Why Radio Remains Dominant in the Car

As automakers work to align their vehicle connectivity offerings with consumer wants and needs, one connected car expert says radio will retain a prominent position in the digital dashboard. The demographics of new vehicle purchasers are a big reason why. The fastest growing U.S. car buying population segments are middle aged and older consumers, according to Strategy Analytics associate director Roger Lanctot. Both segments have been shown to spend more time with radio than others.

Another reason has to do with the local traffic, news, sports and weather that broadcast radio is known for. “Radio absolutely is the original location-based service,” Lanctot said. “The auto industry is spending billions of dollars to produce what is already there.” Lanctot said it’s tough for anyone to beat local broadcasters when it comes to traffic and other essential community information. “Having that intelligent voice telling you what’s going on – no one has replaced that,” he said. At the same time Lanctot believes there’s no turning back from connected cars. “We can’t put this genie back in the bottle,” he said.

Pierre Bouvard, chief marketing officer for Cumulus Media and Westwood One, said it will be a while before streaming audio becomes a mainstream activity in the car. “Asking about streaming in the car is like asking about FM in the car in 1963,” Bouvard said. “It sounded like a cool idea but another decade had to pass to get the FM radios in the cars and it was easy for consumers to figure out.” Bouvard pointed to Edison Research’s Share of Ear study which showed AM/FM with a 71% share of in car audio listening, followed by Sirius XM (14%), owned music (12%), all streaming (2%) and podcasts (1%).

“You need an electron microscope to see the itty bitty amount of streaming listening actually occurring in the car,” Bouvard said. He noted that 70% of Pandora listening occurs at home, mobile data consumption is a concern, and that in-car audiences often look for “content that makes people laugh, that is informative, and picks people up – all of which is not found on streaming.”

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