We get so busy in our day-to-day lives that we sometimes forget how “it used to be” before technology entered our world. We are teased with glimpses of what life is going to be like in 25 years, but there is so much that we can experience now. Radio, as we remember our parents telling us, was amazing back in the day when families would gather around to listen to live comedy, drama, music and news. Today we can experience radio on our phones. Dave Pratt of Doublewide Network sent me this article by Henry Payne, The Detroit News, October 24, 2014. I am reprinting this because Mr. Payne can do a better job than I can in explaining that the future is NOW.
INTERNET CAR RADIO POSES BIGGER THREAT FOR LOCAL AM-FM
Twenty-five years ago, car makers decorated their auto exteriors with eye-catching wood trim. Today, the wood is on the inside, complementing flashy center consoles with seven-inch, digital touch screens.
The car dashboard is being transformed and it’s taking AM-FM radio with it.
Just as it did newspapers and broadcast television, the Internet revolution is roiling the local broadcast landscape that has long held a monopoly on the car radio.
With center console infotainment systems, the in-car landscape has undergone a seismic shift.
Now, AM-FM stations face a tipping point as auto makers change the user interface in vehicles from radio to Internet.
“The center stack has changed from two dials and three buttons to very complex systems that contain so many different options,” says Paul Jacobs, vice president of Jacobs Media, a radio consulting firm in Bingham Farms
It’s a new landscape. Beginning with this year’s Chevy Malibu, every new generation GM vehicle will come with a Wi-Fi hot spot that will allow up to seven devices to connect directly to the Internet.
In December, the Hyundai Sonata will follow suit.
This means customers can more easily bypass the AM-FM dial and go straight to their favorite Internet radio service.
“It’s like the introduction of central door lock mechanisms,” says radio consultant Larry Rosin, president of Edison Research in New Jersey. “Once you don’t have to reach across the car to lock the doors, you never want to go back. It’s the same with the choice Internet radio offers.”
Advertisers are following the users.
While local media ad revenue in the U.S. is expected to increase 2.8 percent (to $151 billion) by 2017, that growth is expected to come almost entirely online. According to BIA/Kelsey, online advertising will rise 13.8 percent per year.
According to an estimate by Statista, there are some 160 million digital radio listeners — a number expected to hit 183 million by 2018.
That trend is driving once-big radio players like Walt Disney Co., which has radio stations that cover 42 percent of the country, out of the industry. Disney is selling 23 stations and going digital with Radio Disney kids programming.
Unlike newspapers which have seen customers move away from home delivery, the Internet radio revolution is not driving listeners out of the car. Just the opposite.
According to Jacobs Media, half of radio listening is in the car, with that percentage increasing with each new generation. For example, 45 percent of baby boomers get their radio fix in the car compared to nearly 60 percent of Generation Y. One-fifth of cars on the road are “connected” via Bluetooth or Wi-Fi. With 90 percent of Gen Y drivers carrying a smartphone — versus 65 percent of baby boomers — in-car connectivity for new cars is a must.
TRANSLATION: Old school AM/FM radio is losing its last foothold. The future of in-vehicle listening belongs to the internet.
Nancy Hugo CKD is the founder & editor of DesignersCircleHQ.com, an online magazine for the Arizona Design Community. She is also a Certified Kitchen Designer, podcaster, party planner, networker, teacher, wife & mother.
In her spare time she enjoys photography, cooking, traveling and meeting new people. Want to know more? Go to NancyHugo.com or call 602-469-6231
