t roll it back. There’s got to be some other secret great plan, whatever it is.”

WIRED spoke with an ex-Sonos developer who was made redundant in the company’s most recent layoffs. He asked not to be named, to avoid any potential difficulties it might create in him finding another job in the industry. While his role was not directly involved with the app development, he worked alongside the team and helped with testing when things went wrong. He says the amount of money being spent on the app development raised questions for him.

“I was pretty skeptical of the resources we were putting into an app that we aren’t charging any money for—something that isn’t bringing in any revenue. But the only thing that I heard from the folks on the app team about why this was needed, and its value proposition was about the flexibility it offered, and that it opened the doors to things that we couldn’t do before,” he says. “It wouldn’t surprise me though, if there were some subscription model pieces somewhere in there.”

Sonos users worried about such a drastic change to the user experience (and any potential additional cost) may find solace in the fact that Sonos has sent WIRED a firm denial that a subscription model is in the works. However, that is unlikely to stop the Redditors and forum users, some of which are among the brand’s most committed—and technically savvy—customers, from speculating why the colossal app change happened in the first place.

“The underlying reason that something like this [app debacle] can happen to a large, mostly content customer base comes down to one word: monetization,” writes a member called Koolaid on the Sonos Community forum.

“The internet has almost completely converted our entire economy into a ‘subscription’ economy. No-one wants to sell you a widget, then move on to find more people to sell more widgets to. The key to [success] for these companies is now: Sell the initial widget, then attach an ongoing revenue stream to it. The ‘cloud’ is ideal for this. Sonos has been marching in this direction for some time, and the recent app disaster has tipped their hand in the most public and embarrassing way possible.”

With its app almost returned to full health, and its delayed Q4 products now available—and reviewing pretty well, by all accounts—Sonos is no doubt hoping it can finally move past the nightmare of 2024 and deliver its intended devices in 2025, including a rumored TV streamer, a new market for the brand.

It’s a risk, but one that could be worth taking. In many ways, Sonos is still a young company, and one that’s still learning. It might be over 20 years old but it’s only been a publicly trading one for just over six years. It’s gone from introducing a product every three years, to releasing multiple products annually—a step change, and one that has come with steep learning curves about just how a business continues its success when it’s growing so fast.

As we’ve seen from so many hardware companies that have gone before, sustained growth usually requires a change of tack. A new market segment could be one; subscription has so often been another.

Technical debt or no, intentional move or not—there’s no getting away from the fact that Sonos’ app redesign has opened the door to the opportunity for some kind of subscription play in the future. Maybe—just maybe—it could be the unpopular, but brave, move it needs to turn its fortunes around.