The Connected Car

December 7, 2012
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Thanks to Arbitron, I was honored to do a joint presentation at their Client Conference yesterday devoted to “the digital dash.”  Valerie Shuman was a “great get” for this session (credit due to Dr. Ed Cohen who envisioned this session).  She’s the VP of Industry Programs for the Connected Vehicle Trade Association and had some great insights about this rapidly growing and changing space.

Why was this even a topic?

As Valerie pointed out, the average age of a car in the U.S. is now 11 years old – and that means that in the next year or so, many Americans will be in the market for a new vehicle.  And many of these consumers will purchase one that is equipped with a system like Ford’s SYNC and Toyota’s Entune.

This is significant because as we learned in Techsurvey8, a majority of our 57,300 respondents say the lion’s share of the broadcast radio listening takes place behind the wheel.  We also learned that half our sample is already able to connect a smartphone to their cars (yup, that AUX IN jack).

This means new options, connectivity, and a different experience than those pushbuttons that we’ve all grown to know and love.

I played a series of videos shot at CES and also SAE’s Convergence show this fall in Detroit.  I’ve been waiting nearly a year to show them to broadcasters, and I was thrilled about the reception they received at the conference.

Radio needs to understand what the automakers – and aftermarket companies – are thinking, and how it will impact the listening experience – or should I say – the audio consumption experience.

Here’s a clip from a demo of Cadillac’s CUE, where you’ll see and hear the story behind the platform as well as a demo of how the system works.

>EMAIL RECIPIENTS: CLICK HERE TO WATCH CADILLAC CUE DEMO<

So what can the average radio programmer, manager, or owner do about the oncoming connected car revolution?

  1. You need a mobile strategy.  This is a shopworn topic in this blog, but the smartphone is the center of the universe for these systems.  Making your station’s brand available on the key platforms is table stakes.
  2. Keep your content fresh and local.  What do the car guys know?  More than you think.  To a person, each one looks at AM/FM radio as local radio – the programming that broadcasters create that no other audio entertainment outlet can.
  3. Rethink HD Radio. When you talk to the engineers, designers, and marketers at the big auto brands, they often talk about HD Radio integration as essential to providing a seamless experience for consumers – amidst the offering of Sirius/XM, Pandora, and iPods.  I know this may sound counter-intuitive to many of you who hate on HD Radio, but if you listen to these automotive designers and engineers, you will hear a different story.
  4. Get close to your local car dealers. They are radio’s bread and butter.  As Valerie told the crowd at the Arbitron Client Conference, consumers are walking into dealerships and asking about the digital dash infotainment systems – not air bags, braking systems, or convertible tops.  It is essential your local car dealership owners hear about the value of radio, and experience how it works to fill their showrooms.
  5. Take a test drive. If you don’t own a vehicle with one of these systems, you need to get behind the wheel and experience it for yourself.  Drive one, rent one, and experience a dashboard unlike any you’ve ever seen before. This is where your audience is headed, and understanding the new customer experience is as essential as understanding PPM – if not more so.

Jacobs Media will continue to be at the forefront of this revolution.  Our commitment to mobile as researchers, consultants – and of course app development – is our “center stack.”  We will be back at CES next month, as will a growing number of broadcasters who are beginning to understand that the consumer electronics and automotive industries are integral to radio’s future.

Drive on.

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22 Responses to The Connected Car

  1. Bob Bellin on December 7, 2012 at 7:51 AM

    The connected car could prove very damaging to radio. Ease of use and accessibility is a key radio asset right now, but when the entire audio spectrum is platform agnostic and activated with a button push, that advantage is instantly gone. At that point, its all about content.

    One large company just eliminated a slew of positions yesterday. One of my mother’s favorite expressions was about the farmer who said, “…had the horse down to one grain of oats a day and then it died on me.” At some point, radio is going to have to reinvent and reinvest in its product. I don’t know how much of its phenomenal resilience is tied to its easy accessibility – but if the answer is “a lot” radio would do well to find that out now, so it can fix things before everyone can turn on something else as easily as they can radio.

