Top news stories for Episode 16 (October 26, 2017):
1) Voicebot.ai Story Of The Week: Amazon Alexa Monetization Introduced With $1.99 Subscription For Jeopardy Skill. Motley Fool also sounds off in agreement that this is a good thing, as many other outlets have.
1b) Commentary from The Alexa Conference blog: it's now "go time" for Alexa developers, in light of this week's monetization
2) Amazon releases Amazon Key for its Prime customers, embracing its inner Big Brother and inviting ridicule on social media
3) Google Home gets 50 new kids experiences, including Disney audio game Mickey Mouse Adventure; fairy tale games
4) Fueled largely by Microsoft's partnership with Amazon, Microsoft's Cortana Skills grow 160% over last three months (via Voicebot.ai)
5) Adweek: Facebook's User Data Will Allow The Company To Surpass Amazon's Smart Speaker Efforts
This Week In Voice available via:
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Panel for Episode 16 (October 26, 2017):
Ryan MacInnis is the Director of Marketing at Voysis: the complete voice AI platform.
Brian Roemmele is editor and publisher of ReadMultiplex.com and one of the foremost #VoiceFirst thought leaders.
Bradley Metrock: [00:00:11] Hi. And welcome back to This Week In Voice, Episode 16 for Thursday, October 26, 2017. This Week In Voice is brought to you by VoiceXP, blazing the trail for voice technology. VoiceXP is taking the lead in developing the Alexa skills for some of the best brands in the world. With VoiceXP, all you have to do is say it to revolutionize your marketing strategy. I say this every episode and you really need to check them out. They're doing amazing work. They're at www.voicexp.com and I'm going to give them an extra shout out today because tonight they are all in Seattle right now visiting with Amazon. If you are in the Seattle area, look them up on Twitter … there is a special music concert tonight that they're hosting with a platinum rapper, Chingy, who has incorporated Alexa into his new album. They're blazing trails. You need to check them out. They're VoiceXP. We are thrilled to have a great panel today. First is Brian Rommele. Brian, say hello.
Brian Roemmele: [00:01:19] Hello Bradley, how are you?
Bradley Metrock: [00:01:20] Good, Brian. It's nice to be back in the saddle with you. What have you been up to?
Brian Roemmele: [00:01:25] I just came back from the Las Vegas Money20/20 conference and that was an incredible experience. And I was able to give at least one official talk up there, but many side talks to a standing room-only crowd. And it is just amazing how many people in the fintech world and the banking world and the payments world were all starting to fully understand how voices are interacting with the real world. So that was my experience this week.
Bradley Metrock: [00:01:53] Yeah, it was very interesting just to follow that conference and it looks like you did a great job, so thank you for setting the time aside today.
Brian Roemmele: [00:02:00] Not a problem.
Bradley Metrock: [00:02:01] Our other guest is Ryan MacInnis, director of marketing at Voysis. Ryan, say hello.
Ryan MacInnis: [00:02:06] Bradley, how's it going?
Bradley Metrock: [00:02:08] Doing well, Ryan. Thank you for joining us. You guys are doing great work.
Ryan MacInnis: [00:02:13] Appreciate that. It's been a busy time for us as well.
Bradley Metrock: [00:02:18] And if you missed it, the CEO and founder of Voysis, Dr. Peter Cahill, was my guest on Artificial Intelligence a couple of weeks ago and that episode just hit recently. So check that out on VoiceFirst FM as well.
With that we'll get to the news. Our first story this week is one we've been waiting a long time for. It's the Voicebot.ai story of the week, which is that Amazon has introduced monetization for Alexa Skills, starting with a $.99 subscription for their Jeopardy game … which is free for Prime members, so if you're not a Prime member, you pay. You’re a Prime member, you don't pay. There's a whole chorus line of people who have applauded this move, including the link on ThisWeekInVoice.com from Motley Fool. But Ryan, I want to start with you. What did you take away from this? Do you view this as a good thing just like I do? What are your thoughts?
Ryan MacInnis: [00:03:18] Yeah, it's an interesting thing that they're doing and especially the fact that this is way more valuable for Prime members in terms of the value they get out of this. I think it's really smart for Amazon. I think it's one more way for them to build an ecosystem around kind of what Apple had done with the App Store and realizing that the power is in the ecosystem and not in owning those integrations and seals themselves. But I do think that it's going to be really interesting to see how this plays out. I think a lot of us understand the usage numbers and statistics around how people are using Alexa and the Echo Show and what skills and what experiences will be valuable to both. I don't know if it will be as profitable and prosperous as being an app developer or doing things in that world for iOS and Android. But I do think that it's the right move on their part to kind of move towards a highly valuable skillset ecosystem if they can really reward people to kind of make that better. Because at the end of the day, Alexa's adoption rate is going to increase if the value's there on the consumer side.
