Hello. I’m Michael Hill, and I run UK Radioplayer. It’s a joint venture between the BBC and commercial radio. We work together to help grow digital listening - particularly on devices which are connected to the internet, like computers, phones, and tablets.
Radioplayer launched in 2011, as a way of listening to UK radio through your desktop computer. It’s a pop-up web player (this is the BBC version), and it’s used by hundreds of stations across the UK.In 2012, we went on to launch Radioplayer on mobile, and we now have apps for iPhone, Android, and Windows Phone.And last year, we launched a tablet version for iPad, Android, and Kindle. These have simple, visual interfaces, and they’re helping people discover more UK radio.What we’ve learned throughout all this is that - the interface is critical.
Now, this year, we’ve moved on from launching apps and web players, and we’re working with the whole industry to solve some important challenges, through experimental prototyping. The biggest one of these is Cars.
And ever since then, broadcast radio has reigned supreme. These are the latest figures from the 2014 ‘Infinite Dial’ survey in the States. They’re comparable to figures I’ve seen from Europe too. Proper radio still rules the car. And its not that surprising, really, when you think about it. In many ways, cars are the ideal radio listening environment. Drivers need to watch the road, which means we have no competition from visual media. They might be on a long journey, which means they value companionship and information. They’re in a great stereo listening environment with hi-fi speakers. They have a good outdoor aerial, and battery life isn’t an issue.
In fact, you might say that Radio and the Car go together like Roast Beef and Yorkshire Pudding.
The inventions of radio and cars happened pretty much around the same time, and it was an obvious match – like PB&J. Radio just went perfectly with the car. Our earliest memories taking driver’s ed and getting our learner’s permit was putting the key in the ignition, starting up the car, and turning on the radio.And broadcasters have taken this relationship for granted….for decades. Radio has always been the primary form of information and entertainment while we drove. Oh sure, the 8-track player, the cassette, and the CD all made appearances over the years. But this simple relationship is changing – and it’s happening quickly.
And then there’s the revenue piece. Here’s the latest info from the RAB – radio revenue by category. And you can see where automotive ranks. Now you’ll also note that while some of these silos – like communications/cellular, many forms of entertainment, and professional services are all up well more than 20%, automotive is only up 2%. Maybe that small growth is part of a bigger story. As you’ll see later on, car dealers have more options to select from and are moving dollars to digital platforms. So while we’re happy that automotive remains at the top, we are concerned that the trendlines aren’t great. And remember, 2013 was a huge year for new car sales, putting this minimal growth into clearer perspective.And that’s something we’re going to take a more granular look at later in this presentation.
My company has gone to school and we’re now majoring in the “connected car.” We’ve spent the past 5 years attending car shows. Telematics conferences, and conventions like the famous Consumer Electronics Shows in Las Vegas. Telematics Update, and the Society of Automotive Engineers’ “Convergence” conference in Detroit. We have appeared as presenters on “connected car’ sessions with executives from the automotive industry in engineering, sales, design, and marketing and have learned a great deal about what is happening in this space – called telematics – and where radio fits in. Sadly, very few radio executives attend these conferences. But I can tell you that SiriusXM, Pandora, and many other new competitors are there – trying to represent RADIO. The good news is that iBiquity and HD radio are on hand, too.Today, we’re going to take you backstage, behind the scenes, and onto the convention floor, inside the cars themselves, and on the dealership floor so you can see first hand what’s gong on with the “connected car” and why the automotive industry is so excited about it.
And all that is why we’re using today’s session to hit the hazard warning button. Yes, radio’s still popular in cars, and yes, you can still find the radio in those interfaces if you look hard enough. But there’s a huge amount at stake – between 20 and 50% of all radio listening happens in cars, depending on where you are in the world. That’s far too much for us to leave to chance. And one of the reasons we need to pay attention to this, is the astounding pace of change. Literally over the past 12 months, we’ve noticed a shift in power at the car companies.
Previously, if radio techies wanted to talk to car guys, we would probably have spoken to someone like this. A systems engineer. He knows how to wire stuff up, and he’s been historically responsible for the dashboard and the radio integration.
But over the past 18 months, the power and the money at the car companies have shifted to these guys – Interaction Designers. They make websites and apps – but they’re also designing digital dashboards. They’re young, digitally native, and they listen to an awful lot of Spotify and Pandora. Their bosses are shouting at them to deliver stuff quickly, so they like to work with apps and technology that’s modern and easy to build in – like Google Maps, Facebook, and Messaging software.Unfortunately, broadcast radio is messy and complicated, and comes with lots of technical baggage like wavebands and frequencies.