    Finding out after the fact might be deadly – and would lead to a very expensive fix at the very least. This is radio’s next hurdle IMO and rhetoric like “we’re local” with one live personality at an entire station won’t address it.

    • Fred Jacobs
      Fred Jacobs on December 7, 2012 at 7:58 AM

      Even the car guys – who don’t have a horse (as long as we’re on that topic) in the race – point to local, personality radio as the key to radio’s survival and success. Chris Oliviero from CBS made that same point on another panel at the Arbitron Client Conference while explaining the success of sports radio. It is notable that on the same day that radio heard a several automotive engineers talk about the importance of local DJs, all we’re reading about in the industry trades this morning is about another round of severe cutbacks, many of which took place in the studio.

      The industry, at times, is at odds with itself. As a wise politician once said, you cannot cut your way to success. In the tech environment that radio now finds itself, investment in live and local programming isn’t just a good idea – it’s the only idea.

      Thanks, as always, Bob, for getting the conversation started.

  2. JC Haze on December 7, 2012 at 10:24 AM

    Fred. O. M. G. Great video. Thanks for sharing. So the obvious question is…how pissed off will my WIFE be when I have one of these amazing in-car toys?

    • Fred Jacobs
      Fred Jacobs on December 7, 2012 at 10:49 AM

      JC, it’s worse than the remote in the family room. It’s interesting that safety is one of the first thing the auto folks talk about – and for good reason. I noticed that when I first took delivery on my Ford Edge, i was very distracted at the beginning, trying to figure out how it all worked. There’s a learning curve, and the automakers will tell you that for the most part, these systems are very first generation. Once you get used to them, the options are very cool. Great for consumers, maybe not as great for radio. Thanks for the comment.

  3. Greg Smith on December 7, 2012 at 11:42 AM

    “Irritation with MyFord Touch was cited last week by Consumer Reports as a big reason that Ford fell to 10th place on this year’s Automaker Report Card, from fifth in 2011. Ford dropped 10 places in the publication’s predicted reliability survey last year and plummeted to 23rd place, from fifth, in the most recent initial quality survey by J. D. Power & Associates. Both surveys showed poor scores for models with MyFordTouch.”

    Ford was slammed by JD Power for these systems causing additional distracted driving. Ford has a 45 minute video for car buyers on navigating these systems. The NHTSA is cracking down on such systems as SYNC, MyFordTouch, Entune, and CUE. For now, they have only issued voluntary guidelines, but I wouldn’t be surprised to see that change in the future. The menu systems are difficult to navigate and take much more time than the simple flick of a switch or turning of a knob. These silly systems could eventually disappear as consumers become more disenchanted.

    As for HD Radio, some automakers have issued public TSBs for troubleshooting HD Radio problems, and some others have issued internal Service Bulletins, for now. Remember, Ford is an investor in iBiquity. Struble recently admitted “if stations don’t step it up, automakers will move radio down the center stack of priorities in the dash, so to speak”. He’s trying to blame the broadcasters, but blame belongs to iBiquity for developing a fatally-flawed system.

    • Fred Jacobs
      Fred Jacobs on December 10, 2012 at 3:27 PM

      Greg, we are not trying to censor your comments but they ended up in spam. This one has been restored and posted.

      Regarding Sync, it is a fact that Ford has been hammered in J.D. Power ratings because of issues that customers have had with the system. As someone who leases one of these vehicles, I’ve had a rocky road at times, too. However, this is a first generation system, and as other automakers have acknowledged, Ford took one for the team. Future versions of Sync will get better and better. These systems are a reality, and safety is paramount on the minds of automakers, their designers, and engineers.

