If you missed the 2012 Future of Radio Conference, you missed one of the most comprehensive looks at how the Connected Car (and after-market enhancements) will affect terrestrial Radio in coming years. And you missed one of the real substantive, interactive conversations in which a station owner can participate. It’ll scare you. It’ll inspire you. It’ll get you excited to re-invent your business in creative new ways.
We had the chance to play with several of the latest automotive innovations, including the 2013 BMW 5 Series and the top-of-the-line Ford Escape with the full-blown Microsoft Sync system. We also took a look at two different after-market products. The Livio Radio device makes ANY car with a cigarette lighter a “connected car” that uses a mobile device with an Internet connection to deliver streaming and other content into the FM Radio in the car.
The term “Connected Car” is one of those buzz terms starting to get thrown around a lot. In short, it’s just about every vehicle these days. But that’s an over-simplification. Any car can be “connected.” But the term “Connected Car” mostly refers to the new generation of vehicles that have software-driven dashboard and entertainment systems, and which are ready to bring the world of web-based entertainment (streaming media, navigation and information data feeds, and a host of other new content) to drivers and passengers.
There is a distinct lack of quality research data sets to provide a good view of the impact Connected Cars are having on media consumption. This is mostly because everyone with a dog in the hunt (including the Radio industry) has its own data to tell its own story — good or bad. And none of them are trustworthy from the standpoint of methodology and scientific value. Some are flat-out misleading (on purpose).
And even if you can find it, the only good data offers a ”rear view mirror” look at what’s already happened. The pace of change here is so fast that it’s probably most useful to look at the potential future impacts and prepare strategically for those, rather than chase your tail trying to see what’s happening — by the time you see what you want to see, it’s too late.
Automakers are not helpful sources of good information, either. They all sense such a massive marketing edge in having the most “Connected” features that they’re all furiously developing things with Silicone Valley partners like Microsoft, Google, and others that everyone is running silent for fear of losing any technological edge or spilling the beans about something that could outsell the competition for even a short time. The most important thing you should probably know about Connected Cars is that they’re all software now — the hardware can take all the firmware upgrades it needs in the future to keep pace with whatever the “next big thing” may be…
Vehicles are now viewed by automakers as entertainment and technology platforms; not transportation. The transportation part is now a given; THAT you get there is far less important than HOW you get there… Think of web-enabled vehicles with their own apps, much like your smartphone. Think docking station for your smartphone, tablet, or laptop. And know that they envision completely separate strategies for driver and passenger (safety in the front, movie theatre in the back).
Connected Cars can now be smarter safety devices that pro-actively warn you via head’s-up displays. They are self-maintaining, and tell you what they need and when. They are smart appliances that can, theoretically, make your life simpler.
And before you start thinking it’ll take decades for this “connectedness” to proliferate throughout the install base of vehicles on the road, think again. Any car can be connected:
|Generation||Level of Connectivity||Barrier to “Complete Connectedness”|
|2013 Onward||First Generation that is “Fully Connected”||None|
|2010 – 2012||Slave Connectivity via USB, Phono, or Bluetooth Interface||Cable
|Pre-2010||No Digital Connection||After-Market Device
New vehicles rolling off the assembly line have NO barriers to connectedness. And those built within the last 3-4 years generally can be quite connected via USB, phono, or bluetooth connections with a smartphone or other mobile device with its own Internet connection. The dashboard in this instance is just sort of a speaker system and the smartphone does all the work.
But any vehicle older than that, without an auxiliary connection, at first glance might seem “unconnectible.” That is a serious miscalculation. Because just like in the old days when after-market manufacturers figured out how to retro-fit for cassette decks and CD players, they’ve already figured out how to — for less than $100 — make any car with an FM Radio a connected car. In fact, Livio Radio – the device we demonstrated at Future of Radio Conference — uses our very own FM frequencies and the car stereo to bypass terrestrial FM programming in place of whatever you’ve got on your mobile device.
Automakers now view vehicles as mobile entertainment platforms that create residual revenue streams. It started with On Star and satellite radio, and now it is extending into navigational data, Internet access, and a host of streaming media options. Microsoft, Google, Intel, and Cisco are all forging relationships with automakers because vehicles are seen as the next big technology boom. AM/FM Radio is now a software function that no longer commands its own real estate on the dashboard. And it has been lumped together with a host of other options in one consolidated device that interacts via a screen interface — no tuner and volume knobs anymore. The CD player will disappear from all 2013 models, and Terrestrial Radio is NOWHERE on the R&D priority list for automakers.
Consumers have stuck with Radio so far. And don’t seem excited about ANOTHER bill for Internet in the car. But supply-siders are taking a “build it and they will come” approach (much like they did with satellite radio). Consumers HAVE shown quite a bit of excitement about replacing in-car CD listening with streaming media from a smartphone — and that is primarily where in-car media consumption has changed so far. Consumers have also reported finding most of the new dashboard systems confusing; common sense, but a short-term issue.
In the Future of Radio presentation we attempted to provide an overview of HELPING and HINDERING forces. We defined Helping Forces as bad for Radio (because they can speed up the evolution), and Hindering Forces as good for Radio (because they will slow down this evolution).
