I went to the DASH conference in Detroit last November because I wanted to listen and speak to the automotive experts and hear their views of where the automotive industry is heading and how radio fits into the strategy. As previously reported, there was some good news for radio, as well as some worrying trends.
I heard lots about the connected car at that conference. Most vehicle manufactures feel that radio will exist in the dashboard for many years to come in one form or another because consumers expect it and demand it. One industry expert cautioned that we need to keep things simple in the car dashboard and make the user experience rich but as simple as possible. He warned that the more bells and whistles that are crammed onto the car entertainment system and/or dashboard, the more confusing and distracting it may be for the average consumer.
That comment was also echoed at the recent CES, or the Consumer Electronic Show, in Las Vegas. A GM executive said, “The more features you put into the vehicle dashboard the more you potentially fragment. We know there is a lot of power in having a simple button in the car to select an experience.”
The average car today has the computing power of 20 personal computers, features about 100 million lines of programming code, and processes up to 25 gigabytes of data an hour. Yet while automotive digital technology has traditionally focused on optimizing the vehicle’s internal functions, attention is now turning to developing the car’s ability to connect with the outside world and enhance the in-car experience. According to McKinsey which studies automotive trends, 13% of new vehicle buyers are no longer prepared to even consider a new vehicle without Internet access and 25% already prioritize connectivity over features such as engine power and fuel efficiency. Other interesting findings from this study of almost 2,000 new-car buyers from Brazil, China, Germany, and the United States indicates that as many as 37% of new-car buyers said they would switch to another manufacturer if it was the only one offering a vehicle with full access to apps, data and media. 32% said they would be willing to pay for connected services in their car in a subscription based model. The automotive industry is investing heavily in this area because they see huge revenue potential.
So as expected, the connected car was highly visible at CES. And while many of the product announcements centered around using mobile devices to sync streamed audio more seamlessly into the dashboard, good old radio featured at the heart of a surprising number of announcements. All up, there were 115 automotive tech companies and 9 car companies showing products at CES, and almost all of them included radio in one form or another.
Radio has been in the automobile since 1930 when the Galvin brothers offered a $120 unit which was called a Motorola. It was not until 1952 that the first FM radios were offered in vehicles via Blaupunkt. This means the AM radio has been around for 84 years and the FM for 64 years. By the way, HD radio has been offered in vehicles since 2004.
Radio remains the dominant media consumed in the car in 2016 for 4 simple reasons:
1. Radio has always been there, at least for anyone under the age of 86
2. Radio is easy to consume
3. Radio is free
4. Radio makes a real connection with the vehicle occupants by informing and entertaining.
With longer commutes and more time spent in the car, radio listening is at an all time high in North America. The average person listens to the radio 5 or more different times across the day according to PPM data and 93% of North American’s consume radio in any given week.
A number of the announcements at CES were around the ability to use your mobile device and sync it to the car’s entertainment system in a seamless fashion. This could, for example, mean if you are listening to your favourite radio station at the breakfast table you could carry on listening to that via an app on your smart phone while you brushed your teeth and then walked out to the car. On entering the vehicle in many cases this new smart technology will seamlessly play that content through the car’s entertainment system. If this all works as smoothly as promised, the amount of radio consumption may actually increase in the future as listeners carry their favourite radio station from their beside radio to the end of their commute and beyond.
GM is looking to have 12 million connected vehicles on the road by the end of 2016, because according to Mary Bara, the CEO of GM, consumers are demanding better connectivity. Apple and Google want to be part of this and are looking to get their operating systems to integrate or at least mirror onto the vehicle entertainment system, and we are already seeing this in some models form Honda and GM. At CES, Apple touted that every major auto manufacturer either currently supports or plans to support Apple CarPlay in the near future. Not to be left out, Google announced deals with Ford & BMW and others. “The car is becoming part of the digital lifestyle,” said BMW’s Tom Brenner. “As cars become connected we need to think through how we add our devices to make it seamless with the consumers’ needs.”
But if you are not driving the latest model with all the latest connectivity, don’t worry, there were lots of companies at CES who were offering aftermarket technology that can be fitted to your sweet ride that will allow you to use all this new technology. Three companies leading the way in this regard are Alpine, Kenwood and Pioneer. Alpine announced at CES they have signed a deal with Apple CarPlay and their iLX-007 digital media receiver is on sale in the US for about $800 and should be in a Best Buy near you before the end of 2016. Alpine also has a range of after market products designed to improve the audio experience for particular vehicles. For US$3,500 you can upgrade any 2014 F150 truck audio system to a X009-FD2 which adds enhancements like navigation, customizable short-cuts, Bluetooth wireless technology and sound settings optimized for your truck – all controllable through a 9-inch touch-screen. They offer similar kits for other makes and models. For example, if you have a 2012 or newer Toyota Camry you can get HD Radio, navigation and all the CarPlay features for US$250 plus installation. Pioneer and Kenwood are already offering devices for both IOS and Google. Check out the Kenwood DNX893S or Appradio 4 SPH-DA120 from Pioneer which costs about US$600.
Volvo and Ericson announced at CES that they are working on developing higher bandwidth capabilities for vehicles that could bring better audio and video options to the driverless vehicles of the future. They also mentioned they are looking at supplying pre-curated content that could be tailored for the exact duration of the commute.
By the way, Ford believes that less and less people will actually own a car in the years to come and will rely on ride sharing services such as Lyft and others such as Uber. Lyft is in over 80 US cities today and hopes to expand to the north at some point soon. They have an app that matches you with local drivers at the tap of a button.
So what is next for the connected car? According to Connect Car which is a website dedicated to following these trends, the next phase of connected cars will be more connected to services and information outside of the car such as:
Perhaps the big question at the back of many broadcasters’ minds is will radio still be popular in the driverless car if and when that becomes a reality. Many believe that the totally autonomous driverless car is still at least 15 to 20 years away because it requires all vehicles on the road to have technology that can communicate and work safety together. However, if and when a driver can sit in a vehicle pod and work on their computer, talk on their phone or watch a movie while they are going from point A to point B, will that impact time spent listening to radio within that vehicle? I believe the answer is that it will depend on how relevant and compelling the content the radio station is offering. Also, one of the benefits is that in the driverless vehicle the consumer will be able to multi task just as they do at home when sitting on the couch. They can check emails, surf the web and even work on documents all while listening to the radio. So radio consumption may not be impacted.
Provided that radio can continue to make that connection with listeners either in the vehicle, at work or at home, radio will survive and thrive for many years to come. If you believe Ray Kurzweil who is considered to be one of the world’s leading inventors, thinkers, and futurists, with a 30-year track record of accurate predictions, he believes the internet will grow more in the next five years than it has in the last 25 years combined.” By the way, his book, called “BOLD”, is well worth reading.
The connected car is already a reality today in one form or another and there are vehicles in showrooms near you that have various forms of connectivity right now. You may have also seen ads from Ford, Honda and Chevrolet selling the benefits of the connected car.
If Ray Kurzweil is correct there will be technologies competing for ears, eyes and minds that have not yet been invented, and the time to market is becoming quicker with each passing year. My belief is that many of these advancements will create some amazing opportunities for radio, and as an industry we need to ensure we have a presence on all the platforms where listeners expect to find us.