Bradley Metrock: [00:04:26] It's interesting, isn't it, that they started with a subscription rather than just a one time purchase? I think that's one of the more fascinating subplots of what's going on. Brian, I'll turn to you on this. I know we both have been clamoring for monetization for some time, although you've had your eyes further down the road than I have. What are your thoughts based on what Amazon has done with this Jeopardy game?
Brian Roemmele: [00:04:53] Well Bradley, I tell you that it is an incredible move forward for Amazon, and they actually have telegraphed a number of signals through this, if not tests, that they're doing. And how users might be able to either see value within the Prime membership or being able to actually just buy or pay for a service directly. So to unpack it ... in my view, I'll go on about the first part. The first part that is it's incredibly important to think about how, unlike anybody else in the space, Amazon has a Prime model built around Alexa and that is the biggest hand that wound up showing up at this point. And what that means is that the whole compensation is going to radically change the entire industry, perhaps. So how does that work? If you look at what Prime has done for movie distribution and music distribution, it becomes sort of an extension to being part of the greater membership. And also with booksellers and e-books, that it has been both a boom and a bust for e-books, and I'm hoping that we don't get the downside that we saw within some of the e-book scenarios.
Brian Roemmele: One of the big questions one might have is: what exactly the splits are going to look like in a subscription model? You know, there have been some debates that it could actually be relatively higher than what we would normally see in an App Store-type of scenario for physical apps in an iOS device or an Android device. But even beyond that, the idea that they started with a subscription model means that there is something of utility in continuity for this particular skill. Jeopardy has enough data set inside of Amazon to know exactly what its use cases look like. And let's be very frank about it. Most of the people that are using Jeopardy on a regular basis and Alexa on a regular basis have, guess what, a Prime membership. So it's almost like what they're sort of codifying the way that they were handing out free money before. And as we and anybody who's listened to earlier shows knows, Amazon for quite a few months was just handing out money to developers they thought were doing good things. And now they've codified it as part of a monetization system and putting it under the Prime umbrella. So that means users don't necessarily have to pay out of their pocket, and that's immensely important in any early ecosystem. And that's why I think one time purchases don't resonate as much under the Prime modality that they're using, this membership modality.
Bradley Metrock: [00:07:41] There's so much that we don't know about this. Even as great as this news is, we assume that it's a $1.99 a month subscription for people who aren't Prime members. So you assume that the creator of Jeopardy gets the lion's share of that. You assume they actually get some of it at all. Maybe underneath the hood Amazon is just continuing to pay and blackbox them out and the only thing that's changed is that they're now charging non-Prime members, and the skill developer still gets the same blackbox check, whatever.
Brian Roemmele: [00:08:26] The other aspect is, how many people ... I have a little bit of my own research on this. How many users of Alexa really are not Prime members? And I think we're probably going to find out one way or another that it's a maybe a high single digit or low double digit number of users. And certainly the early users see it as a reordering voice commerce type platform. Prime automatically locks in there. So really it's just creating better value for their membership, which has become something extremely important for Amazon and I think it's going to continue to be that way.
Bradley Metrock: [00:09:07] So there's two tiers of voice assistants and the way I think about things ... I think of the big mainstream players like Amazon, Google, Microsoft, Samsung, and Apple, then I think of companies like what Voysis is doing, or like what Microsoft AI is doing, and companies that are looking to sort of differentiate themselves on a smaller scale or a one-to-one, a B2B relationship or whatever. But within this context, Ryan … is there any reason in your mind, from a developer's standpoint, that somebody would not be interested in investing in the Alexa platform over one of the other big juggernauts?
Ryan MacInnis: [00:09:47] I don't think so. I think it's actually probably more enticing now to be an Alexa developer with this news. I think the value, to your point about the Prime membership and just the exposure that these developers are going to get as it relates to the value that users have in a Prime membership … I think it's going to be a time that they want to be developing for Alexa. I think that because Alexa has over 70 percent of the market in smart home devices and voice-enabled devices, it means that that is going to be the breadth in which people get exposure to these kinds of things. Where I do think there's going to be a very interesting battle that we're going to come up with is, how many devices will people come up with before people have to pick and choose what they want to develop for? Obviously we've seen Cortana skills jump up 160 percent. We've seen people building things for Google Home and whatnot. So I think to be a developer in this space is really exciting right now, and I think that this announcement actually makes it a lot more exciting for them.