      As for HD Radio, I’m reporting what several of the automakers and their reps told me. It wasn’t just Ford – Toyota as well as some of the aftermarket companies talked about the importance of HD Radio, too. You don’t have to believe or accept that, but that’s what they say on the topic.

      Thanks as always for weighing in, and I’m sorry it took us a couple days to find your original comment. I am deleting the second one as I’ve answered your question, and it does nothing to advance the conversation.

      • Greg on December 12, 2012 at 10:30 PM

        “Advisory Board of the Digital Radio”

        “On the occasion, will also be presented a research on the profile of the broadcaster in Brazil. The results of the tests with HD Radio and DRM in Sao Paulo, Rio de Janeiro, Belo Horizonte and Brasília are available on the website of Ministry of Communications. Last week, during a public hearing of the Commission on Science and Technology of the House of Representatives, the Secretary of the Ministry of Communications Electronic Communications Genildo Lins said the tests with the two technologies have had poor results, especially in high power FM. Furthermore, the signal coverage reached 70% of that now reaches analog. The future of radio is digital, but that future is not yet. We are unable to make a decision on these results, he said.”

        http://tinyurl.com/bqt8akl

        Well, this about says it all about the “benefits” of digital radio.

        • Fred Jacobs
          Fred Jacobs on December 13, 2012 at 10:24 AM

          Greg, you are nothing if not consistent. Thanks for commenting.

  4. dave presher on December 7, 2012 at 12:37 PM

    well said Fred!

    • Fred Jacobs
      Fred Jacobs on December 7, 2012 at 2:49 PM

      Thanks for the comment and reading our blog, Dave.

  5. Dan Kelley on December 7, 2012 at 4:24 PM

    Very cool. I can’t tell you how excited I was to have my car audio pick up internet streaming from my phone via bluetooth; having the meta data included would just be icing on the cake.

    • Fred Jacobs
      Fred Jacobs on December 7, 2012 at 5:25 PM

      Dan, for consumers, it’s a whole new game. Thanks for commenting.

  6. John Shean on December 11, 2012 at 4:50 AM

    The average vehicle age of 11 years means that there is still a big market for audio system upgrades in older vehicles, something you’d have thought would have become less popular, but it’s still big business.

    Of course HD Radio is an absolute must when upgrading an entertainment system, but these after-market systems have become very sophisticated, with integrated GPS, back-up camera video-in ports, video out ports for rear seat video monitors, simultaneous video playback from the DVD player and radio playback for the driver, satellite radio tuners, Bluetooth, USB ports for audio on USB sticks, SD card slots for audio on SD cards, and iPod ports.

    It’d be nice to see more Android based after-market systems that can run apps like Torque Pro as well (monitor OBD-II port via a Bluetooth or USB adapter plugged into the USB port). There are a couple of them out there already.

    With the proliferation of “Share” plans from wireless carriers, it’d also be nice to have a cellular radio built into the system for streaming audio services and other connected apps.

    It’s also time for radio stations that have not yet upgraded to HD Radio to be dragged kicking and screaming into the 21st century, since within a few years consumers will simply not tune into analog stations when they have a choice between stations with similar content and one is HD and one is not.

    • Fred Jacobs
      Fred Jacobs on December 11, 2012 at 10:06 AM

      John, thanks for a different perspective on the “connected car.” As I speak with engineers and designers at CES and SAE conferences and contentions, it becomes clear to me that the delivery of audio content is moving in directions that go beyond what most of us in “traditional radio” can imagine or think about on a daily basis. Between the automakers and the after-market companies you see at CES, there’s a realization that technology is moving at Mach 3 while most radio companies are still driving 55. Thanks for the view and taking the time to weigh in.

  7. Steve on December 11, 2012 at 1:17 PM

    Now you can buy after-market systems for many cars that have non-standard size factory audio systems and that integrate with existing steering wheel controls. Crutchfield sells them.

    There are also add-on HD Tuners available for many factory audio systems since these systems often have a port for satellite radio which can also be used for HD.

