We just returned from the NAB last week and while there we attended the NAB’s day long session, Digital Strategies for Broadcasters. The panels were well prepared but sadly there were only 60 people in the room (92,414 attendees at NAB). One of the better panels covered the connected car. Panelists were from the Consumer Electronics Association, Connected Vehicle Trade Association and a consultant formerly with Lexus/Toyota/Scion. One slide I wanted to highlight came from Michael Bergman from CEA. This slide illustrates what is projected to occur through 2016 in the car. Note Internet radio growth with over 80% in-car penetration by 2016. Penetration is more than twice that of HD Radio. As I have posted previously HD radio lacks full two-way interactivity, a few extra channels with no compelling advantage in content and/or audio quality cannot compete with Internet radio. The Digital Strategies session opened with a chart showing current internet listening vs. terrestrial radio. Obviously an emphasis on today rather than the future…
As discussed in my prior post the technical side of car integration for Internet radio is difficult due to the many car companies, their suppliers and in dash systems. Pandora, Tunein, NPR and iHeart radio have an amazing lead on the terrestrial radio industry for real estate on the car entertainment systems. Pandora was integrated with every car company we visited at CES and claims to be integrated with 1,000 different devices. These integrated applications appear prominently as listening options. The rest of terrestrial radio streaming is for the most part not represented except as embedded in Tunein, Aha or iHeart. This is a major factor as to why many other radio stations have agreed to be included in the Tunein and iHeart platforms as it give them access to these distribution systems which also have in car access. However, in a point I made in an earlier post they are lost in a multitude of options.
Yes there is still a radio button in the car and this will not disappear any time soon. However, it is now just one of a multitude of choices. As we know people typically have about 6 presets (their favorites) and scroll among them. How will terrestrial radio compete in a fragmented dashboard. In my view it will not be based on music but other unique and local content. Unfortunately radio has reduced its investment over the last several years in its product. Very little programming is local and unique. Competition for other information such as news and weather is readily available from other sources. Those that do invest and have a multi-pronged distribution approach will be the winners.
We just returned from the Consumer Electronics Show in Las Vegas. The primary theme was Internet radio in the car. One of our portfolio companies, Livio Radio, announced FMConnect which allows terrestrial radio stations the ability to now take advantage of two-way communication (read; digital) utilizing the cell phone connected to your car’s entertainment system. Also Kudos to Fred and Paul Jacobs for inking a deal with Ford for their Ford Sync product. Unfortunately the car ecosystem is fragmented and confusing to a degree that is frightening. While developing an app for Ford is an attractive idea, keep in mind that this app will not work with all the other car companies’ entertainment systems. As currently stands a station would have to develop a different app for each car platform which is what Livio Connect is trying to eliminate. Livio is integrating with all car companies and their suppliers. Internet radio in the car can be achieved by many means as follows:
1) physical cable
2) Blue tooth
Some systems just mirror the phone with navigation still done on the phone. Others such as provided by Livio Connect allow listeners to control access to streams from the cars control. This makes controlling audio options much safer. This is also true of Ford Sync’s product but it of course is one of many in the car ecosystem and I don’t think that Chrysler is going to allow the Ford platform into their cars. Thus the need for a company like Livio which can work with all car companies because it has integrated into the chipsets of major suppliers of the in-car entertainment systems. Radio companies should leave getting connected in the car to auto industry experts given the vast, confusing world it represents and should partner with a company like Livio to deal with integration.