Brian Roemmele: [00:10:47] I agree with Ryan. And I agree with your analysis of the different tiers but, you know, I think it's vitally important that there are these segmented B2B use cases that are out there. I like Houndify, they're doing incredible work. These are companies that tend not to get any of the attention, but are doing things that I think are ultimately going to be useful. I, as you know, am not a believer that there's only going to be one voice interactions system that you're going to have. There is going to be a dominant one, but I believe they were going to be utilizing these things in multiple modalities. So I think all of this just is creating a deeper and richer ecosystem. Without compensation models … and we've said this over and over … without compensation models for developers, there is no ecosystem, and this is a memorial point in time where it started and I will go on record to say, that voice-first monetization, when done properly, when done in the vision that I have, will be largely maybe two times, but significantly larger than the income sources that are coming out of the iOS store as it exists today.
Bradley Metrock: [00:12:04] I completely agree with that, and I think that one great thing about this for Amazon is that it puts everybody else on the defensive once again. So in the arc of This Week in Voice, for the most part Amazon has been blazing the trail, and with rare exception, there's been some things like Google's multiple voice recognition that Amazon has not led on but otherwise they've pretty much led on everything. And now... Brian, we have talked several times on the show before about how many devices are there going to be in the home? I've got smart speakers fatigue. All those sorts of things. And now, I think we've got a new sort of angle on that, and if Amazon moves forward with providing tools that allow everybody who wants to develop an Alexa skill to monetize it with some degree of flexibility … I'm not talking 100 percent necessarily, I'm just talking some … then all of a sudden that's a big timer that Apple and Google have got to catch up to, otherwise there's going to be a point of no return where there's no turning back because everybody is so invested in Amazon, it’d take a year for everybody to catch up. You know what I mean?
Brian Roemmele: [00:13:24] And Bradley, we're rapidly approaching that point. I can't speak enough about how there's an over 7,000 Alexa army right now. These are 7,000 employees that are dedicated to do one thing and that's to build this infrastructure for the Alexa system. That is orders of magnitude larger than all the others combined. But they are not taking it very seriously. There is simply not enough people to hire. And if they think it's an engineering problem - finding more AI engineers - that's where they're really mistaken.
Bradley Metrock: [00:13:54] I wrote a little piece that is on the Alexa Conference blog … by the way, the Alexa Conference is coming up, it's in January, it's in Chattanooga. You should attend, and it will sell out. It is not sold out yet. Tons of great #VoiceFirst speakers and thought leadership.
Brian Roemmele: [00:14:07] I will be there. And everybody listening to my voice ... please sign up. It will sell out.
Bradley Metrock: [00:14:11] Yeah. Chattanooga's such a hidden gem of a place to visit. Anyhow, I digress. I gave a presentation at last year's Alexa Conference too... We had it in Nashville as a sort of a pilot. My presentation was just on different ways the Alexa Skills could be monetized, if the arc of the whole thing followed anything resembling the App Store; and now some of that is starting to come to fruition. And the post that I wrote AlexaConference.com is short. All it's basically saying is that right now, Amazon has shown its hand. It's going to allow monetization of the Alexa Skills marketplace. You've got to get moving if you're going to develop an Alexa Skill because you don't want to wait until Amazon says, "OK. Here you go. It's all available publicly now." You want to get started now while you still have a little bit of time on your side. And that's the point of the article, so check that out.
Bradley Metrock: We will move on to story number two. Not everything Amazon does turns to gold. Sometimes it's good to be reminded of that. Amazon released Amazon Key for its Prime customers. It's a combination of hardware that you can buy that will then allow Amazon to come into your house, and leave packages that you purchased. And Ryan, I'm going to start with you. The consensus is that this is an awful idea implemented and talked about and marketed in poor ways as well. Do you agree with that or do you see this differently? What do you take away from this?
Ryan MacInnis: [00:15:36] I see both sides and I think that it's been marketed super poorly in a time that they've kind of piggybacked off of the news of what I believe was Walmart. Is that who also tried to do this?
Brian Roemmele: [00:15:48] Yes. Walmart and Jet.
Ryan MacInnis: [00:15:50] Yes. The thing is, I think that people are really comfortable with a lot of things that are invasive. But letting someone into your home based on a special smart lock and a camera seems to be a lot to trust. And I think that if you watch the marketing video, it's about this woman who needed to get a gift for her mother for her birthday and she was running late and didn't have time to clean the apartment. So not only did she let cleaners in, but then she let the Amazon delivery person … and you know I just think that this is a stretch. One thing that I do think is smart about it is, if this is tied in any way to their effort to be a bigger player in the logistics space, I can see why this is a big move for them. Because if they can own not only the ordering but the logistics of matching shippers with truck drivers, to then getting a delivery in your home for that end-to-end fine-tuned logistics experience … I think it makes total sense. But I just don't see a short term win for this one and I'd be curious to see what the adoption rate is, especially for Prime members.
