6 ms·

I just don't see the path to profitability for Alexa. Like, sure, it's neat, but how does it make any money? Do they sell the devices at a profit? Does usage

by mabbo 4y ago

I just don't see the path to profitability for Alexa. Like, sure, it's neat, but how does it make any money? Do they sell the devices at a profit? Does usage of the devices lead to increased sales on Amazon.com? Are those sales that wouldn't have taken place on the app/website otherwise?

kevmo 4y ago
Having a microphone/speaker in people's houses seems like a great way to collect a ton of data & guide their behavior.
- lotsofpulp 4y ago
  Is it collecting that data when not spoken to?
  - deleted 4y ago
    [deleted]
  - Godel_unicode 4y ago
    No.
- 0cf8612b2e1e 4y ago
  What behavior do they hope to collect that is not a huge privacy liability with the effort? They already know where millions of people spend their money (not say they will buy, but actually follow through).
- mabbo 4y ago
  No security researcher has ever found proof that they are "always on" and recording everything people say. If they were, it would be front-page news and Amazon would have government investigations. The devices listen for their wake word before ever transmitting data to the cloud. (This is also because the sheer amount of bandwidth needed for always-on would be un-economical even for Amazon).
  - mr_gibbins 4y ago
    This is not strictly true. I examined a master's degree thesis last semester where the student proved conclusively that Alexa devices are periodically spamming bursts of data back to Amazon HQ even when not woken. Beyond a heartbeat, too - MBs of data, not KBs. No clear idea what that data is, though. There's at least a small chance it isn't benign.
    - djbusby 4y ago
      So, mitmproxy that traffic and see what it is?
      - mr_gibbins 4y ago
        Scope of his work didn't go that far, he looked at several devices and Alexa was notably chatty. He was measuring for abnormal data bursts from IoT home devices - included things like smart bulbs etc.
      - ahepp 4y ago
        isn't the point of SSL that you can't do that (assuming the client is verifying certs, etc)?
    - jefftk 4y ago
      link?
      - mr_gibbins 4y ago
        Unpublished. It's still going through board approval. As/when it's put on my institution's open repository I'll post a link. Might be a few weeks though.
        registeredcorn 4y ago
        Interested to hear more, once it's through! :)
- badpun 4y ago
  Smartphones and laptops are already that.
sokoloff 4y ago
When Amazon Music Unlimited was an attempted thing, that was a direct path to monetization that basically only happens if you have Alexa/Echo widely deployed. Otherwise, it seems a tenuous link to increasing sales in retail. (I say "was" because they recently rolled part of it out as a Prime benefit a couple of weeks ago, but I can't figure out the exact difference between unlimited and what's included in Prime [and don't care enough to chase it down], but they are still offering a $9/mo unlimited offering, so there must be some difference.)
- bryanlarsen 4y ago
  The difference is that on Prime it's radio-style only. If you ask for a specific song you get a playlist of songs like the one you requested which may or may not include the song you asked for. A massive limitation for some people, but it fits my usage. It was perfect timing for me. Google just massively raised their prices for Youtube family so I was looking for alternatives.
- ChildOfChaos 4y ago
  The one that is included in prime is basically like spotify free without the ads. You can only play in shuffle mode.
notinfuriated 4y ago
Doubtful they sell at a profit. But do they allow developers for their apps (or whatever they're called, skills I think) to charge money and then take a cut just like any other app store? I'd imagine like any other new product, they're taking a risk and hoping the product takes off with higher adoption so they can earn more. The bet on Alexa always seemed to be that people wanted a hands-off, voice powered way to interact with the internet, and perhaps they could charge for skills (creating their own 'app store') at some point, or earn more on selling products on Amazon because people would enjoy the convenience of just asking their device to buy more detergent or whatever. Not sure I ever really got the premise here, because it was always quite easy to order stuff on my computer or phone. Anyway, I don't work at Amazon so I'm not sure if I'm mistaken about what the idea was. I imagine only some people close to that division would really know.
__s 4y ago
It's an ads vector Eventually people will say "Alexa buy my groceries" Alexa will buy from the highest bidder
- elteto 4y ago
  We’ll need Reg NMS for groceries.
- forbiddenvoid 4y ago
  This has been promised for a long time, but from my perspective, I don't really see this getting any closer to reality. But for what it's worth, I think there's a conflict of interest here. No one is going to believe that Amazon won't prioritize Fresh or Whole Foods for these orders - even if they don't.
