Centrica’s Hive Tries Subscriptions to Boost Smart Home Service

Centrica’s Hive Tries Subscriptions to Boost Smart Home Service

This article was originally published on the Bloomberg Terminal, September 14, 2018. The Zuora press release about Hive’s use of the platform can be read here.

Hive, the smart home division of U.K. energy firm Centrica Plc, is turning to new subscription models to try to boost adoption of its service.

Jo Cox, commercial director of Centrica’s Connected Home division, said the new subscription plans should allow Hive to reach 1 million customers by the end of the year. Currently some 700,000 people have the service, which allows them to control heating and lighting remotely through a mobile app.

Centrica has built its Hive product through a series of acquisitions, including spending 44 million pounds ($58 million) to buy connected home startup AlertMe in 2015 and 13 million pounds to buy FlowGem, whose technology helps detect water leaks, in 2016. The utility company has been counting on smart home products to help it attract customers, especially younger people, at a time when many are abandoning traditional energy providers such as British Gas in the face of higher prices and concerns about service quality.

Hive introduced a 5.99 pounds-per-month subscription plan in May for a basic package that included the Hive home hub, which coordinates all the connected devices, and two smart bulbs, a motion sensor and one smart plug. Now it’s rolling out a wider variety of payment plans that will allow customers to purchase equipment, such as smart thermostats and light bulbs, and pay for them in installments, while also breaking out equipment and service costs separately on customer bills.

“We wanted to move more to the telco model,” Cox, who worked in the telecom industry before joining Hive, said in an interview. She said a subscription plan that amortizes the cost of the equipment over the lifetime of the contract was needed because many consumers hesitated to spend 300 to 400 pounds in a single upfront payment.

In addition to new payment models, Cox said that Hive would introduce a host of new features designed to make the Hive app more useful, like having lighting mimic the normal pattern of when someone is home, thereby potentially deterring burglars. Another feature will allow users to set their heat and lighting to turn on automatically when they are a certain distance from home.

Hive has chosen Zuora Inc., a San Mateo, California-based firm that specializes in managing subscription payments, to oversee its new billing options, the two companies said.

To contact the reporter on this story: Jeremy Kahn in London at jkahn21@bloomberg.net
To contact the editor responsible for this story: Giles Turner at gturner35@bloomberg.net

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