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‘No One Has Figured It Out’

Analyst Roger Lanctot says radio has the chance to help redefine the user experience

Roger Lanctot. ‘Don’t worry about Pandora. Improve access to your own content on these emerging platforms.’ Frightened by changes in the car dashboard? Lots of radio people are. Roger Lanctot has some words of comfort: “It’s early days. No one has figured it out.”

He works for Strategy Analytics. He’s an automotive technology analyst who spends much of his time talking about infotainment products, operating systems, user interfaces and telematics — the “fizz” stuff that nowadays is such an important part of car buying.

So he keeps an eye on products and companies like OnStar, SiriusXM, iHeartRadio, Aha and TuneIn; and he thinks about the evolution of the “center stack” in the car. I called him for perspective on the question of radio’s future in that environment.

Hoping for payoff

Lanctot readily grants that these are painful times for U.S. radio business people.

“You’re investing in HD and crossing your fingers on the payoff. You’re investing in streaming your content, and that’s costing you a fortune, with an unclear payoff down the road. You’re having to pay attention to all these mobile platforms and operating systems, and everyone’s telling you that mobile advertising is going to be a big deal, but it’s not right now.”

But he tells radio that there is power in being the incumbent. While new entrants scrabble to figure out a dashboard business model, radio already is there, with a strong presence in minds of “strapped in” listeners. Radio is free. And consumers continue to expect it, at least for now.

Also, streamed content may be attractive but it costs a lot to deliver; that reality won’t go away soon. And Lanctot is encouraged by developments on the wireless carrier side: “I’ve seen the ‘green shoots’ of FM on handsets; and the fact that this is happening at all is significant.” FM in phones is an issue that crosses into automotive, since smartphones so often are the portal to Internet listening there.

Lanctot reminds traditional broadcasters of a core strength: their local infrastructure.

“The mobile advertising experience is in its earliest stages. What they’re trying to enable is a location-based experience, [but] radio has always been a location-based experience.” So while satellite and Pandora try to succeed with monolithic national content, stations with local towers enjoy an advantage by providing localized content.

Notably, he adds, user interfaces on emerging technologies arrive with their own challenges. They are new and confusing; they are dependent on wireless connections that may or may not work.

“There’s a little bit of disarray and fragmentation on the IP side,” Lanctot said.

‘Fragmented mess’

This question of the “user experience” is important; broadcasters who want to thrive in the automobile need to understand the interface discussion.

Radio, Lanctot says, was always easy to use. Everyone understood a radio dial. “But we’re moving into a world of electronic programming guides, like those on the TV. What was normally associated with a ‘lean back’ experience is coming to the ‘lean forward’ driving experience.”

What will that interface look like, ultimately? How will content providers control, contribute or promote certain activities? Should they deliver via IP or regular broadcast signals? Should a broadcaster partner with an organization like Aha or TuneIn or iHeartRadio? Or should stations stand alone? If they choose that path, how will they be discovered? If they work with a partner, how can they be discovered?

“We’re just beginning to leave the shore for the different ways of delivering that broadcast signal,” Lanctot said. But broadcasters do have a voice in shaping the outcome.

Technology suppliers are working to standardize how consumers find content; for instance Lanctot senses that HD Radio developer iBiquity Digital is pushing to standardize how multicast stations appear on platforms like Cadillac Cue. Watch too for more emphasis on “contextual advertising,” ads that consumers opt into and that are relevant to them.

But radio must understand the new layers of interaction drivers are having with content via electronic program guides such as on TuneIn.

“We’re just beginning to think about ‘searching for things on the radio,’ whether it’s regular or IP content,” he said. Solutions like Stitcher and Aha provide for a search engine or front end to find localized information or a particular song or artist. Control of such offerings may be via touchscreen, steering wheel controls, someday maybe heads up display. “It’s almost a content management experience for broadcast content.”

Radio must think not just about linear delivery of a broadcast stream but about how it will appear on these services, and how to flag content so it can be tapped in a non-linear way, including access to podcasts and time-shifted content.

By some arguments there’s no need for a radio in the car (Lanctot’s son told him after buying a stripped down Impala, “Dad, all I need is an Aux jack and a phone”). Lanctot says yes, such conversations have come up among carmakers and audio companies. Anything is possible in an age when manufacturers are exploring electric vehicles, three-wheel vehicles, self-driving vehicles.

But Lanctot doesn’t see that outcome as likely. The car user interface is a special instance, he says, because of the safety issues. Meanwhile free broadcasting remains a key source of emergency information and, increasingly, critical data services. (If anything, he feels satellite faces a bigger threat in the dash. “There are carmakers that are saying, ‘Look, take that satellite content and send it over an IP stream, because we want to get rid of that box. It’s not doing anything for us.’ Whereas the cost of an AM/FM tuner is pennies.”)

He summarized the challenge for radio as “how to get its local content to all possible locations where listeners may want to find it based on their preferences, in a profitable way that’s easy to understand and to use.”

It’s a big job. But broadcasters have the opportunity to participate in redefining this key user experience. And they aren’t alone in trying to figure all this out.

“The car makers are having the same trouble with Windows 8 and Android and BlackBerry and enabling all those devices to work in cars,” Lanctot points out. “These are multimillion-dollar investments in hardware, testing and focus groups.”

The car is a critical listening platform, he concludes. “It’s a huge fragmented mess right now. Anyone who thinks, ‘It’s too late, I’ve screwed it up, everyone’s using Pandora…’ No. Pandora has its own problems. Don’t worry about Pandora. Improve access to your own content on these emerging platforms.”

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This is one in a series about radio’s future in the car dashboard. Read more.