I vividly remember the good ol’ days when my dad’s 1973 Oldsmobile Delta 88 had a Delco AM radio right in the center of the dashboard. This classic radio had two knobs, with the left one controlling the volume and power, and an additional inner ring for adjusting the tone. However, let’s be honest, the tone adjustment was pretty useless. The right knob was dedicated to tuning in stations, and turning it would send an indicator across the dial until you found the desired station. Once you discovered it, you could pull out one of the five slat-like buttons on the front of the radio, push it back in, and create a memory for the tuning indicator. With all five buttons programmed, switching between stations became a breeze by simply pushing the corresponding button, which responded with a satisfying ka-CHUNK.
Those were the days when the radio was the sole source of entertainment in the car, leading to inevitable fights over who got control. However, times have changed, and they continue to change. This realization hit me while attending a couple of panels at Canadian Music Week in Toronto this month.
As the automotive industry shifts from internal combustion engines (ICE) to electric vehicles (EV), manufacturers and dealers are searching for new ways to monetize their vehicles. One area heavily impacted by this shift is after-sales service, which traditionally generates the most revenue. With EVs, there are fewer maintenance requirements like oil changes, radiator fixes, belt replacements, injector cleanings, exhaust system replacements, and spark plug changes. While there is still a need to attend to the mechanics of the electric motors, as well as tire swaps, bodywork repairs, and brake maintenance, overall, EVs require less service compared to ICE vehicles.
The lost revenue from decreased service requirements needs to be replaced somehow, and that somehow is the dashboard. Manufacturers worldwide are exploring ways to monetize the vehicle experience not just for the driver but for all passengers as well. Data plays a central role in this endeavor. More vehicles are equipped with cellular connections, enabling them to exchange various types of data with the cloud. Modern cars have become complex computers on wheels, running on millions of lines of code. To function optimally, they need to be connected to the internet.
The introduction of “pillar-to-pillar displays” is an emerging trend. These displays are essentially long electronic ribbons that extend from the driver’s side door to the passenger’s side door. While the driver still has all the familiar virtual dials and indicators, passengers are invited to engage with their own displays, which can include vehicle analytics, navigation maps, video screens for platforms like YouTube and TikTok, and more. Luxury car brands like Mercedes and Porsche are already deep into this territory, with their S-Class, EQS EV, and Taycan models. Hyundai/KIA is also not far behind. Having driven all these vehicles, I can confidently say that it’s an exciting development.
Despite the availability of CarPlay and Android Auto, automakers are now shifting toward proprietary systems that they can control, allowing them to harvest user data. By gaining control over the dashboard, automakers and their partners can offer services and features as subscriptions, similar to how satellite radio has been delivered for decades. BMW’s subscription-based heated seats serve as an example. The car comes with the necessary mechanics, but you can only utilize them by paying a monthly fee. Now, think about the other options in your current vehicle. Which ones could potentially be remotely controlled and accessible only through a subscription?
But we’ve only scratched the surface. The next version of the BMW 5-Series will offer a Tivo-like option. Passengers, each with their own individual screen, will be able to access a wide range of streaming TV and recorded content. This is a significant upgrade from the minivan DVD players we’re accustomed to, isn’t it?
This brings me back to my dad’s old Delco radio. Radios have been a standard feature in vehicles, providing free access to news, information, and entertainment. However, as vehicles become more connected, AM/FM radio will likely be delivered via internet protocol (IP) instead of the traditional over-the-air transmission. This means radio content will be streamed to the car using cellular data and interpreted by software, eliminating the need for old-school antennas and tuners. Of course, data comes at a cost. Since manufacturers control the software installed on the dashboard, it’s highly probable that we’ll have to subscribe to a radio tuner package in the future.
Now, here’s the bad news. Local radio will no longer be free and unlimited. With the rise of numerous subscription-based offerings, radio runs the risk of getting buried among a multitude of news and entertainment choices. Broadcasters will need to figure out how to navigate this challenge.
However, there’s also some good news. AM/FM radio has always been a one-way medium. By transitioning to IP delivery, cars and occupants will be able to engage in two-way communication with broadcasters, opening doors for on-demand and personalized offerings. Real-time listening will still have a place, but there will be more opportunities for curation on both sides, not to mention advertising. I’m currently collaborating with a company envisioning a future where drivers can call up a display for, let’s say, Tim Hortons, to pre-order their favorite coffee and donut combo even before reaching the drive-through. If that’s your regular order, the car might even make the call ahead as you approach your usual location, without you having to lift a finger.
But there’s one more challenge to address – audience measurement. Compiling radio ratings has always been imperfect, with results prone to wild swings and inaccuracies. IP delivery of radio will enable precise determinations of who is listening to what and when, at least within the vehicle environment. I recently witnessed a demonstration of a system called DTS Soundstage that generates real-time dynamic heat maps of people listening to specific radio stations in their cars. For broadcasters, this level of accuracy and granularity concerning audience habits and movements is what they’ve been dreaming of.
How long will it take for all these changes to become a reality? Not as long as you might think. The average age of cars on Canadian roads is around 11 years, and it’s even higher at 12.5 years in the U.S. As older analogue vehicles fade away due to government demands for more EVs, we can expect a complete transformation in the appearance, functionality, and cost of vehicle interiors by the early 2030s. It’s never too early to start budgeting for these changes.
To conclude, the shift in the automotive industry is paving the way for a revolutionized car experience. From advanced dashboard displays to subscription-based services and IP delivery of radio, the opportunities are endless. However, broadcasters and manufacturers must adapt and strategize to avoid getting lost in the sea of offerings. With proper implementation and innovation, the future of in-car entertainment and connectivity looks promising.
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