Earlier this week, 300 broadcasters, technologists and people associated with the automotive industry—fifteen distinct industries in all—sat down in Detroit to talk seriously about radio and the evolution of the connected car, a topic that I find endlessly fascinating.
Cars and radio grew up together. They achieved critical mass with the public at the almost same time about a hundred years ago and since the 1930s, cars were in many ways radios on wheels. The idea of having a car without a radio in the dash was, well, crazy talk.
But in-car technology has moved far, far beyond just being able to tune in your favourite station. And it’s becoming far more complicated that sliding a cassette or a CD into a slot. Depending on whom you ask, cars are on their way to becoming either rolling Internet hotspots or extensions—apps, if you want to get right now to it—of your smartphone.
There were some very smart people at DASH. Here are the top ten things I learned.
Today’s kids will eventually come to radio when they realize that all they’re being bombarded with information from so many other sources. They’ll turn to radio because it’s so easy to use.
1. A Lot of Radio People Still Don’t Get It.
While it’s true that radio is still healthy, profitable and used at least once a week by 90% of the general public, some believe that AM and FM won’t be affected by new IP-based technologies. They had this “what-me-worry?” attitude that I found awfully naïve—disturbingly ignorant, even.
One woman said to me “Today’s kids will eventually come to radio when they realize that all they’re being bombarded with information from so many other sources. They’ll turn to radio because it’s so easy to use.”
When I pointed out that many under 25s have neither any history of listening to radio nor any medium that’s not on-demand and customizable by the end user, she just shrugged. “They’ll find us,” she said with a dismissive sniff.
Another speaker spent half an hour extolling the glories and virtues of OTA (over the air) radio with the idea of proving that are just fine. All this worrying about new technology was just bullshit. “They said radio would be killed by movies, television, cassettes, CDs and satellite radio. Yet we’re still here.”
Yes, we are. But there’s a big difference between those technologies and the super-connected state we find ourselves in today. With more than one billion smartphone users online today—and with another billion predicted to enter the marketplace by 2015—our insistence on instant two-way connectivity is resulting in consumer behaviours we haven’t seen before. And those behaviours are evolving at warp speed.
Two stats jumped out at me. First, 75% of smartphone users connect their devices to their car, even though it can still be a kludgey experience with unsightly cabling, wonky transmitters and Bluetooth connections that can sometimes be frustrating.
Second, 46% of 18-24s would rather do without a car than their mobile phone. What does that tell you about their expectations about being connected? People want on-demand access all the time. Radio somehow needs to sync with these expectations.
I talked to a few other people who led some cheerleading for traditional radio, citing the importance of local information, the bond audiences have with personalities and radio’s longstanding ability of being able to create great content. A panel of local radio personalities talked up the power of radio and the importance and attraction of great content. They made a great case, even if they did come across as slightly defensive–and maybe a wee bit desperate. (Or maybe that was just me.)
Still, I agreed completely with almost everything they said. Radio rules, man. I wouldn’t still be in this business if I didn’t think so.
However, the problem is that almost no one in the industry is thinking about the new devices on which people may (or may not) access OTA radio these days.
Yes, content is king. But it’s not enough to think “build great content and they will come.” Radio also has to understand that audiences have evolved beyond just AM and FM.
We as an industry no longer have the ability to drive listeners to something they don’t like—such as a technology that doesn’t meet their needs. How does the traditional radio industry need to react to audiences that are exercising choices?
And don’t talk to me about OTA radio being ubiquitous and free. Yes, those are advantages, but if another product is priced right, people will buy. Why do you think SiriusXM feels okay about hiking their rates year after year?
Which brings me to…
2. There’s a New Modern Definition of “Radio”
In the past, radio was something that came out of that AM/FM/multiband receiver that sat on a shelf, counter or bedside table. These receivers—one-way communication devices—could also be found embedded in car dashboards or in portable units that could go anywhere.
Not any more. The definition of “radio” now seems to be “something that you touch and audio starts to play.” Instead of just being an AM or FM station, it’s also SiriusXM. A growing number of people consider services like Pandora to be “radio. “ Same with Songza, Spotify, Rdio, Slacker and Deezer are also being called “radio”—except better. No commercials or annoying talk.
When you fire up the display in a connected car, you might not even have a button that says “radio.” Some vehicles have a button that says “audio” which leads to a menu offering FM-AM-HD Radio-SAT-Pandroa-CD-iPod-Aux. Some systems also offer iHeartRadio, Tunein, Stitcher, Spotify and Aha Radio apps among the choices. This is called the “consolidated interface.”