Bradley Metrock: [00:16:51] I think this is one of these things where we see Amazon's brand equity come to their rescue. Wnd what I mean by that is Amazon has such powerful brand identity as pro-customer, pro-public, pro-end user that when they do something that is this heinous … (laughter) … I mean it's not like it's that horrible, but the way it was marketed, Ryan, I completely agree, it's absolutely horrible. Think about if Google had done this. Think about if Facebook had done this. People would be screaming. They would be marching on Silicon Valley with pitchforks. But with Amazon, it's just a facepalm and a "You may want to rethink that." Amazon gets a little bit of a pass, here and in several other cases, that other companies don't get. Brian, what did you take away?
Brian Roemmele: [00:17:44] Well, I have a completely different point of view about this and I'm thinking maybe in three dimensions. First off, let's look at the logistic problem as it exists today. About 47 percent of Amazon deliveries are in high density locations, during the hours between 9:00 a.m. and about 5:30 p.m. That correlates exactly to the moments when most people are working and are not at home. Now there is a quagmire that exists, and this is a very large quagmire, and that quagmire is, "When do I deliver the goods to these people? How do I supplant the idea of them going to a local store? And how do I securitize this now? I don't live in a high density area, I'm basically in the country.” But if you live in a high density area and you are not blessed with a doorman or a vestibule that's locked in some way, it's going to be left with a neighbor or it's going to be left on your doorstep unintended. Or you have to wait and pick it up somewhere. Now, a large number of items are stolen off the porches of high density areas, especially when the distributor has their logo on the side. I give you an example of Zappos. There was a known issue in some large cities where these big Zappos boxes were in front of the door … Zappos is an Amazon company, by the way … and it's a guarantee that it's probably shoes or medium to high priced clothing and shoes probably give a medium to high price conversion to cash. Some of those shoes can be instantly converted to cash at a swap meet or on eBay. It was a field day for people dressing up in brown uniforms or blue uniforms and wheeling off this stuff and stealing it. So that was the beginning of this.
Brian Roemmele: But there's a lot more that wasn't talked about. And I think Amazon purposely put this out. They purposely shaped this message. There are no accidents in those videos. There are no accidents in the way they're communicating it. This will all blow over. And the people who this does make sense for will adopt it. The people who it does not make sense for will walk away from it and say, "This is utterly ridiculous." But there's something more going on to this.
Ryan MacInnis: [00:19:57] Yeah, I agree with you completely. And I think that may be even the reason why they didn't spend a ton of money on marketing this ... granted, it’s a company that's going to get media attention no matter what you do. Even if somebody brings their own lunch for the first time in the ten years that they've worked there ... you're going to get that attention. But this has the ability, to your point, to just make lives a lot easier, and as somebody who's lived in both settings before … especially if you're a Prime member when you're ordering things at a higher rate rate than most other people. That seems like a no-brainer especially because of the fact that it’s exclusive.
Brian Roemmele: [00:20:33] And I might add the negative press is good press. The fact that everybody, even on the evening news, is talking about this means that anybody that could ever possibly want to be receptive to this message has heard it. The controversy will bypass the existential problem of strangers opening the door. But let's look at that. We've got to break this down. It's going to take a few moments.
Brian Roemmele: First off, Amazon is opening the door, not a stranger. The "stranger" is actually a vetted Amazon employee, and we won't get into the insurance elements of this, but let's assume they vetted them correctly … which I think they most definitely will for a lot of reasons. They only have so many seconds to get that package in your door. If they breach the transom of that door at the gateway of that door, they're recorded. It's an AI that looks at that person. It will facially recognize that person. They will immediately notify ... this is not part of the press release; I'm talking out of class here … they will immediately notify the authorities. You will not get away with the crime. Now, the only element that one is not thinking about is the shoulder hopper, somebody that sees somebody coming up to that door thinking that Amazon's going to unlock it, then pushes them down and runs into that. But still, that's like an alarm system now saying that there is a criminal in your house and we have video. What if I told you that somebody that’s outside your front door was arrested for a major felony? You'll now be able to know who they are the moment before you answer that door. And a lot of us have family that may have been involved in felonies, so maybe just say Bob's at the door... that crazy uncle Bob. Or somebody on the wanted list, the FBI wanted list, if they have a real picture. All of these images are public domain. And I will promise you that it will ultimately become part of a database, whether that is direct right now with the Amazon Key product, or at some future point. And certainly Amazon Key is just one camera facing the front door. In the future, Amazon is opening up another pathway. And this is it. Home automation. What people really are missing is that Amazon will come in and install this for you.
