03/13

Radios Ripped from New Cars? “Not So Fast,” say Consumers

You can climb down from the ceiling now, Mr. Broadcaster – it turns out new cars will feature FM/AM radios built-in for the foreseeable future (although certainly not forever).

The logic of this should be obvious to us all, but particularly obvious for anyone who bothers to talk with consumers.

And I did.

Between March 9 and March 10 2013, I fielded a random, balanced, national online study of 1,000 consumers and asked how they feel about those radios in their cars – and how they’d feel if they disappeared. Each chart shows five rating points, from “DISAGREE” to “AGREE.”

First question – Agree or Disagree: “If automakers removed FM/AM radios from my next new car, I probably wouldn’t notice”

Um, yes. Pretty clear. When you forget to install a radio in a brand new car, Mr. Automaker, people will notice.

Second question – Agree or Disagree: “It’s okay if automakers remove FM/AM radios from my next new car because I could always listen to my favorite stations on my mobile device via the Internet”

Um, no, it’s not okay, actually.

The ability to access audio content via the Internet from mobile devices is not viewed by consumers as a substitute for the easy, ubiquitous, dependable radios in their dashboard.  It’s viewed as a complement – a new platform for new choices – not an invitation to limit choice to the mobile device-only. And not an invitation to create more work for folks accustomed to the miraculously easy tool that is a radio.

Don’t get me wrong, by “complement” I don’t mean these new choices will add to overall audio usage.  Quite the contrary, I expect. Look for plenty of radio cannibalization, but less if your choices are among them, right?

Broadcasters, I would argue that you’re not streaming content to substitute for over-the-air listening, you’re streaming content to give new people new experiences to consume in new places on new platforms and in new ways – the experiences, places, platforms and ways of their choosing, not ours.

And woe unto you if you don’t keep pace with their choices.

Consumers are likely to use online radio as a terrestrial radio substitute, but that’s their choice, and it’s under their control.

Third question – Agree or Disagree: “Even if I could always listen to my favorite stations on my mobile device via the Internet, I would be unhappy if automakers remove FM/AM radios from new cars.”

A flip of the previous question. And oh yes, Mr. Automaker, “unhappy” appears to be an understatement.

The automakers understand all of this, of course.  And for consumers it goes without saying.

Now, hopefully, broadcasters know the truth, too.

The disruption is happening and it is bound to accelerate.  But we will not wake up tomorrow and discover new cars with no radios. Indeed, the problem is that those new cars will be full to the brim with entertainment choices galore.

And, as I said, woe unto you if you don’t keep pace with consumers’ choices.

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  • http://twitter.com/jeffschmidt Jeff Schmidt

    I’m pretty sure you are one of the few people Mark, that have repeatedly cautioned about asking people to project or imagine how they’d feel about potential future scenarios.

    4 years ago I participated in research that asked me if I would ever consider using my phone for most of my purchases (digital wallet) – I thought the idea was insane. I could not imagine it being easy to do.

    Today it’s closing in on total viability and I can’t wait to ditch my wallet for just the phone.

    4 years ago I scoffed at the question of feeling comfortable depositing a check into my bank account with only my phone. Today it’s totally awesome!

    Ask me – ”Even if I could always do my banking/payments on my mobile device via the Internet, I would be unhappy if banks removed ATM machines.”

    Today I might answer yes.

    Check back with me in 5 years when I realize I never have a reason to go to an ATM machine because mobile technology has made it unnecessary.

    Obviously ditching AM/FM is not going to happen tomorrow. But as the dashboard builds out (as smart phones have) the things we couldn’t imagine enjoying or liking today will become the new “the way it is”.

    I know you’re making that point too Mark, I just cringe at anything that asks people to express feelings about imagined, seemingly radical changes in the future.

    Especially when the result of which seems to support the status quo.

    If the financial institutions took my responses seriously 4 years ago – we wouldn’t be enjoying digital wallets or depositing checks with our phones today.

  • parikhal

    10% ‘wouldn’t notice’ if AM/FM were gone. And 17% ‘disagree’ that they would be unhappy if there were no AM/FM in the car. Those aren’t small numbers in a nation with over 250 million passenger vehicles. Definitely a bit of a canary singing in the coal mine.

  • http://www.markramseymedia.com Mark Ramsey

    No question about that, John. We should not be blinded by the big bars.
    Still, the extreme nature of these responses is about as unambiguous as I’ve seen!
    Thanks for the note!

  • http://www.markramseymedia.com Mark Ramsey

    And that 17% is a strong disagree, it’s worth noting!

  • http://www.markramseymedia.com Mark Ramsey

    Jeff, great comments!

    Keep in mind that this survey is not about how people will feel in five years – that is not particularly knowable. It’s about how people feel today. But it IS how people feel today, so when anyone suggests that radios will be yanked out of new cars because nobody gives a crap, we are able to clearly demonstrate that’s not true.
    Fax machines didn’t get yanked out of offices when we discovered scanners. But the more unused they became the less we wanted to keep them. WE made that decision.
    VCR’s didn’t get yanked out of living rooms. But when we stopped buying VHS in favor of DVD it ceased being sensible to keep the VCR under the TV. WE made that decision.
    The cost of a radio – both in terms of the real hard $ and the “dashboard clutter” – is trivial to automakers. Consumers consider them as much a part of the car as the steering wheel at present. Rather than try to change that opinion or to assume it’s changed, the right move is to let it change by itself on its own time.
    And it will. But not today.