And get this: some vehicles allow drivers to set presets to anything and not just radio stations. Preset one might be your favourite SiriusXM station; preset two might automatically access your wife’s cellphone number; preset three might be a Pandora station.
In other words, traditional radio is now being lumped in with this new concept of radio—a concept that originated not within the industry but from new public perceptions of how audio can be accessed. Hands up all those who saw that coming.
So much for being distinct and unique. Welcome to a world where old-school radio is being increasingly marginalized in the dashboard.
The best thing any radio person can do now—today—is to take a test drive in a car with the latest connective technology. Every GM, PD, announcer and staff member needs to know the capabilities of the new devices on which people may (or may not) be listening to their station. Salespeople should use this as an opportunity to visit all the dealerships on their list. And when everyone understands how they work, come up with questions for your next round of audience research.
Ignore the new devices and you’re doomed. Full stop.
The radio industry also has to get its head out of its ass when it comes to the notion of competition. Yes, we still need to measure radio station vs. radio station. But we also need to start thinking about measuring radio vs.everything.
3. We’re Not Going to See Any Common Standards for Dashboard Interfaces Anytime Soon
If I were in charge, the screen in my dashboard would mirror exactly the display on my iPhone. Why don’t auto manufacturers cut deals with Apple and Google to make iOS and Android the standard operating systems for their infotainment systems? How hard could that be?
Very hard, actually, and for two reasons.
First, carmakers have for the last century competed with each other on points of differentiation. “Buy my brand because it has better features/more features/different features than that brand.”
Manufacturers have seen that their dashboard infotainment offerings now factor greatly into a consumer’s decision on which car to buy. They’re not going to had over control of something as sexy as their infotainment/audiotainment systems to a third party.
The other issue is that there’s no guarantee that the smartphone is going to be the thing that drives these new systems.
There are two approaches to the connected car. One side believes that autos should harness the power and the fast technological iterations of the smartphone industry to drive whatever’s in the dash. Plug in your phone and let it do all the work via its processors and access to apps. This is known as the “tethered modem.”
The other faction thinks that embedded technology is the way to go. By that they mean factory-installed hardware that governs how the car is connected to the outside world. The best example of this is the idea of turning cars into rolling Wi-Fi hotspots with all kinds of telemetric and diagnostic capabilities via satellite, cell towers, roadside beacons or technologies built into the road itself (Think GM’s OnStar on steroids.)
For example, there are several prototypes being tested that communicate with intersections. The car senses surrounding traffic conditions and if it’s safe to do so, makes sure you hit nothing but green lights. No wonder the people behind this technology believe the current love affair between smartphones and cars will be transitory.
Both approaches have their advantages and disadvantages (that’s a whole ‘nother article) but the bottom line is that we’re going to see a long battle for the hearts and minds of drivers when it comes to interfacing with their new car’s technological capabilities. We as drivers may be forced to pick a side when it comes to our next new car. Unless, of course, we end up with a hybrid system—which is a very real possibility. (Again, that’s a completely different discussion.)
4. Safety Is a Major Concern
One of the knocks against the connected car—a justifiable one, I might add—is how the new dashboard doo-dads are going to contribute to distracted driving. The industry is most aware of this, knowing that if they don’t think this through carefully they’re potentially opening themselves up to billions of dollars in wrongful death and personal industry lawsuits.
Governments—especially the über-powerful National Transportation Safety Board in the US—are on the case, too. There are already rules in place regarding things like displaying text and album artwork—and there’s more coming.
5. It’s Gotta Be Simple, Stupid
Whatever we end up with in our dashboards has to be as easy to use as an old-school radio. Younger generations will have no trouble adapting, but what about people like my parents? After decades with a VCR, they still couldn’t program it right; today the features of their PVR scare them. How’s Dad gonna react to a touchscreen in his next car? Answer: not very well.
We’ve seen this before. Satellite radio didn’t really catch on until the receivers were easy to use thanks to big, bright screens with intuitive controls. Ask my technophobic neo-Amish wife. She didn’t understand the appeal for satellite radio until she got it with her new Honda CR-V on one of those initial three-month trial subscriptions. Without any prodding on my part, she discovered it, learned to use it and now won’t be without it.