Bradley Metrock: [00:22:38] Of course they will.
Brian Roemmele: [00:22:38] And by the way, they can do a new TV. All this stuff, right? Think about what this is really doing. Amazon is opening up a shop inside of your house. And a lot of people joked, "Well, I'll just move my house to the Amazon warehouse.
Bradley Metrock: [00:22:55] I saw that.
Brian Roemmele: [00:22:55] It's not too far off. And by the way I think Amazon will be building homes. I will go on record. In the arc of 10 years, we will have an opportunity to buy an Amazon home and probably an Apple home and maybe a Google home. That's the next uncharted territory. Self-driving cars is not the next big thing. Ultimately I think it's going to be homes built with this technology already permeated in every nook and cranny with a modern home.
Bradley Metrock: [00:23:22] The home automation angle of what you just described is interesting. And for those listening who have not subscribed to the Alexa Podcast, one of our VoiceFirstFM shows, go on the Apple podcast or Stitcher or whatever you use and subscribe to that. And when you do that, it's Episode 3 or Episode 4, the one with Andrea Bianco out in Arizona. Very interesting entrepreneur who runs a company called Smart Home Consulting. Her entire business is around installing Alexa-enabled and voice-first automation, not only in existing homes where people are living, but there's a whole angle on it where they install this equipment in homes they want to sell and what they see is that the premiums or the prices that people are willing to pay go up significantly when they do that, and it's very interesting.
Brian Roemmele: [00:24:16] Bradley, what they're doing is actually incredibly brilliant, and you know something? The market is so big, that there can be thousands of companies doing it and it still won't be enough. Ultimately this is the direction ... and the home value increases when you have this automation permeating the house.
Bradley Metrock: [00:24:33] Let's go back a step though. We have a fundamental disagreement on Amazon Key. I think it's awful. I don't want any part of it.
Brian Roemmele: [00:24:47] I agree too, but I'm just saying that we got to give Amazon an award for being able to just put this out there. Very few companies will have the guts to go and do this. A startup wouldn't even have the guts to do this.
Bradley Metrock: [00:25:01] That's the difference. Well maybe but see I'm not into giving Amazon an award for having enough money to not go bankrupt because they executed this idea poorly.
Brian Roemmele: [00:25:11] I don't think it's going to be a poor execution. I think it was designed to be exactly what it's supposed to be. It was not designed to to be attractive to you or I, but it was it is attractive to be for another audience. And in fact they are literally riding the wave of bad publicity as a way of marketing this.
Bradley Metrock: [00:25:28] So I agree with that, like the publicity thing, and yeah, people were upset on Twitter making fun of it and everything, but Twitter people...
Brian Roemmele: [00:25:35] They don't matter. I'm on Twitter all the time and we do not matter to the rest of the world.
Bradley Metrock: [00:25:41] We don't, Twitter people overestimate the importance of Twitter on a daily basis.
Brian Roemmele: [00:25:45] Exactly.
Brian Roemmele: [00:25:45] I'm the first to agree with that, however the conversation around Amazon Key... You discuss it for about five seconds and it instantly turns into conversations about Big Brother. I admit that we're not ready for this yet... and I'm not arguing that some people won't get a lot of value out of this perhaps but... So a little bit of background. My wife orders a lot on Amazon, especially this time of year. And it's like I probably show up on like some Amazon distribution hub or something but even in our case where she's ordering stuff ... the idea of letting somebody into your house... We've got a ways to go before I'm down with that. But this is a great discussion on that.
Brian Roemmele: [00:26:30] I have to ask ... so it is really the slippery slope that we've always talked about on this show of privacy and security. And a lot of people would say to me, "Brian, why are you so concerned about this?" It's because we are going down that slippery slope and you can see my own schizophrenia about this. Yes, I definitely understand the technology. I definitely understand the use cases and I really do applaud Amazon for having the guts to do this mostly because it does have an impact to their brand if it does go the wrong way. I don't think it's going the wrong way. I think it's actually doing exactly what they thought it was. I don't think they were dumb. I don't think they were insulated. They knew, they studied this. But on the other side, yes, we are opening our homes. This entire show is based upon that we're opening our homes to a microphone and now a camera that is always watching always sentient and we need to create protocols and best practices on how this is all going down. Guess what. Not a single one of these companies have it.
Bradley Metrock: [00:27:29] Yeah, let's give them a round of applause for running the numbers and figuring out the potential litigation cost plus whatever other costs that they came up with that may be associated with letting somebody in the front door.
Brian Roemmele: [00:27:44] The bean counter side of it.
