Riding Along in My Automobile

| June 23, 2016

Connected Mobility Conference notes by consultant Holland Cooke

 

cookewriterNEW YORK — Cabbies hate Uber but auto makers love Car-Sharing and Ride-Sharing, and eventually their dealers will too.  As I’m digesting research presented at CE Week here, the little voice in my head keeps thinking “What does this mean for car radio?”

Face it, AM/FM’s king-of-the-car status was under fire even before dashboards looked like iPad.

  • A dozen years ago, iPod plugged-into Aux jacks. More recently, research tells us, in-car podcast consumption is big (21% of on-demand TSL, and growing).
  • And all along, radio has sold against newspaper, outdoor, TV, and Yellow Pages as “closer-to-the-cash-register,” because – even with e-commerce – most shopping still involves driving to the point of purchase. So dashboard disruption threatens radio dollars.

There are entire conferences dedicated to radio’s struggle to maintain in-car use; although those discussions seem to focus on remaining conspicuous on new hardware, even as radio continues to downgrade its unique software, the local programming that in-car apps don’t offer.

Wider-Angle Shot

C3 Group president Doug Newcomb defines “Connected Mobility” as “using technology and people-to-people and machine-to-machine communication to get people from point A to point B.  In other words, ‘Uber.’”

Don’t think this is futuristic.  Here in New York, there are now more Uber drivers than taxi drivers.  Uber has 160,000 drivers worldwide; and they’re looking for more.  You may have heard their help wanted ads on The Sean Hannity Show and elsewhere.

Keynoting January’s 2016 Consumer Electronics Show, GM CEO Mary Barra predicted that her industry “will change more in the next 10 years than it has in the last 50;” and Newcomb reckons “it’ll happen sooner than that.  In the next few years, we’ll look back on how quickly things have changed.”

Car Sharing: It’s Not the Death Knell You Think It Is

Presenting research his company has funded, Kelley Blue Book manager/commercial insights Akshay Anand concludes that Car- and Ride-Sharing are “not an immediate threat to car buying.”

  • The transportation method most-replaced by Sharing is, unsurprisingly, taxi rides. A close #2: car rental.
  • Data demonstrate that, still, “Americans prefer to drive themselves.” Among “Feelings Toward Ride Sharing” which the survey tested:
  1. “a good way to combat drunk driving” (69% of 1916 polled);
  2. “I prefer to drive myself rather than have a ride” (67%);
  3. 63% reckon “ride-sharing will continue to grow.”
  • And users say sharing is handy “when out of town on vacation or business.”
  • “People still want to own cars,” he concludes from poll data. “Ownership gives you a sense of freedom and independence,” and “pride and success.” Many think owning “is a smart investment.”

And they may end-up owning a car they first tried by sharing.  Because of BMW’s Sharing test in Seattle, they’ve sold some Beemers there.  BMW ReachNow CEO Steve Banfield quoted one eventual buyer: “I love this car!”

How Car-Sharing & Ride-Sharing Are Reshaping the Auto Industry

Not wanting to be left behind, auto makers themselves are starting car-sharing services!  Banfield says “I give [auto makers] a lot of credit” for reading the room better than another business we know: “What happened to the music industry?”

During Q+A, I asked Kelley Blue Book’s Akshay Anand “The biggest surprise you spotted in this research?”

  • His reply: That consumers like the idea of Car-Sharing/Ride-Sharing from the existing car dealers who are so important to local radio advertising.
  • Soon, instead of letting you use a dedicated loaner while your car is in the shop, the dealer might let you sample its Sharing fleet…and THAT will be opportune radio ad copy.

All this won’t happen overnight.  It’s already been happening, slowly, for years.

Remember how cool it was to get your first remote key fob?  In the session “Predicting the Financial and Societal Impact of Self-Driving Cars,” MIT’s Bryan Reimer described how “the autonomous [car] is moving from the lab to the road.”

Even with all the miles Google and others have logged with Jetsons-looking robo-cars, “We are working with machines in ways that we are not comfortable with”; and while the focus is on technology, “our behavior may be the hardest part to change.” The average age of cars in the USA now is 11 years, so even as cars drive-themselves, and take human error out of the equation, egg-shaped pods will share the road with classic muscle cars and poorly-maintained beaters, some driven by texting and/or drunk drivers.

So about radio…

As if broadcasters weren’t already demographically-challenged.

  • Millennials grew up without Baby Boomers’ AM/FM habit. Car ownership was freedom to Boomers.  Younger people escaped their parents’ home virtually, online.  And in 2017, Millennials’ retail spending will overtake Boomers.’
  • Many young people can’t afford a car and/or live in urban areas where they get around better without cars. Many of those who do drive bring along their own audio.
  • When you’re Sharing, it’s not your car, with your radio presets.
  • There’ll be new competition for in-car time. Automakers will tout “Your Netflix in your [self-driving] car,” etc.  Or you might simply sleep en route.

Change will come at a different pace in different places, quicker in urban areas, slower in rural areas.  BMW’s Steve Banfield quipped that, “from a tech industry standpoint, it’s taking too damn long.  From an auto maker and government standpoint it’s happening too quickly.”  But change is coming.  Norway has banned internal combustion engines effective 2025.

The car dealers whose ads fund local radio will have a different level of relationship with consumers than they’ve ever had before.  So should radio stations.  Smart broadcasters are moving aggressively into the podcasting that today’s on-demand culture has caught-up with.  And if local-local-local is something they can get from your brand, you’ll remain in listeners’ media mix.

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Holland Cooke (www.HollandCooke.com) is a media consultant working at the intersection of Talk Radio and the Internet.  Follow him on Twitter @HollandCooke.

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Category: Analysis