The bottom line is that broadcast radio now needs to share its prime real estate in the dashboard with others – MANY others. There’s a “hole in the fence,” allowing new content providers access into “the center stack” – a new term for where the radio used to be. Radio is no longer automatically the dominant option in the car, as automakers as well as the drivers themselves have greater access to content while driving than ever before.Here are some examples:
While the radio industry was consolidating in the ‘90s and trying to get through the recession in the 2000s, the car dashboard was undergoing change. And today, consumers have enormous choice in front of them every time they get behind the wheel.The confluence of the “connected car” and the smartphone is just part of what we’ll talk about today in the changing the reality that was the radio and is now known as the “center stack.”Some of these apps, like Pandora and even iHeartRadio, come built into the head unit of the car. Others, like SiriusXM are available for free for a limited time after purchase. And other “pureplay” content providers from Slacker to Sticher and even to individual radio station apps like Star 94 here in Altanta can be accessed in the car either through the aux in jack or by connecting a smartphone directly into the car’s entertainment system.
Why are the OEMs and their Tier 1 partners spending so much money, time, resources, and effort in this space? It’s a simple explanation that you’ve probably already figured out. Telematics is a huge profit center, and a pathway to reaching Millennials – GenY consumers – who might not otherwise be as excited about cars as older generations of Americans were. This year at CES, Audi America’s CEO talked about how the #2 factor that drives sales of his vehicles is AudiConnect – their “connected car” platform. And in the last four years – the time period that represents Audi’s commitment to this technology, revenue generated from each Audi sold has increased by an average of $10,000.Ford’s VP of Engineering, Hau Thai-Tang told us at CES last year that among their customers driving SYNC enabled vehicles with smartphones, 65% this feature was an important part of their purchase decision. Nearly three-fourths say they would recommend SYNC to their friends.
And our new TS10 survey backs that up. The great news is that AM/FM radio is still the major priority, cementing the peanut butter and jelly relationship that truly is radio and cars. But you should keep in mind that this survey was among members of radio station databases – a sample that’s partial to listening to AM/FM radio. It’s still a strong finding, but you should keep it in perspective.As you can also see, there is a growing desire for connectivity, for these systems. Bluetooth & wireless internet are higher than they were in last year’s study. And also check out what’s going on with satellite and HD radio, and for other options that bring their music, their devices, and their gadgets into the vehicles they drive.
So it seems that those of us in Proper Radio do have an ace up our sleeve – and it’s a big one. This is a radio and TV transmitter at Crystal Palace, in London. It’s 25 miles from my house, but it gives me fantastic digital radio reception in my car. This is our secret weapon.We just heard how people value live, real-time, human-powered radio content. Trying to get millions of one-to-one data connections into moving cars simultaneously over the cell network is impossible, and will be for at least 5-10 years. But those of us in radio have been doing it for decades. The real power, though, comes when you combine broadcast WITH internet. Using transmitters to do the heavy lifting of the audio, alongside a cell connection which is adding visuals and interactivity. But we’ve still got to get the interface right…
…and there are some people experimenting with really beautiful ideas. This is a prototype touch-enabled dashboard interface from a Finnish designer called Mattheus Krenn. He’s working on ways to control things without having to take your eyes off the road. You ‘learn’ how many fingers to use for each gesture, and how far apart they need to be.
But, sadly, the reality of today’s broadcast radio interfaces leaves a little to be desired. Even when they’re line-fitted digital radios. Here’s a snapshot survey we did of three types of radio in popular cars in the UK. Thanks to Sam, from DRUK, for the video. I’d pick out three main issues here.1) It’s really hard to see a single station list, even just for DAB stations, let alone FM and AM. The DAB ones are split out by multiplex. Why?2) The band-scanning seems to take ages (in that case, it took about 25 seconds), and it has to be done manually in most cars. This means new stations are rarely discovered. 3) And on this one, you have to choose your waveband before you can choose your station – or even set your presets. And where are the nice logos and visuals we’ve been seeing on all the connected interfaces?
We really mustn’t got too down about all this. If this were a football match, and it was half time, I’d say it would be one-all, and there’s everything to play for. Those of us in ‘proper radio’ have the content, the brands, the historical listening base, and the transmission network. But the new kids on the block have got the sexy screens, and they’re the ones with the power at the car companies.
So where does all this leave us? What should we do next? I said it was half time, but how long’s the second half? How quickly do we need to turn it round?
In radio, we can be adaptable and inventive when we want to be. From the early experiments of the first pioneers, to the strange and wonderful radio devices which have surfaced ever since – we’ve got some clever people in our industry. And we’ve never needed their inventiveness more than now. Here are my top 4 take-outs from today.