Bradley Metrock: [00:27:45] Yeah, those are less then the shrinkage plus all the other replacement costs that they're going through right now. I don't think this got any further than that. I agree with what Ryan touched on earlier about the video that was associated with this, the video I thought was not good.
Brian Roemmele: [00:28:02] It was almost like a comic book, wasn't it? It seemed unrealistic.
Bradley Metrock: [00:28:05] The concept is OK, but the details I thought were missing. Well, we have to agree to disagree on this.
Ryan MacInnis: [00:28:15] Yeah I was just going to say the most interesting thing to me, and Brian, I'm curious on your take on this, is the pricing model for this. It's super weird. like you're going after people that pay monthly or they pay some sort of subscription to be Prime members. They pay to be Prime members and not only you ask them to spend hundreds of dollars on hardware but then you're also charging them a subscription fee for how much cloud storage they have access to or how much history they can access. It seems like there needs to be a little bit more. If we're really going to applaud Amazon for taking taking the leap of faith from this foundation, probably one of those two things.
Brian Roemmele: [00:28:48] This is exactly my point. The model is wrong. The pricing... The one thing that I got to say about everybody in this space is they are really not thinking about the long term impact of the pricing models, including Amazon. And they are a merchant, but they're going to get it right, faster than anybody else who doesn't even have price models. But yeah, what are they really trying to sell here? Well, they're trying to ultimately sell a multitude of things. And by putting everything in the soup pot, if you will, some of these ingredients are conflicting. Some of them don't taste good together. But they're all in the pot together. And there are some that are saying, "Well, we need to bill for this and we're going to have to charge for that." You know what? It should be a monthly, and they give it to you for free. You pay a monthly fee. I'm going to give a secret away right now. Amazon sent me a check. Here's how it works. You pay, I will pick the price right now, $12.95 a month and you get a lock and you get a camera and that's all you get. And they will install it and such. And I can even show you the math and how this works. The pricing model Amazon's doing ... a subscription model obviously for that. And ultimately what it does is ... it's what I call the puppy dog close, like all of us old timers in sales.
Brian Roemmele: Once I install an IoT camera for security in your home, once I prove to you the value of that you're going to want one at your front or your back door and all the other points and you want to be able to pull it up and you now have sold the cameras. This is a puppy dog close. So anybody who works at Amazon, please give me some credit for this. I would enjoy that. But no, it's $12.95, maybe $29.95 to start with and knock it down and all this other stuff flatten out the price model. Live streaming whenever you want it. Archival, maybe up to a year and then sell the AI. What Amazon has, which is extraordinarily powerful, is the ability to take that camera, and not to use it as a video device, but to use as an AI input device so that you can say, "Oh! That's my mom at the front door. Open up." That's where this is going. Mom's at the front door, and you don't need to touch it. She's automatically cleared for this time and this day unless you're running around in the shower and then, you know, whatever. And then you now have an order of magnitude, higher use case of this and this is where it's going. That's why Amazon's doing this. Have no doubts. This has nothing to do with video. It has a little bit to do with security but it has a lot to do with introducing AI into the home. And I'm going to tell you in the arc of 10 years. What we ultimately see what Amazon was doing just like AWS. They were the popularizers of real, practical, and pragmatic functional AI for the average person. And that's what this is at the end of the day.
Bradley Metrock: [00:31:38] Hope that Kool-Aid tastes good on this.
Brian Roemmele: [00:31:44] No Applesauce today at least, right Bradley? (laughter)
Bradley Metrock: [00:31:48] I'm sure this will come up again. So moving on to story number three, we've got to give Google a little bit of credit here. They did have a very interesting bit of news this week. They got 50 new kids experiences including a Disney game called Mickey Mouse Adventure and some other fairy tale stuff that they have added to the Google Home voice first experience. So they're fighting back in their own way. And Ryan, I'm going to start with you again on this. Is this enough to ward off Amazon heading into the holiday season or how did you view this article?
Ryan MacInnis: [00:32:26] I actually loved it Bradley, and the reason why I think it's so great is, as we all know, that everyone is fighting for space inside the home. The earlier someone can use a product, the earlier someone can be associated with your experience like look at the iPad today. While iPads among older folks ... the sales are going down. When you look at people that are under seven years old, their parents are giving them these things to play games on all day long. And as you introduce these speakers and these devices into the home, I think introducing them to Google Home or to Alexa earlier on will help build that brand affinity as they get older and you start to look at... I don't know if you can play games on Google Home when Google is going to roll out their Echo Show competitor and now there is a screen that they can interact with and they start using their voice. And members of Gen Z and younger are actually influential of more than half of the family's household income budget in terms of what they spend money on. So you get these really young kids and teens using these platforms really early on and it totally shapes the way that the family itself uses the technology. So I think it's super smart.