    Some radio broadcasters are simply terrified of HD Radio. They don’t see getting an instant return on their (relatively modest) investment because the installed base of HD Radios is not yet sufficient for ad-supported radio on the HD sub-channels. They are short-sighted. What they fail to understand is that as more and more new vehicles include HD Radio that they need to at least support the HD1 simulcast of their analog channel. The worst thing for the recalcitrant stations is the “HD Seek” button on HD Radios which seek out _only_ HD stations. I’m sure that I’m not alone in using that button often so I can get stations with the highest audio quality. I also use it because a lot of the music genres I enjoy are now _only_ on the HD sub-channels (jazz, oldies, classical).

    Ironically, when I bought a new head unit for one of our cars, it just happened to have HD Radio. I selected the unit primarily because it was one of the only ones I could find that had Bluetooth built in, and also had a front USB port to stick in a USB stick with MP3 files and for iPod connection. I had never even heard of HD Radio. Now the HD Radio tuner is what I use the most.

    The FCC needs to start setting some dates. A date where all new radios are required to support HD. A date when radio stations that are capable of adding HD service are required to implement it. A date when stations are permitted to turn off analog. A date when stations are required to turn off analog.

    • Fred Jacobs
      Fred Jacobs on December 11, 2012 at 1:22 PM

      Many people of spoken about an “analog sunset” for radio, and you make that case, Steve. Many broadcasters feel they’ve been burned by HD Radio’s promise. Their inability to communicate its benefits to consumers, coupled with a lack of support for programming and sales efforts, has made HD Radio’s path in broadcast radio arduous. Ultimately, the technologists at the automotive companies may end up deciding this issue for radio. As iBiquity continues its mission to get HD Radio into more vehicles, there may be a game change here. But broadcasters need to be resold about HD Radio’s benefit because many have simply thrown in the towel or don’t believe. I feel that contradiciton when I speak with automotive engineers, and then follow up with broadcasters, especially at the station level. Thanks for taking the time to offer your thoughts.

      • Steve on December 11, 2012 at 3:03 PM

        Stations may feel burned because it took so long for HD receivers to become widely available in new vehicles. Now that problem is solved.

        You also have smaller broadcasters that lack the engineering expertise to deploy HD, and lack the programming staff to program the additional sub-channels. They have a natural fear of HD and will constantly make snide remarks about it. Eventually these stations, if in an urban area, will be sold to entities that know how to run a 21st century station.

        • Fred Jacobs
          Fred Jacobs on December 11, 2012 at 8:04 PM

          It’s complicated to be sure, Steve, but you can envision a scenario where the automakers influence how this story plays out. Thanks again.

  8. SCG Makes Headlines at Arbitron Conference | on December 11, 2012 at 2:27 PM

    [...] Jacobs Media: The Connected Car [...]

  9. Jacob Silber on December 12, 2012 at 6:11 AM

    Having family that works in radio, we still think there’s a tremendous opportunity to integrate the value of content with the capabilities of the interactive car. One of the things we’re working on at BRIGHTdriver is what we call “reactive radio”, or the capability to have two-way communication, eyes free and hands free with the listener. This could be everything from live polls, to contests, to interactive advertising.

    The last 10 years of history have shown overwhelmingly that people prefer interactive to passive/streaming content. That means that radio can maintain its advantage by doing what it does best – creating a relationship with users. That’s something that is much harder to do with pure streaming services.

    • Fred Jacobs
      Fred Jacobs on December 12, 2012 at 8:38 AM

      Jacob, there’s no queestion that with the advent of this new technology comes new opportunity. Your comments about radio’s interactivity are spot on. Good luck with BRIGHTdriver and stay in touch with us.

  10. Auto Occasion on December 19, 2012 at 3:41 AM

    Well yeah, it’s not for (nearly) 30 year-old cars with zero book value. It’s for newer cars where people may be paying over $100/mo for insurance.

    Auto Occasion

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