Studies have shown that the bigger the screen, the more likely people are to use it. Bigger screens usually mean interfaces that are more clear and easy to use. Other manufacturers are eyeing the 17-inch screen in the Tesla S very carefully. Remember what I said earlier about points of differentiation?
But even an infotainment system isn’t as intuitive as it should be, many consumers are forging ahead, anyway. They think “Geez, I paid for all this cool technology so I’d better learn how to use it.” Then there are drivers with kids. They’ll teach mom and dad how to best use the in-car technology whether mom and dad like it or not.
Meanwhile, dealers are spending more time educating their new customers on what their infotainment systems can do. When my wife picked up her CR-V, fifteen minutes was spent on the various features of the vehicle and another forty-five was devoted just to the infotainment/nav system.
(Hint: If you’re a car dealer, pair up a customer’s cell phone via Bluetooth when they go out for a test drive. About halfway through the drive, have someone call the customer in the car. Those who have never used this integrated hands-free technology will be sold immediately.)
6. Advertising is Going to Change Drastically
The possibilities for targeted advertising via your connected car are staggering. Imagine that you’ve set up your car’s location awareness in such a way that it will receive messages from advertisers as you drive (This assumes that you have control over privacy settings, of course.)
I’ll give you an example. Your car senses that it’s time for an oil change. It looks out into the world and notices that the Jiffy Lube two kilometres up the road is offers a package that fits the warranty needs of your car. It then communicates with that Jiffy Lube which responds with a customized electronic coupon offering you a discount if you drop in right now. Think about how something like that might impact traditional audio advertising.
One dealer group offered up a disturbing story. He bailed entirely on radio advertising because (a) he wasn’t getting the personalized service he wanted from his station rep; and (b) he found digital advertising investments were bringing more people into the showroom. Given that the automotive sector is a giant category for radio advertising on both sides of the border (it’s #2 in the US), that’s scary.
7. The Three Levels of Connectivity
A connected car will fall into one of these broad categories
Basic: Good audio from OTA radio, CD, Bluetooth pairing, iPod connection, optional satellite radio and navigation, probably aux-in.
Midrange: Better audio with touch screen. Offers additional media connections, voice commands plus all the features of a basic system. Might also include some hard-wired features (e.g. GM’s OnStar).
High-End: All midrange functionality plus a wide range of apps including Internet radio; hands-free text messaging/email (text-to-speech and speech-to-text). Some systems are open to external software developers.
Which one would you want? And notice that the greater the number of the features, the greater the chances of the driver opting for something other than OTA radio.
8. Get Used to Talking to Your Car
Voice commands kinda suck right at the moment, but Apple has a big push with a number of manufacturers for adapting Siri for the car. Others are constantly working to improve voice recognition and AI interfaces.
Heads-up displays (HUDs) are making a comeback. It also won’t be long before your car responds to gestures. And we were told that biometric monitoring is coming. Could your car sense when you’re about to fall asleep? If you’ve had to much to drink? If you’re having a heart attack? Don’t rule it out.
9. Change Is Coming FAST
The average age of a car on the road in the US is eleven years. As the economy begins to pick up, more and more people will be looking to buy new. In the coming year, 16 million cars will be sold in the US and almost all of them will fall into the “connected” category.
And because more and more people are asking “What’s in the dash?” instead of “What’s under the hood,” there’s a big push to improve infotainment offerings. If you bought a car last week, its dashboard system will probably be the equivalent of an under-dash 8-track in a couple of years.
But aren’t these systems expensive? At the moment, yes, but manufacturers and dealers are doing studies into price sensitivities. If bringing down the price on some of these electronic gewgaws means moving more metal off the lot, they’ll do it.
And if you need another stat, it’s estimated that the worldwide market for automotive entertainment systems will be worth over $42 billion by 2016.
10. The Radio Industry Needs to Get Together On All This
One suggestion was that a working group of broadcasting needs to be formed so that the OTA radio industry can come up with coordinated strategies and get together with auto manufacturers on how best to proceed with connected car technologies.
Radio also needs to (a) partner with local dealerships; (b) stop avoiding an investment in mobile strategies; and (c) make sure the streaming experience of all OTA stations is competitive with online offerings.
Absolutely. Count me in. As a guy who has devoted more than half his life to radio, I want this industry to continue to thrive.
No one is saying that we need to abandon AM and FM. That’s stupid. But what we need to get our heads around is that we’re moving in a direction that takes us beyond the old delivery systems.
And we can adapt, right? Right?