Bradley Metrock: [00:33:32] Really well said. I completely agree. Brian, I suspect you agree as well. Your thoughts?
Brian Roemmele: [00:33:38] Yes I fully agree. I think the ability to reach into the younger demographic is absolutely important. You know, when you think about it one of the high use-cases of voice first systems are children and it immediately sparked, and it still does to this day, incredible curiosity with my children and I've done now 19 research studies with children under the age of 15, teenagers too. And you can just see how this symbiotic relationship develops. And they literally expect it to be in their room, once it's there. And you can hear these dialogues doing homework and interactions of chains of consciousness questions like, "Well, what happens if this happens and this happens." So conversations that you had maybe have with a teacher, maybe have with even with me as a dad. Sometimes some of the big questions I wanted to answer for my younger child, we had to ask the voice-first system but hey, that's life. To actually get more and more things that appeal to children, done the right way which by the way I go back to my protocols and declarations we need to have to establish on how these things are going to happen. Clearly for the consumer, but at least we're moving in the right direction. So I think I applaud it.
Bradley Metrock: [00:35:00] Yeah, that's great. I view this as I sort of indicated at the start is ... this is the angle that Google is going to take for Q4 and it's a perfect marketing pitch. And if they don't have information about these new kids' experiences that differentiate the Google Home from the Echo-enabled products plastered in Lowes, plastered in Walmart, plastered on the web there. They're really missing an opportunity. This is why someone would buy a Google Home as opposed to an Echo and there's not a whole lot of reasons that you would say that right now just in my opinion. But yeah, we all agree this is fantastic.
Brian Roemmele: [00:35:39] I agree.
Ryan MacInnis: [00:35:39] Totally. And Bradley, one more thing. I think it's going to be super interesting to see when you see companies like Disney understand the implications of just kids using Cinderella and Snow White and storytelling and really I think you're going to see this and I'm going to pull a Brian here. I want to make a prediction. I really think that you're going to start to see companies like Disney who are really trying to get on the younger age demographics try to incorporate voice as an extension of something that either Amazon or Google is already doing. So if Google can really penetrate into the households of which these stories and these games, particularly around the younger age, how do you extend that into an in park experience they just opened the park in China that has like 3 million people within a certain mile radius to it, and that's going to be profitable next year. How you extend that voice experience into other Disney platforms I think is going to be one huge avenue for them that I think that they're going to take a huge swing at in 2018.
Brian Roemmele: [00:36:37] Ryan, a double high five for you. Because I do agree with you and that perfect analysis. I would also extend your thesis a little further and say all brands that want to reach out to children need to be on this platform right now and if Disney has not been the rallying cry, it may be too late for those brands. And I really mean that. You have to be on this platform, you have to understand it.
Bradley Metrock: [00:37:00] It touches on a lot of things but it really to put a button on it. Every company, every individual, everybody has got a story to tell. It's a noisy world, but the way you cut through that is through narrative and through storytelling and with this Google Home thing with Disney. These are telling stories that will captivate young imaginations and build brand affinity with Google. Tie them into that ecosystem more than they otherwise would have. But this touches on a big theme, that we will be touching on throughout the rest of the year, into next year. It's why we went out and acquired the Digital Book World business, and specifically Digital Book World Conference that we will be integrating a decent amount of voice technology and voice-first businesses and that whole angle into the publishing realm, because you've got all these companies that are out creating content, and the traditional publishers are creating books. Every company that exists creating white papers, long form content, voice will be part of that. And it's interesting to think that that is a takeaway from a story like this, but it absolutely is because voice is so central to the next level of storytelling, which is interactive storytelling and so it's exciting to explore... And this is just the beginning of it ... so I appreciate y'all's analysis on this. We're going to skip over story number four because it's sort of tied in with story number one and some of the pro-Amazon discussion... I view Microsoft growth in Cortana skills as directly related to their partnership with Alexa that dated back a couple of months ago and the timing matches up.
Brian Roemmele: [00:38:41] I concur. I absolutely concur and that's a great analysis.
Bradley Metrock: [00:38:44] Yeah. So we will conserve a little bit of time and skip straight to the final story here, which is kind of an interesting one, it's an Adweek story about how this particular writer believes that Facebook's user data that they're collecting will eventually allow eventually Facebook to surpass Amazon's voice-first initiatives. And Brian, on this what I'm going to start with you, and then go to Ryan. What did you take away from this and do you agree with the conclusion of the article?