  - wastedimage 4y ago
    How is this any different from a physical grocery store deciding on what to position on the ends of the rows due to incentive? People love to act like these problems brought on by the internet are new but all to often it's just an evolution.
    - brewdad 4y ago
      At least my grocery still is reasonably organized and well laid out. If I need ketchup, I know exactly where to go to find all of my options side by side. If I tell Alexa to order ketchup, who knows what brand I'll get or what size? It's possible I might end up with banana ketchup or even mayonnaise given how poorly Amazon's search functions work.
  - vidarh 4y ago
    I use Ocado for my groceries. By default they will deliver based on a combination of things I've marked as "every X unit of time" and a predicted/suggested set based on past purchases. Then I can log in before a deadline to amend it. 90% of the basket typically remains unchanged, and quite regularly I can't be bothered to even log in to check what it's selected for me because I know it'll be close enough unless there's something specific I absolutely need this week. No reason why Amazon can't do something similar. They only need it to be "good enough" that people start getting used to not always needing to ask for it to list what is in the upcoming order.
dsfyu404ed 4y ago
>but how does it make any money? "Alexa, put that on my shopping list" directs spending to Amazon in lieu of whatever the local alternative would have been.
losteric 4y ago
> Does usage of the devices lead to increased sales on Amazon.com? Are those sales that wouldn't have taken place on the app/website otherwise? That seems reasonable. Customers can order directly through the device ("Alexa, order some toilet paper"), that's low friction and lets Amazon rank options to their benefit. Plus regularly using Alexa keeps Amazon primed (no pun intended) in the customer's mind so next time they go online shopping they default to Amazon. Once you're using Alexa, there's an Apple effect encouraging adoption of other Amazon products through ease of use (Amazon Music, FireTV, Audible, etc). Amazon is also monetizing their products with ads, I'm sure that's part of the Alexa strategy as well. Remains to be seen whether there is a "pull back" from smart devices that impacts the play. I was an early adopter of Alexa... at this point no one in my technical circle has proprietary "smart" home automation devices anymore, and the non-tech folks at best use Alexa to search in the Amazon app (mainly because they struggle with phone keyboards)
- jnsie 4y ago
  > at this point no one in my technical circle has proprietary "smart" home automation devices anymore What are they using now, if you don't mind me asking?
  - dehrmann 4y ago
    Probably nothing.
  - pkulak 4y ago
    Home Assistant almost goes without saying at this point.
    - maccard 4y ago
      Does it? I walk in tech circles, and actively work for a startup, and I don't think a single person in my circle of friends/coworkers has a Home Assistant setup, and _most_ have either an Alexa or a Google Assistant of some form.
bonestamp2 4y ago
> Does usage of the devices lead to increased sales on Amazon.com? Yes. We have a few Alexa's and it's helpful to reorder commodities with your voice as you run out of that item (batteries, tape, printer paper, etc). I just add them to my cart and check the price later, but I like it because I'll likely forget to reorder some of those things if I don't do it right away. Apple and Samsung own our pockets with their devices (and associated platforms), Amazon wants to own the spaces where our phone isn't always close by or easy to use (mostly home and car).
forbiddenvoid 4y ago
There was some belief, I think, that there was an app space for voice apps, similar to mobile. I don't think that's necessarily true, and despite Alexa focusing on making it relatively easy for developers to create their own VUI apps, there hasn't been (as far as I know), any real killer app developed in this space.
- philipwhiuk 4y ago
  Apps on voice are so handicapped - it's really difficult to handle any one-time setup. I wanted to see if I could make a voice app that looked for emails on my third-party mail server but it's just not practical with the stateless function requirement. The Echo devices are way way too dumb. The user's Cloud account needs app-accessible storage.
NineStarPoint 4y ago
The most obvious path to me would be other businesses paying to integrate with Alexa. This would have required a level of platform buy in from consumers that never really materialized though, I think.
insane_dreamer 4y ago
Alexa doesn't need to make money. It just needs to be another way to make it easier for people to buy from Amazon than from other websites.
rsync 4y ago
They are localizers. Their actual purpose(s) will be emergent and are still being discovered.

