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How The Car Industry Has Driven Audio Consumption Trends

9-17-13

A message from Radio Ink Publisher Eric Rhoads

According to the New York Times, 2015 will be the biggest new car sales year in the history of America. The average American is driving an 11-year-old car, and those will need to be replaced. Car companies are counting on this boom, which some predict could have a whopping 60 percent of Americans buying new cars that year.

Will this new-car boom affect the radio broadcasting industry? One can assume it will impact car dealer spending as they compete to be chosen as the place to purchase a new car. But how does it affect radio listening?

Enter The Connected Car
If you haven't yet heard the term "the connected car," it's all about your car being connected to the Internet and to your smartphone. Every new car today has connected-car strategies, and the level of sophisticated integration for 2015 new car releases is way beyond what you'll see in most cars today. If you read my recent missive about the Tesla, you'll get a better idea of what to expect. Your car becomes a portal to all your entertainment preferences, all the apps on your tablet or phone, and connectivity to everything you need as you drive, including much more sophisticated integration of weather, traffic, and GPS.
 
Audiotainment: The New Buzz
The new buzzword in Detroit is "audiotainment," the part of the dash radio currently dominates. In most cars today, the audiotainment is AM, FM, maybe SiriusXM, and your own music source, either a CD player or a link to your phone or MP3 player (unless you're driving a fairly late model). New cars are all about audiotainment, and Detroit has discovered that the audio choices in a car, and how seamlessly they can be integrated into the driver's life, can be a major factor in a consumer's decision to buy one brand over another. Automakers have hired several thousand high-tech people, because the battle for the car comes down to its tech features, many of which are dedicated to audiotainment. Every car company has a different theory about which approach will be best embraced, and they are spending deeply to make sure you pick their system. If you have not seen this promotional video for Cadillac's CUE, watch it and see if you can count how many times you see AM or FM and how many times you see iHeart or Pandora.

Audio Has A Historic Role In The Car
Audio has mattered in the car since 1932, when Blaupunkt installed the first radio in a Studebaker. Cosby made the first factory-fitted car radio in 1933. In the 1950s Ford came out with a radio called the Town and Country that had a switch for listening in town or at a distance, in the country -- it actually moved a rotor on the tuner to let it receive distant AM signals. In 1955 Chrysler was the first with an all-transistor radio (a $150 option), and in 1956 Chrysler introduced an in-car record player that played 16 2/3 rpm discs known as "Highway Hi-Fi." Later in 1959, the automaker introduced an in-car 45 rpm record player.
 
In the 1960s, the 4-track tape was introduced, and later the 8-track was launched, to compete with the 1964 Phillips launch of the Compact Cassette. The first car in which FM was a standard feature was the 1972 Lincoln Continental, which also had an in-dash 8-track.
 


Most car buyers wanting FM had to use an Audiovox FM converter, a receiver that connected and played through the AM radio -- early FM rock stations gave them away as promotional items. It was not until about 1983, however, that the car market was 100 percent saturated with FM radios (new and used car market) -- and FM listening shares surpassed AM shares for the first time in 1985. Most of the first new car models that had new XM or Sirius receivers built in are now in the used-car market.

 


Unintended Consequences
Until recently, I never really stopped to think about how the decisions made by Detroit impact the history of the radio broadcasting industry. Yet when you read about the history of radio in the car, you start to understand that the car companies have always used audio devices as a selling point or point of differentiation. Ultimately, the car companies are a major distributor of radios, and they are seeking new and exciting things to talk about. Their decisions today will affect the future of the radio broadcasting business.

What do they say about history? Yes, you need to understand it so you don't repeat it. As you know, I wrote a piece last spring after hearing auto company representatives talk about a possible world of cars without AM/FM receivers, cars that could get radio only over the Internet. Our industry jumped on the issue, and Radio Ink was able to get at least two major brands to issue statements that AM/FM receivers will remain in their cars. I was pleased to see the new Tesla will be home to AM and FM as well. Yet Detroit has a mind of its own, and automakers are going to do what they think will sell the most cars. They want to provide consumers what they want, and they hope to be ahead of their wishes to offer cool things they didn't know they want or could get in their car. As I mentioned in an earlier note, the car is the new home to AM, FM, SiriusXM, plus TuneIn, iHeart, Pandora, Spotify, and pretty much any other audiotainment app you prefer.




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