Volareo – The late hour.

Volareo is way too late to have a chance.

• The smart speaker market is already extremely crowded which is likely to ensure that Volareo’s offering disappears without a trace.
• Volareo is a Dutch start-up whose proposition is based on ensuring that musicians get a large slice of the revenue from a song with payment being enabled using cryptocurrencies.
• The device also aims to do all of the other things that smart speakers do, which combined with its volume problem, is where the offering will come unstuck.
• The biggest problem the company has is a chronic lack of scale.
• The device was launched at SWSX in March 2018 with a range of subsequent partnerships being announced as well as an Indiegogo campaign.
• To date, the company has received pre-orders for 227 units with 44% of them going to a single backer, raising a total of $24,907 (see here).
• Assuming no hiccups, the devices will be delivered in 2019.
• This triggers a series of issues:
  • First, Chicken and egg: No artist in his or her right mind will be willing to spend time and effort to sell their music on this platform to a maximum audience of 227.
  • Consequently, only a very few unknown artists will be available for streaming with an easy and fun to use case.
  • Everyone else (virtually everybody) will have to be streamed by connecting a device via Bluetooth and then using Spotify, Apple etc.
  • This use case makes Volareo nothing more than a regular Bluetooth speaker of which there are far better options available at this price point.
  • Furthermore, the platform will be way too small for Apple, Spotify or anyone else to be bothered to make their services work on it leaving Bluetooth as the only option.
  • Second, AI: Volareo has entered into a partnership with an AI company called Raven.
  • This aims to help the voice command functionality to work better than it does currently.
  • In my opinion, Volareo has backed the wrong which will result in third-rate voice functionality.
  • If its management really had an understanding of the market it is trying to address, it would have gone with SoundHound which offers a completely independent voice assistant that is pretty good.
  • This would have allowed Volareo to offer an assistant on par with Alexa or Cortana and better than Siri right out of the gate rather than the lacklustre offering it is likely to end up with.
• Finally, Volareo’s offering has targeted the wrong villain (streaming companies) in terms of promoting the interests of artists.
• I have long believed that the lack of income for artists from streaming has much more to do with the record labels than the streaming companies (see here).
• Consequently, the artists that generate almost all the traffic will be tied into contracts with the labels that will have to expire before their work can appear on Volareo.
• Furthermore, I have also long been of the opinion that Spotify also intends to eventually render the labels obsolete.
• This will mean that artists will be able to reach hundreds of millions of users and earn a much higher share of the streaming fee paid which is exactly Volareo’s proposition.
• Against this, I think Volareo has no chance whatsoever as it is way too late in the streaming music game leaving very little space for a tiny new entrant with very little to offer.
• I also suspect that Volareo will have significant manufacturing issues resulting in late deliveries and restless backers.
• Sadly, I do not see a happy ending for this one.

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