  • Dave Mason

    Good questions, good answers. Let’s not forget that radio is a utility to most. They will follow the easiest path-and if it’s not there they will go somewhere else. While it’s our bread and butter, the majority treat it like it’s water. Will it be different in 5 years? 10? How long did FM take to catch on? How long did HD take to..oh, never mind. Still boils down to finding and then GIVING them what they want, doesn’t it ?

  • http://www.markramseymedia.com Mark Ramsey

    I made exactly that point in my Q&A today with Radio Ink, Dave. You’ll hear it tomorrow!
    Thanks for the great note.

  • http://twitter.com/TomAsacker Tom Asacker

    Great post Mark! Habit drives the present, and desire drives the future.

  • http://www.markramseymedia.com Mark Ramsey

    Keith, I’m obsessing on the big number and saying “that’s big” while you and John are obsessing on the small one and saying “that’s not small!” I think we’re both right, but my number is still WAY bigger than yours. And that’s my point. Because having seen hundreds of stats in research studies over the years, this one is one of the LEAST ambiguous I’ve ever seen.
    To your analogy:

    Optical drives were removed for (at least) two reasons:

    1. Folks weren’t using them anymore thanks to other ways to receive and issue large files. I don’t think that analogy with radio nearly holds to the same degree.
    2. There was a value transfer. It wasn’t just “optical drive out” it was also “thinner form factor and lighter weight in.” This is a tradeoff. Removing a radio adds no value in exchange.
    So for those reasons I think the analogy isn’t quite fitting.

    Of course people adapt to what they’re given. But the whole point of making stuff for people is to give them what they want and solve or anticipate their problems. Based on these research numbers, yanking out a radio – which consumers consider a given in every new car – would add problems, not resolve them.

  • http://www.markramseymedia.com Mark Ramsey

    As always, EXTREMELY pithy and well put, Tom.

    Fundamentally it seems to me that the easiest and wisest decision by far is leave the radios alone and continue to build out the new dashboard around it. That fulfills both the habits of today and the desires of tomorrow, and it does so at negligible cost to automakers.
    One day the radios will go away, but not today.

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  • http://twitter.com/jeffschmidt Jeff Schmidt

    That sounds a bit like following to me, Mark.

    Hugh McLeod coined a great phrase – “control the future by inventing the future”

    Clearly the financial companies surveying me knew where they wanted to lead me years ahead of my own imagined desires.

    Is radio looking into the future, designing a vision and willing to lead listeners there?

    Or will we continue to ask questions, have our dominance confirmed and sit back and wait for consumers to change “on their own”.

    Thing is – when they do change – it won’t really be “on their own” – they will have been led by someone that anticipated their desires years ahead of time.

    Will that be us?

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  • Kent Hatfield

    Phase out Auto Radios… Now wait just a minute. Haven’t the federal and state governments spent $$$ for roadside radio systems. I see a mandate looming.

  • http://www.markramseymedia.com Mark Ramsey

    I don’t agree at all.

    This is not some futuristic discussion, it’s a practical conversation about current expectations and current habits. Tell me you will take away my AM/FM radio in two years and you violate both.

  • http://www.facebook.com/profile.php?id=668070006 Keith Berman

    (Sorry to be late on this, I just saw the notification.) I think the analogy, while somewhat ill-fitting to your point, does still apply.

    To your point that there were other ways to send and receive large files, radio does have the same issue here — the content delivery that radio offers is now available through other connected-dash means. Cell phones are delivering all kinds of content for listeners, from news to sports to customizable music streams, and now iHeartRadio is even offering local inserts for its streams based on geolocating. And as I wrote elsewhere, with AM/FM radio giving itself over even more to voicetracking and syndication, what local, timely value is AM/FM radio really offering these days that distinguishes it from what people can get over the Internet?

    And as far as the value of removing radio… I suppose that would be reducing clutter on the dashboard. With all of the options now currently available through a connected dash, AM/FM has become just another touchspace for drivers/passengers, not a center focus of the dashboard like it has been in the past. Even reducing the radio to being just one option on a touchscreen has made its presence less significant in the car — my iPhone is technically primarily a phone, but I use it for so much more and barely use the phone function, which has been relegated to just being one app on the screen.

    I’m not saying that I don’t agree with you — yes, there are still significant numbers of people who firmly express a lot of interest in having an AM/FM radio in a car. But as it functions now on a connected dashboard, I fear AM/FM radio is being lost in the noise of all of the other apps on the touchscreen. As consumers become more used to AM/FM being just another entertainment option as opposed to the primary option, its importance will fade. That’s why AM/FM has to concentrate on providing the best content value to consumers, not just complain about how it’s always been important in the dashboard and should always remain there.

  • http://www.markramseymedia.com Mark Ramsey

    That may be true but the time frame is long indeed! :-)

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