At the NAB/RAB Radio Show in Orlando sponsored by Arbitron and Radionomy, Roger Lanctot, associate director, Global Automotive Practice, Strategy Analytics and Fred Jacobs, President/Jacobs Media, presented facts, figures, forecasts and strategies that broadcasters can use to protect radio’s position as the king of the dash.
As many of us know, the connected car is at the intersection of radio and ad spend. The car radio is no longer alone in the dash, but a part of an overall information and entertainment platform. According to Strategy Analytics, the connected car industry is growing. They project that by 2017 there will be 140 million connected cars on the road globally. While radio remains a strong connected car component, the industry must adapt its strategy now to maintain that relevance.
While 84% of in-car listening is still done via AM and FM, it is becoming increasingly harder to even find the “radio” in a connected dash. A study was presented that showed potential car purchasers in dealerships trying to complete a mission—just find an AM or FM radio station. It was hilarious, but many of them had no clue.
With OEMs and tier 1 manufacturers like Pioneer and Kenwood turning the dash into a touchscreen and/or voice command experience, radio now shares turf with satellite radio, USB devices, Bluetooth commands, the phone, apps, radio apps including Pandora, Stitcher, Tune In, social media, parking information, web browsers and more. Unfortunately, the radio option doesn’t stand out any more than any other option and indeed, is increasingly harder to find.
“Currently, the link to customers’ phones remains incomplete,” noted Lancto. “Automakers are working to fix that. Today, most connected cars use smartphones—the ‘tethered model.’ Cars are becoming smartphones on wheels. What they ultimately want is a direct cellular connection without needing the phone component.”
Digital dashboards are now attracting people into the dealer showrooms. It is so complicated that the salespeople need to be trained to teach the customers how to use these systems and the customers are offered free training themselves—sometimes up to three and four appointments are necessary after the purchase.
As one GM dealer noted in a video, while the car buyer can’t come in every six months and change out the color of the car’s sheet metal, they can come in for new app updates for the dash.
The bottom line is in four years, there will be no cars with traditional knobs on the dash. Most will be touchscreen or voice command. Ford’s Sync and My Ford Touch have been leading the way in that arena. However, nothing will replace local content—people want radio, whether it is over the air or streamed. The question is what chips to broadcasters have to lay down for the future in terms of connectivity? Hybrid Radio may be a part of the future, where when you listen to a station over your car radio, the signal fades as you drive out of the market and automatically the internet stream of that station takes over.
In the wake of all these changes, Jacobs had a few suggestions for broadcasters to follow:
- Drive a connected car—educate yourself.
- Partner with local car dealerships. Find out their needs. They are the bridge between OEMs and consumers.
- Attend a connected car conference and speak to auto dealers.
- Re-think HD Radio. Most OEMS think it’s the digital experience/data pipe that’s key to the future of radio.
- Form a radio in-car industry consortium
- Develop your mobile strategy with the in-car experience in mind. Think beyond your market coverage areas.
- Align your station’s streaming experience to be on equal footing with the competition.
- Engage with the connected car technology.
Don’t forget, for more insights on the connected car:
The DASH Conference
Information and to register: www.dashconference.com.
RBR-TVBR observation: As Ray Chu, GE Capital’s Managing Director/Media Team Leader for Telecom, Media and Technology told RBR-TVBR after the session, one has to wonder how much more the consumer will be willing to spend when the car is completely connected, without the need for a smartphone. How much more will your cellular provider charge you to have that IP address for the car? How much with other services that may offer IP in the car charge? With all of the technology we’re currently paying monthly for, will the fees for the connected car limit its full adoption in the marketplace?