by mabbo 4y ago

kevmo 4y ago

Having a microphone/speaker in people's houses seems like a great way to collect a ton of data & guide their behavior.

lotsofpulp 4y ago
Is it collecting that data when not spoken to?
- deleted 4y ago
  [deleted]
- Godel_unicode 4y ago
  No.
0cf8612b2e1e 4y ago
What behavior do they hope to collect that is not a huge privacy liability with the effort? They already know where millions of people spend their money (not say they will buy, but actually follow through).
mabbo 4y ago
No security researcher has ever found proof that they are "always on" and recording everything people say. If they were, it would be front-page news and Amazon would have government investigations. The devices listen for their wake word before ever transmitting data to the cloud. (This is also because the sheer amount of bandwidth needed for always-on would be un-economical even for Amazon).
- mr_gibbins 4y ago
  This is not strictly true. I examined a master's degree thesis last semester where the student proved conclusively that Alexa devices are periodically spamming bursts of data back to Amazon HQ even when not woken. Beyond a heartbeat, too - MBs of data, not KBs. No clear idea what that data is, though. There's at least a small chance it isn't benign.
  - djbusby 4y ago
    So, mitmproxy that traffic and see what it is?
    - mr_gibbins 4y ago
      Scope of his work didn't go that far, he looked at several devices and Alexa was notably chatty. He was measuring for abnormal data bursts from IoT home devices - included things like smart bulbs etc.
    - ahepp 4y ago
      isn't the point of SSL that you can't do that (assuming the client is verifying certs, etc)?
  - jefftk 4y ago
    link?
    - mr_gibbins 4y ago
      Unpublished. It's still going through board approval. As/when it's put on my institution's open repository I'll post a link. Might be a few weeks though.
      - registeredcorn 4y ago
        Interested to hear more, once it's through! :)
badpun 4y ago
Smartphones and laptops are already that.

sokoloff 4y ago

When Amazon Music Unlimited was an attempted thing, that was a direct path to monetization that basically only happens if you have Alexa/Echo widely deployed. Otherwise, it seems a tenuous link to increasing sales in retail. (I say "was" because they recently rolled part of it out as a Prime benefit a couple of weeks ago, but I can't figure out the exact difference between unlimited and what's included in Prime [and don't care enough to chase it down], but they are still offering a $9/mo unlimited offering, so there must be some difference.)

bryanlarsen 4y ago
The difference is that on Prime it's radio-style only. If you ask for a specific song you get a playlist of songs like the one you requested which may or may not include the song you asked for. A massive limitation for some people, but it fits my usage. It was perfect timing for me. Google just massively raised their prices for Youtube family so I was looking for alternatives.
ChildOfChaos 4y ago
The one that is included in prime is basically like spotify free without the ads. You can only play in shuffle mode.

notinfuriated 4y ago

Doubtful they sell at a profit. But do they allow developers for their apps (or whatever they're called, skills I think) to charge money and then take a cut just like any other app store? I'd imagine like any other new product, they're taking a risk and hoping the product takes off with higher adoption so they can earn more. The bet on Alexa always seemed to be that people wanted a hands-off, voice powered way to interact with the internet, and perhaps they could charge for skills (creating their own 'app store') at some point, or earn more on selling products on Amazon because people would enjoy the convenience of just asking their device to buy more detergent or whatever. Not sure I ever really got the premise here, because it was always quite easy to order stuff on my computer or phone. Anyway, I don't work at Amazon so I'm not sure if I'm mistaken about what the idea was. I imagine only some people close to that division would really know.

