Fasten Your Safety Belt

There are big changes coming to the ubiquitous “center stack” of the automobile. The “head unit” (I’m learning car speak) is where AM/FM radio has thrived for so many years. There is clearly change happening, or frankly, there would be no DASH Conference, now in its third year. The “land-grab” for screen space in the car is underway. Now.

Last week’s DASH conference in Detroit put on by Jacobs Media and Radio Ink was a fascinating mashup of auto companies and radio people. The average American spends 508 hours every year behind the wheel, so there are a lot of big companies desirous not only of a presence, but the rich stream of data.

Over the past few years each auto manufacturer released their own dashboard solution, and most were deservedly panned by users. JD Powers, which presented a study of buyer preferences, made it clear that many purchasers are frustrated with poor technological experiences in the car. Which begs the question about who will control the dash. GM recently announced that Apple CarPlay and Google Android Auto will be featured in their entire line of 2016 cars. That tells you a lot about where things are going.

Here are couple of key takeaways from DASH:

1. There will not be an endless number of apps in the car - It’s too confusing for consumers and a safety issue. So space is at a premium.

2. More loyalty to phones than cars - According to JD Powers, people have a greater loyalty to their phones than their cars. Phones are rapidly becoming the new media center, so it is likely that customers will bring their own digital experience to the car. That strongly suggests Apple and Google play a big role here.

3. People crave simplicity – There is deep frustration with much of the complexity for audio systems in cars today. That’s good for AM/FM. But people also crave choice. That’s not good for AM/FM.

4. Create demand outside of the car to create demand inside of the car – Simply put, if the phone is the conduit, media needs to win the phone. With people spending 94% of their time out of the car, that’s a pretty essential paradigm.

5. Yes, you should be paranoid - What are you worth to a car company? There is a lot of money in data. Cars can feedback a ton of valuable information to various services – where you have been over the past 3 months? The feedback loop is already in place and there are many companies with sophisticated plans to mine that data. Go ahead – be paranoid.

Note the podcast app built into Apple CarPlay

6. Apple and Google understand the money – Maybe you figured this out before, but it didn’t occur to me before DASH; a huge reason Apple bought Beats and aggressively moved into the music streaming business is to complete their own dashboard eco-system. Otherwise, people might choose others such as Pandora or Spotify. Similarly, Google’s recent announcement that they are providing a podcast app suggests they will be protective of their own eco-system.

7. Here comes Beats 2, 3 and 4 – Just as Pandora has unambiguously said they are going after radio, Apple will most certainly announce more of their own radio channels. So within CarPlay you can choose the “lean forward” experience of podcasts or streamed audio, or the “lean back” experience of curated and hosted radio channels from Apple.

8. Many businesses will be affected by changes in the car – One auto consultant said many will be affected by the impending dashboard changes but “radio is first on the list.” You have been warned. No on will take away the AM/FM buttons, but they may be harder to find, or in the case of Google and Apple not in their graphic UI.

9. Pandora has made huge inroads – They are featured on a lot of cars and have marketed extensively to local dealers. Just go into a dealer and see the signs. iHeart has some presence as well.

10. “My kids don’t know what radio is” – It is not lost on auto manufacturers that there is a generational divide and many young people are opting for audio beyond AM/FM. And today’s kids are tomorrow’s auto customers.

11. This is serious business. There are people with titles like “Director, Connected Car Innovations” at the major companies. And not one of them is about the status quo.

It was a two-day conference with plenty of data and opinion to wrap around your “head unit.”

Posted by Steve Goldstein