Brian Roemmele: [00:39:17] Well, thanks Bradley. Yes, anybody has heard my voice here and read my stuff in Multiplex Magazine, I've covered this. Amazon is in a great position and Facebook is in a great position. I think Facebook ultimately for a general-purpose voice-first AI based system is probably the most pristine and perfect position. It's their will to act on it. And as you can tell, they're taking their time. A year from now we'll see some of this start to execute. I think we're going to see it by a year from now we'll see how that execution is looking which is going to be pretty fascinating and I think it's going to dominate quite well. And again I don't think it's an either/or. I don't think our expectations are going to constantly be ratcheted up as we see what highly contextual data about an individual works through the system and becomes a personal assistant, a true personal assistant which none of these systems currently are. They're Q-and-A devices and that's a radically different concept. They're like the command line interface before the graphical user interface showed up. In this case, the graphical user interface analogy is dialogue in high context.
Brian Roemmele: So yes, Facebook has this capability right now and they are slowly massaging their ideas. That's best I can tell you officially or unofficially. And I think what ultimately we're going to see, is developing a unique use case that few had thought would have come from Facebook. You know the only thing I disagree with the Adweek, and by the way it's a great story, I think everybody should read it. I just I tweeted that everyone should read this twice. And I really mean that. The only thing I can be critical is the Regina Dugan just left Facebook and they were basing a whole lot about Regina's work there. And Regina came from DARPA, and DARPA gave us the Internet and Siri, ultimately. Siri came out of a DARPA research project. So most of the cutting edge technology that we're all using right now came from the organization that Regina Dugan was operating and she was one of their critically important employees. She left Google, and went to Facebook and about nine months later is out of Facebook, and I can tell you right now, we've not heard the last of her. Her voice will be heard.
Bradley Metrock: [00:41:37] You love you some Facebook.
Bradley Metrock: [00:41:39] Yes I know, and I'm not a big Facebook user but I do know that when they pair social media to a mediated AI environment they are going to really have rocket fuel there and we're going to start seeing the low hanging fruit use cases that are going to be monetizeable very quickly, start developing because of that combination.
Bradley Metrock: [00:42:04] It will be interesting to watch. Ryan, your takeaways from the article?
Ryan MacInnis: [00:42:07] Yeah. As a marketer, Facebook is still the most undervalued platform in terms of engaging with people with the amount of data that they have and the access in which they have to your interests and your social graph. So there is no question that they have all that data. What's most interesting to me is Facebook's push to be more of a platform company. Obviously, we saw recently with the news about organic reach for a lot of publishers going down, a lot of brands, because it's more of a pay to play because the news feed is becoming sacred and they want it for you to really have to kind of work for the effort to get into that sacred space of their users. I think they're understanding that they're a platform, between Instagram, Facebook, WhatsApp, when you think about voice there's a natural synergy there with Messenger and WhatsApp and then obviously voice is going to be a huge part of everything, AR and VR and that's what honestly we've been seeing at Voysis.
Ryan MacInnis: It's just that a lot of these companies understand that it's a lot more about ... you know, we are we're an API based platform, so it's a more of these platform based approaches that can help them engage in all these devices that we're going add in the future or none of these devices that we're going to add in the future depending on how it turns out. I do think that there will be a voice interface within the Facebook platform or the Facebook ecosystem just because it makes a ton of sense for them from a adoption standpoint, from a user experience standpoint. And as you're looking to bring on the next billion people around the world online who are mainly working with audio and visual experiences today, this is the thing that's going to be most complementary to those experiences.
Bradley Metrock: [00:43:44] Very good, I thank both of you. Brian, did you have something to add there at the very end?
Brian Roemmele: [00:43:48] I just got to say Ryan's insights are absolutely brilliant and I fully agree. I mean, the fact that Facebook has such a valuable potential platform play and if one wants to really understand the definitional reasons behind that they are really the 5,000 pound gorilla in the room that people aren't recognizing, and the voice mediation of that is just the beginning. So we'll see how it plays out. Yeah, we are Kool-Aid heavy here. I'm going to bring a lot of Kool-Aid to the Alexa conference. I want everybody to bring their Kool-Aid shirt.
Bradley Metrock: [00:44:30] We'll have to serve Kool-Aid actually at some point during the day, that would actually be pretty hilarious.
Brian Roemmele: [00:44:38] I absolutely, absolutely believe it.
Bradley Metrock: [00:44:41] Gentlemen thank you very much for setting the time aside today for all of your insights and expertise.
Brian Roemmele: [00:44:47] Thank you. It's an honor to be here.
Ryan MacInnis: [00:44:49] Thanks for having me Bradley. I appreciate it.
Bradley Metrock: [00:44:51] Both y’all were great. I thoroughly appreciate it. For Episode 16 of This Week In Voice. Thank you for listening. And until next time.