These days, the biggest stories from the worlds of business and technology often seem to revolve around our cars. For an industry that was once thought to be rather sedentary – especially compared to consumer electronics – the auto sector has been heating up these past few years. And the implications for radio are enormous. Already this week, three different news stories about cars have captivated the attention of the radio industry – or at least they should.
Here’s the auto trifecta, along with some color commentary about how radio might be impacted.
1. Are car dealerships next for Amazon?
It’s only speculative at this point, but given Amazon’s recent foray into brick and mortar, coupled with its purchase of Whole Foods, you never know.
The source for the story isn’t the Drudge Report or a “fake news” site – it’s Automotive News. In an article titled “Could the Amazon of auto retail be Amazon itself?” writer Katie Burke wonders out loud whether the planet’s largest e-retailer wouldn’t try to capture the car dealership space.
Noting that Amazon has launched its own car buying research site – Amazon Vehicles – Burke reminds us Alexa is already in cars, while Amazon is already selling autos in Italy.
And she reasons that Amazon’s expertise with digital advertising is the perfect entryway into lead generation with special incentives via Amazon Prime. And while building a dealership network would be a daunting task, University of Michigan business professor, Erik Gordon, points out that “when we get to the highest level of what Amazon does, Amazon disrupts.”
Clearly, there’s a pattern of disruption afoot by Jeff Bezos’ innovative company. And if this story has a kernel of truth, it would signal a seismic change beyond the auto industry. Radio could be similarly disrupted because so much of its revenue continues to come from the car dealership category.
2. Saudi Arabian women finally allowed to drive
The surprise story broke this week when the Saudi Foreign ministry issued a royal decree allowing women behind the wheel starting in June of next year.
As Prince Khaled bin Salman pointed out, “This is a historic big day in our kingdom.” Did pressure from equal right activists motivate this decision?
Actually, many observers believe it’s more about economics. Saudi women cannot contribute to a stagnant economy if they can’t drive a car.
But perhaps there’s another potential impact that’s gone unnoticed. For Saudi radio stations, this could end up being a game changer. All these years, women have been confined to the passenger seat. It’s logical to assume the man doing the driving was also controlling the radio.
Given how much radio listening takes place in cars, Saudi female drivers could trigger a ratings shakeup. Next year, Saudi women not only will be able to get behind the wheel, they’ll be able to listen to Adele, Hootie & the Blowfish, Michael Bolton, or whatever they like.
Are you listening Alan Burns, Dan Vallie, and Gary Berkowitz? There’s a consulting opportunity in the kingdom.
3. Tesla nearly creates a radio panic
(Interestingly, The Drive provided the update below at the top of its article, although the story itself has not been corrected. The Verge has not corrected its story, but Tom Taylor did.)
In fact, these new more affordable Tesla’s will come standard with FM radio. But AM will not be available. This can’t be good news for stalwarts like WGN, WJR, and this year’s winner of the Marconi Award for “Legendary Station,” the venerable WCBS-AM in New York. Chairman Pai cannot be happy either.
If this sounds familiar, remember that BMW dumped AM in its i3 and i8 cars, claiming the electric motor created interference problems. In Tesla’s case, you’d like to believe the company working toward facilitating easier space travel and missions to Mars could overcome an AM radio reception issue.
A former Tesla employee remarked the conversation about eliminating broadcast radio has been on-again-off-again at the company for years.
And it’s a reminder that just four years ago, Radio Ink‘s Eric Rhoads jumped on stage at his Convergence conference to question an apparent statement made by Gartner’s Thilo Koslowski panelist that AM/FM radio could be endangered in cars in just a few short years.
This Tesla news suggests the radio industry needs to move full-force toward engendering stronger relationships with the automakers and their Tier One suppliers, as well as ensure its streams are top-notch, and its dashboard displays are state of the art.
Below is the video The Verge ran in the story that fueled this speculation. About a third of the way in, you’ll hear the customer and the alleged Tesla rep discussing whether radio is available in the car.
Not a day goes by without compelling car stories – like these. For the radio industry, the implications are obvious. And it’s more fodder that strongly suggests the paramount importance of automotive to radio’s future.
Jacobs Media has consistently walked the walk in the digital space, providing insights and guidance through its well-read national Techsurveys.
In 2008, jacapps was launched - a mobile apps company that has designed and built more than 1,000 apps for both the Apple and Android platforms. In 2013, the DASH Conference was created - a mashup of radio and automotive, designed to foster better understanding of the "connected car" and its impact.
Along with providing the creative and intellectual direction for the company, Fred consults many of Jacobs Media's commercial and public radio clients, in addition to media brands looking to thrive in the rapidly changing tech environment.