Number 1: Most importantly, we’ve got to talk to the car companies. Remind them how important radio is to their customers. But car companies think globally. They won’t even pick up the phone if we all try to approach them separately. So we have to do it together. One of the by-products of launching Radioplayer in the UK has been that we’re able to act as a point of contact for companies which want to ‘build radio in’. This is a partnership we’ve just finished with Ford – integrating the UK Radioplayer into their Sync-enabled cars, so you can control the app using your voice.This kind of unified approach is going to be critical to our success. Can Radio play as a team?
Number 2: We’ve got to build PROPERLY hybrid car radios. Not ones you have to switch between wavebands – but radios with a single station list, automatic tuning, and great visuals. This is a prototype we built a while ago, fusing FM and IP together in a single interface. Don’t forget – when it comes to cars, those transmitters give us a huge advantage. But you don’t win a match unless you play well all over the pitch – and that means using broadcast, using internet, AND getting the interface right.
3: I’ve already said that unless we speak to the car companies, the radio manufacturers, and the smartphone designers with one voice – they just won’t listen. This is an example of what can happen when you get together and work patiently on something. It’s an API for visual broadcast radio, now BUILT IN to Samsung smartphones. An API is just some techy magic which means someone else has sorted out all the complicated crap, and a third party can just take it and make it work easily with their stuff. Remember those digital guys at the car companies? They want it to be easy.What if we did this for cars? Sort out all the rubbish around switching platforms and frequencies and logos and visuals, bundle it into an API, and offer it to them for free? Lots of great work has already been done by RadioDNS and the Smartphone Radio Project here – and Radioplayer’s working hard on how to build on that for cars.
And finally from me – let’s go on the attack! Imagine what could happen if we stopped being scared of losing listeners in the car, and saw the potential.We’ve already got a huge audience advantage – drivers love great radio. And we know how to make that – we’ve been doing it for decades. Plus we’ve a huge network of huge transmitters. Streaming audio over a mobile connection just doesn’t compare.But what if we got our act together, and came up with that stunning API for in-car radio? They’d be biting our hands off for it. And why aren’t we thinking about the unique opportunity for monetising in-car connected listening? With personalised radio experiences based on your speed, or your location?And great hi-fi quality surround-sound, using those lovely transmitters instead of costly mobile data.
Drive a “connected car.” Buy, lease, rent, or test drive a connected car to experience the modern-day audio infotainment experience complete with the plusses and minuses. It’s important to understand how your audience will be viewing the many in-car options that will be available to them while they drive in the new “connected car” ecosystem.
Attend a “connected car” conference and listen to and speak directly with automotive leaders about the future of our industries. As you saw in our videos, our attendance at events like Telematics Detroit and the Consumer Electronics Show has been time well spent. It is also important to let the OEMs and Tier 1’s know that radio broadcasters are enthused about the space and excited about the possibilities of in-car entertainment. I will give you a reminder of our DASH conference at the end of this presentation.
Develop your mobile strategy with the in-car experience in-mind because for many car makers, especially the mass market OEMS, their connected vehicles use smartphones to link consumers with their audio infotainment. It will be essential that radio companies and individual stations think beyond their market coverage areas and plan for mobile usage of their brands. And the good news is that any station – in Boston or in Boise – can ensure it hassolid presence in the mobile environment.
And we finish with the idea that given all this technology, gadgetry, and electronics, it will come down to content. How your brand stands out. What you offer listeners while they drive. There are many different options, but brands that reflect the local ethos, that have personalities that matter, that provide a sense of companionship and place might be in the best position to be that go to radio stations amidst all this choice. Just having a great app or being part of an umbrella app, just having a great stream, and playing favorites from the 80s, 90s, and today with a hour of commercial free music to start out your workday isn’t going to be enough.We are no longer competing with the stations down the deal. We are competing with everybody.
King of the Car since the 1950s
% using ‘almost all’ or ‘most of’ the time in car, from Edison/Triton ‘Infinite Dial’
The Radio Revenue Story
CATEGORY 2009 2010 2011 2012 2013
Automotive 23% 24% 26% 29% 29%
Communications 22% 22% 19% 18% 22%
TV/Networks/Cable 17% 18% 19% 18% 17%
Restaurants 21% 18% 19% 18% 16%
Financial 17% 18% 17% 17% 16%
% of Total Top 5 Category Spending – Ranking Based on 2013 Expenditures
(Note: Percentages represent share of total top 5 category spending only and not
percentage of total radio revenue)
Automotive 23% 24% 26% 29% 29%
4: Go on the offensive. It’s all to play for
L a r g e a n d l o y a l i n -
c a r a u d i e n c e
We k n o w w h a t ma k e s
l i s t e n e r s t i c k
T r a n s mi t t e r s – s i z e
D O E S ma t t e r !
I n t e r f a c e t o s t u n
A p p l e , G o o g l e , B M W