Streaming radio in cars is no longer something to look at as a future phenomenon. That, according to a study which interviewed 18-44-year-olds which found roughly two-thirds reported some level of streaming radio usage in their cars–primarily through the use of smartphones, which they often plugged into their vehicles’ audio jack. This level is achieved even before streaming services as Pandora and iHeartRadio (already found in as Toyota’s Entune system or Ford’s Sync) are ubiquitous in the dash. Some consumers reported listening by simply using their smartphones’ external speaker.
The good news is most users of in-car streaming radio continue to use over-the-air radio extensively. In fact, this is the audio source in-car audio streamers use first when entering their vehicles, often citing the information elements and personality-driven morning shows that they view as unique to over-the-air radio as their reason for doing so, said the knowDigital report, “Challenges and Opportunities for In-Car Streaming Radio.”
The majority of streaming radio users express strong interest in better technical solutions for listening in their cars, including after-market devices and factory-installed in-dashboard systems.
While consumers are enthusiastic about the exponential increase in listening options in-car streaming radio provides, most anticipate limiting their usage to roughly five options when in-dash systems become more widely available. The typical consumer knowDigital interviewed described programming a button for their phone, one or two for over-the-air radio stations, one for their personal music library and one for Pandora. Thus, many over-the-air radio stations and audio streaming services could be “crowded out” by the arrival of in-dash systems.
About 22% of Americans are currently listening to some streaming radio, according to Arbitron & Edison Research’s “Infinite Dial 2011: Navigating Digital Platforms.” It is thought that most of that listening still occurs at home or at work on computers connected to the internet because of the perceived difficulties related to connecting to the internet in the car.
So to address this, the study addressed a number of industry perceptions—or misperceptions—about in-car streaming. Here are more details, which the report gleaned its findings from:
PERCEPTION #1: Streaming is not yet happening in the car
Most commentators believe that consumers are not listening to streaming radio in the car as yet, at least not in any significant fashion. When we interviewed these streaming consumers, however, we were struck by how many of them had already found a way to stream in the car. The majority explained they are streaming through wired connections to a factory-installed USB port or other dashboard plug, or through an after-market accessory connected to their FM
radio, cassette deck or CD player.
However, many cited technical hurdles. Others suggested they consider streaming too much of a hassle for short trips. A few consumers pointed out safety concerns associated with adjusting the channel or skipping songs via a smartphone loosely housed in their cupholders. Other streamers expressed concern about running down the battery on their smartphone, and avoided or curtailed streaming in the car for that reason. Still others expressed concern over
data usage cost and limitations of their data plan.
PERCEPTION #2: Once streaming becomes widely available in car, terrestrial radio will be dead.
We have heard other critics suggest that once in-car streaming radio is embraced by the mainstream, over-the-air or terrestrial radio will be severely threatened; that in-car streaming will sound the death-knell for terrestrial radio. Looking back at our September 2010 national study, we are reminded that about 90% of all streamers still use terrestrial radio on a daily basis. It also should be emphasized that the streamers we interviewed in this study generally turn on AM/FM radio first when they get in their cars.
PERCEPTION #3: People won’t pay for an in-dash solution
Another common perception we read is that consumers will not pay for a better in-dash solution. We found that was not the case with these early streaming radio adopters. Indeed, 95% of the consumers we spoke to said they are very likely to buy a new solution that makes in-car streaming easier, either an after-market device or a factory-installed option priced around $400.
A good number of these streamers are already aware of one factory-installed option, the Ford SYNC. About 40% of them are familiar with this brand whereas no other auto manufacturer brands have any awareness at all.
PERCEPTION #4: Consumers will want more pre-sets with in-dash systems
We addressed the common perception that consumers will want to program many more channels on their dashboard as more and more choices are made available there. To test this proposition, we presented streamers with a mock dashboard that might appear on a new factory-installed system. It provided ten “slots” to be programmed. We asked them to select the ten inputs they would program if they had this system installed in their car.
The choices presented included a phone input, a dozen or so local radio stations, a continuous traffic channel, a continuous weather channel, input for your iPod or digital music library, Pandora, iHeart radio and a Facebook feed.
Interestingly, most selected only about five options. That is, when presented with ten positions to program, most only cared about enough sources to fill five of those positions. When we aggregate the selections of today’s streaming radio users, we see that the most common choice is the phone and one FM radio station. That’s followed by an input for the consumer’s digital music library, a second FM station and Pandora.
The picture that emerges is that consumers are only likely to program five positions on a new in-dash system, despite the availability of many more choices and programmable positions. Furthermore, there only appears to be interest in one or two FM radio stations. Terrestrial broadcasters who do not want to be crowded out of the new connected dashboard should work extra hard at building their brands now and fight for position.
RBR-TVBR observation: The 18-44 demo skews young, and we note that AM stations were not even mentioned in the preset selections. Regardless of the age, most people only listen to one or two stations on a regular basis, so that should not be a big surprise. However, the panel’s choice of FM station and phone input as the first two choices is encouraging. The fact that a Facebook feed was not in the top five is surprising, but encouraging for all radio—internet or not.