top of page

Radio’s Auto Dashboard Strategy: We’ve Got It All Wrong

In the race to exploit new digital opportunities, Kleiner Perkins partner Mary Meeker has described three “consumer Internet ‘white spaces’ yet to be reimagined.” One of these was the “ear” and another was the car. And she describes the latter as “largely untapped.”

Naturally, broadcasters are in a tizzy because one industry’s white space is another industry’s breadbasket. Indeed, roughly two-thirds of radio listening occurs away from home, largely in autos. What to do? What to do?

We know that automakers are pouring effort into upgrading their infotainment platforms to keep up with the powerful devices in the pockets of every driver. But this effort is also designed to keep up with rising demands for a richer, more compelling entertainment and information experience where the driver or passenger can make more choices or easily bring their own choices wherever they go.

For years, SiriusXM has been gobbling up a portion of the driver’s listening time, largely under the radar of Arbitron, the ratings service which measures radio listening (including listening to SiriusXM). Arbitron doesn’t report SiriusXM listening alongside radio listening in part because most of the satellite radio channels are non-commercial and thus of no particular interest to advertisers. This, of course, creates a skewed view of the world — one that suggests a bundle of radio stations represents a universal set of listening options simply because combining the audience shares of only those stations adds to 100%, even when it’s a smaller 100% today than ever before.

Also absent from the official radio ratings: Pandora, Spotify and Apple’s iTunes Radio — advertiser-supported, all.

At the same time, the automakers are opening up their infotainment systems to outside developers. They are intent on getting in-step with the rising importance of dashboard technology in consumers’ decisions about what autos they will and won’t buy. Remember the days when TV ads for new cars focused on noise-reduction, power and suspension? Today, you’re more likely to see a finger touch a Pandora logo on a souped-up dashboard.

We can pretend that all these new options add listening and don’t cannibalize traditional radio usage at all, but the evidence tells a different story. In fact, Arbitron’s own data shows that the population is spending less time listening to radio now than previously. According to Arbitron, the average-quarter-hour rating for measured media in 30 PPM markets has declined by 9% from 2010 to 2012 alone.

So radio broadcasters are right to be concerned. But what to do about it?

Radio broadcasters are racing to wheel and deal for their standalone apps to figure prominently in auto dashboards. They’re teaming with aggregator apps like TuneIn and IHeartRadio. They’re rushing to secure new shelf space for their brands in an environment where lots of new shelves just opened in a much bigger supermarket.

There’s nothing inherently wrong with these tactics, but they are not nearly enough.

See, radio has the best part of the shelf-space already — not only is it built into every single automobile, but it’s easy, familiar, and part of virtually every consumer’s daily habit. Plus, it features brands that many listeners have established relationships with over the years. These are powerful advantages not to be undervalued or underestimated.

Without question, radio does a great job of making most people happy most of the time. Radio is “good enough” for most consumers, but it will never be “perfect” for you. And as long as you have new choices — especially choices that empower personalized services and features — attention and usage will always drip away from radio to something else.

The challenge for radio is not to establish new beachheads in new corners of the dashboard but to be irresistibly attractive regardless of what other seductive choices beckon from the dash. Be so good that novelty is just noise.

There are two ways to do this, and they are not mutually exclusive: “All for one” and “One for all”….

3 views0 comments


bottom of page