__s 4y ago

It's an ads vector Eventually people will say "Alexa buy my groceries" Alexa will buy from the highest bidder

elteto 4y ago
We’ll need Reg NMS for groceries.
forbiddenvoid 4y ago
This has been promised for a long time, but from my perspective, I don't really see this getting any closer to reality. But for what it's worth, I think there's a conflict of interest here. No one is going to believe that Amazon won't prioritize Fresh or Whole Foods for these orders - even if they don't.
- wastedimage 4y ago
  How is this any different from a physical grocery store deciding on what to position on the ends of the rows due to incentive? People love to act like these problems brought on by the internet are new but all to often it's just an evolution.
  - brewdad 4y ago
    At least my grocery still is reasonably organized and well laid out. If I need ketchup, I know exactly where to go to find all of my options side by side. If I tell Alexa to order ketchup, who knows what brand I'll get or what size? It's possible I might end up with banana ketchup or even mayonnaise given how poorly Amazon's search functions work.
- vidarh 4y ago
  I use Ocado for my groceries. By default they will deliver based on a combination of things I've marked as "every X unit of time" and a predicted/suggested set based on past purchases. Then I can log in before a deadline to amend it. 90% of the basket typically remains unchanged, and quite regularly I can't be bothered to even log in to check what it's selected for me because I know it'll be close enough unless there's something specific I absolutely need this week. No reason why Amazon can't do something similar. They only need it to be "good enough" that people start getting used to not always needing to ask for it to list what is in the upcoming order.

dsfyu404ed 4y ago

>but how does it make any money? "Alexa, put that on my shopping list" directs spending to Amazon in lieu of whatever the local alternative would have been.

losteric 4y ago

> Does usage of the devices lead to increased sales on Amazon.com? Are those sales that wouldn't have taken place on the app/website otherwise? That seems reasonable. Customers can order directly through the device ("Alexa, order some toilet paper"), that's low friction and lets Amazon rank options to their benefit. Plus regularly using Alexa keeps Amazon primed (no pun intended) in the customer's mind so next time they go online shopping they default to Amazon. Once you're using Alexa, there's an Apple effect encouraging adoption of other Amazon products through ease of use (Amazon Music, FireTV, Audible, etc). Amazon is also monetizing their products with ads, I'm sure that's part of the Alexa strategy as well. Remains to be seen whether there is a "pull back" from smart devices that impacts the play. I was an early adopter of Alexa... at this point no one in my technical circle has proprietary "smart" home automation devices anymore, and the non-tech folks at best use Alexa to search in the Amazon app (mainly because they struggle with phone keyboards)

jnsie 4y ago
> at this point no one in my technical circle has proprietary "smart" home automation devices anymore What are they using now, if you don't mind me asking?
- dehrmann 4y ago
  Probably nothing.
- pkulak 4y ago
  Home Assistant almost goes without saying at this point.
  - maccard 4y ago
    Does it? I walk in tech circles, and actively work for a startup, and I don't think a single person in my circle of friends/coworkers has a Home Assistant setup, and _most_ have either an Alexa or a Google Assistant of some form.

bonestamp2 4y ago

> Does usage of the devices lead to increased sales on Amazon.com? Yes. We have a few Alexa's and it's helpful to reorder commodities with your voice as you run out of that item (batteries, tape, printer paper, etc). I just add them to my cart and check the price later, but I like it because I'll likely forget to reorder some of those things if I don't do it right away. Apple and Samsung own our pockets with their devices (and associated platforms), Amazon wants to own the spaces where our phone isn't always close by or easy to use (mostly home and car).

forbiddenvoid 4y ago

There was some belief, I think, that there was an app space for voice apps, similar to mobile. I don't think that's necessarily true, and despite Alexa focusing on making it relatively easy for developers to create their own VUI apps, there hasn't been (as far as I know), any real killer app developed in this space.

philipwhiuk 4y ago
Apps on voice are so handicapped - it's really difficult to handle any one-time setup. I wanted to see if I could make a voice app that looked for emails on my third-party mail server but it's just not practical with the stateless function requirement. The Echo devices are way way too dumb. The user's Cloud account needs app-accessible storage.

NineStarPoint 4y ago

The most obvious path to me would be other businesses paying to integrate with Alexa. This would have required a level of platform buy in from consumers that never really materialized though, I think.

insane_dreamer 4y ago

Alexa doesn't need to make money. It just needs to be another way to make it easier for people to buy from Amazon than from other websites.

rsync 4y ago

They are localizers. Their actual purpose(s) will be emergent and are still being discovered.