Helping Forces: Automakers see ”connectedness” as a competitive advantage to exploit. This will cause them to deploy these technologies faster and faster, and advance them until consumers see them as commodity. Pandora is pouring millions into co-op ad campaigns and essentially buying its way into dashboards, paying automakers to include Pandora-readiness into the software systems of the vehicle. Imagine if Radio had done this with HD… Radio’s loss of dashboard real estate is another negative. Dedicated volume and tuning knobs and AM/FM displays are gone; never to return.
Hindering Forces: A few factors are working in Radio’s favor. Consumers still like Radio’s curation of content. Most early adopters of Connected Car technology were never heavy Radio listeners to begin with; opting to curate their own music content with CDs or iPod. Government regulation is also going to be a hot spot that could slow the advance of these technologies. Safety is a huge concern; the more a driver is distracted by these technologies, the more likely accidents become. Lobbying is already heavy, and politicians will sense blood in the water and an easy target with populist support. Consumers are also resisting another Internet invoice every month; most have 2+ already, and the idea of another is hard to stomach. But watch for bundling of Internet connections (home, car, mobile devices (smartphone, tablet, etc.)… Another potential hindering force is mobile bandwidth. While the technologies APPEAR to be there to solve this issue, the question remains who will deploy these technologies, how fast. And, again, there are conflicting data sets that make it hard to peg.
Regarding the issue of mobile data capacity, consider that the number of tablet users DOUBLED on Christmas Day, and it is projected that more tablets will be in use by 2016 than PCs and laptops. Mobile network demand is growing exponentially. Yesterday you were one (1) mobile connection — your phone. Today, you are 3-4 mobile connections (smartphone is two connections by itself, plus mobile broadband, your tablet, etc.). Demand is growing like crazy, but supply is NOT. 4G roll-outs have been slow at best, and only recently has a standard seemed apparent. Why else would AT&T be throttling if they didn’t have to consider ways to slow demand growth?
Short-run solutions like putting FM chips in smartphones could be very good for Radio.
So what are the best strategic reactions for Radio?
Dashboard real estate is gone and never coming back. So the content must be worth finding.
Heavy streamers also tend to be heavy Radio listeners. And Radio’s strength with heavy streamers is its non-music content. They cherry-pick morning shows and other personality-driven content as well as information content like weather, news, and sports.
You might ask, “What is the Radio industry doing about all of this?” My answer would be an overwhelming, “Not NEARLY enough!” However, to be fair, NAB Labs is engaged in a development project with Emmis Interactive, iBiquity, Intel, and BIA/Kelsey that integrates HD technology into smartphones, and uses the encoded HD signal to display enhanced, user-friendly information like artist/title and album art AND create an interaction environment that includes social media and other Web 2.0 features. It remains to be seen whether it can gain any traction, and NAB doesn’t appear to see it as mission-critical. In fact, NAB appears to be working hard to protect status-quo — all at a time when status-quo is about as bad a strategy as could possibly be imagined.
How do we take the facts (even the bad ones), and mold a strategy that makes sense for the future? How do we adapt? How do we stay relevant and use these circumstances to our benefit?
First of all, Connected Car technology has the ability to make our Radio Stations MUCH more interactive. Mobile apps and mobile web can allow listeners to interact more from the car — vote, comment, call, LIKE, FOLLOW, and generally participate in everything from contests to discussion. And knowing more about where listeners are puts you into the SoLoMo game.
Connected Car technology allows you to integrate multi-media delivered via the mobile device with what’s happening on the air. For example, spots can have synced digital components with bounce-backs or BUY NOW functionality. Weather, traffic, news, and promotions can all have multi-media components. See the traffic map, check the RADAR, see photos and video that take you deeper into news stories, sign up to play contests…
Most listeners still like Radio’s curation of music content. But for those listeners that want to curate the music more on their own, you can stream a branded version of a Pandora-like environment that gives the listener total control of the music content, but retains your brand and advertising. You can even allow the listener to decide on the frequency of content like weather, news, traffic, and other elements.
It may sound crazy but you should probably consider offering tech support to help listeners find you in their new-fangled dashboard entertainment systems. The demonstration we showed at Future of Radio Conference demonstrated just how complicated it can be to find Radio in the dashboard, select a Radio Station, and especially remember it for next time. Believe it or not, tech support may be in our futures! And for certain we can envision step-by-step on-line instructions for how to tune the Radio Station in various system types (Ford Sync, Toyota Entune, etc.)…
Recognize that in 2-3 years it may actually be EASIER for a listener to stream your Station than tune the terrestrial signal in the car. As the quality of receivers continues to degrade and the maze of menus complicates what used to be a push-button on the dash, this idea isn’t too far-fetched. And if you have listeners over 40, EXPECT this to be a problem VERY SOON.
Because of safety concerns, be looking for ways listeners can interact with the Station in a hands-free way. For example, CTunes Network, which we demonstrated at Future of Radio Conference, and which many of our Radio owners loved.
Lastly, if you missed the Future of Radio Conference and our demonstration of the latest dashboard technology from BMW and Ford, do yourself a huge favor and go on an expedition to several different auto showrooms to try these things out. You’ll be astonished at what the systems are capable of doing, and it’ll fill your mind with possibilities.
The Connected Car CAN work to your advantage. It is, one the one hand, a very bad omen for those who plan to keep doing the same things over and over again and expect a similar result. But it is a path from terrestrial to digital delivery if you choose to make it that, and if you invest in ways to leverage the evolution of the automobile into better results for your advertisers and a more friendly environment for your listeners.