Guest Post: In-Car Internet Radio - new opportunity for telcos?

As part of our regular coverage of innovative new products, here's an introduction to miRoamer's in-car Internet radio. Robert Demian, their head of global sales, is coming over from Australia to our event this week to discuss the opportunity. He describes it here:

miRoamer is an original developer and leader in internet media technologies, specializing in cutting edge media and content streaming. Over the past six years miRoamer has developed new opportunities for the general public to gain global access to digital media. The biggest challenge has been to create a total portable solution.

The development and evolution of In-Car Internet Radio and IPTV brings a new portability to digital media delivery for existing digital content suppliers and traditional terrestrial outlets. The delivery of mainstream and diverse programming is now cost effective and available in-car! This has now been achieved through co-development with the worlds' leading car audio maker. With the Internet Radio-Content market experiencing huge growth, it is ideally suited to the in-car environment.

The most noticeable feature of the changes in radio listening trends over the long term has been the rapid growth of Internet radio. Across a range of countries, Internet radio is the increasingly preferred delivery platform to deliver radio content. As well as opening up a world of new broadcast streams, it provides worldwide access to favourite local stations allowing people to stay tuned where ever they are. Even in their home city, streamed internet radio access improves sound quality and provides interference free reception, something not always available in high rise offices and apartments.

In-Car Listening

In-Car Listening is a big chunk of total listening to radio and had been growing over the last decade, both in the absolute volume of listening and in-car listening's share of total radio listening. Internet Radio will soon be able to join the party when it comes to In- Car radio listening, Energetic internet media platform provider, miRoamer, has linked a deal with a world leading multinational OEM, to show off the 'World first Internet Car Radio" at the upcoming CES in Las Vegas, Nevada (Jan 8-11th).

This means telcos have a big new market in prospect. telcos are in a unique position to provide the necessary wireless connectivity to deliver internet radio to auto-mobiles. And just how big is this market?

In the USA, radio is still the 300 pound media gorilla, with effectively everyone (94% of Adults 18+) using the medium weekly. In-home listening is still where the majority of hours are clocked up, but in-car-listening in the peak drive sessions, mornings and afternoons, Monday to Friday. In-car takes a 43% share of average listening hours at that time.

Official radio rating studies from Nielsen Media from Melbourne, Australia show that the number of people 18+ listening in-car during Morning and Afternoon Drive has risen over 10 years to over 2/3rds of that age group (68.3%) , an incidence that has risen 24% from 1997. In addition, the volume of listening has increased by nearly half (49%) over the same period (2).

Qualitatively, the time spent listening to in-car radio is regarded as the most intense time to enjoy radio content. A UK study noted ... "Most journeys are routine and, particularly in congested traffic, pre-occupy only one part of the brain, allowing the driver to listen intently to radio output." The report also notes a characteristic of in-car listening.... "Radio meets much more intensive needs within the car than in any other situation, spanning the gamut of emotional, mood enhancing/changing, entertainment and information."

The report sheds light on two issues which need to be addressed in the promotion and listener usage of in-car Internet radio. What is station switching behaviour like in car radio listening and who will likely take up in-car Internet radio first?

There are other issues that have yet to be researched, such as the use of user-generated audio entertainment In-Car versus listening to broadcast (and when available) live internet radio. The study by Winstanley Research (UK) showed that despite ease of station channel-surfing using push buttons - which in some cars can be thumb operated from an up or down pre set channel selector on the steering wheel - switching behaviour was much lower than anticipated and is related to the routine of the journey (commuting to and from work in this case).

The study showed that only a minority of respondents switched stations, despite most having their presets set up for easy access to alternative stations. The following top-line findings from the report show that:

  1. 34% of in-car listeners say they never change stations during journeys
  2. despite having nearly 7 presets available on average, less than three are regularly used
  3. "I tend to listen to the same radio stations in the car that I listen to at home." 82% of listeners agreed with this statement
  4. "I am the sort of person who switches stations a lot when driving" - 85% of drivers disagreed with this statement

The Winstanley Research study was conducted in 1997, in the South East of the UK (i.e. London and surrounds) so the dominance of market leaders, Capital FM, BBC Radio 1 and Radio 2 at that time, might exaggerate the paucity of switching. However, as in other radio listening environments, station switching is far less common than practitioners in advertising and marketing, with their innate professional curiosity about all and every media channel, would personally believe, based on their own heightened experience.

"I'd always assumed that most listeners, like me, used car journeys as the ideal opportunity for surfing the airwaves ...The figures show that I'm plain wrong". Dominic Mills, Editorial Director, Haymarket Business Publishing

The market task...

From the point of view of in-car Internet radio, developing the habit of listening to stations on-line from Internet radio streams, especially Internet-only stations, will be the same marketing task and address the same opportunity as that which faces content providers currently.

They will compete against the ease and accessibility of "always on" local broadcast radio stations, but the ease of tuning into Internet radio in the car will enhance it's appeal as it will be even easier than setting up a stream on a computer. If the right consumer benefits are promoted, including the variety of Internet radio, and the proposition is promoted through exposure of the service (especially at CES launch as World first Internet Car radio), the awareness and the demand for the service will increase.

It is similar to a short period, where in the 1970s, OEM car radios were often supplied without the FM option. Even later in the decade, they may have had an AM/FM radio but not yet with the tape player entertainment option. It's also worth noting that the presence of tape players only ever became a subset of in-car listening and did not overwhelm or outpace the volume of listening devoted to in-car radio listening. The same observation can be made about mp3 player adoption in -car ... good to have the option but across the market, not substantially taken up at the expense of radio in the car.

Lessons from the "8-track."

You might argue that the same sideline effect could come to pass in-car Internet radio listening. It is a potential threat, but here's why Internet car radio won't go the way of the 8-track player!

  • It's the easiest access path to Radio, over 10,000 + stations and endless numbers of streams, specialising in the most popular audio entertainment medium.
  • In all cases, it provides superior sound quality, clear and full fidelity stereo and interference- free talk. Internet radio can be delivered with less compression, allowing the In-Car Radio to reproduce to the best acoustic standard possible.
  • It will be free of interference associated with broadcast reception (especially AM) and have world- wide coverage as opposed to just local market transmission of 50 radial kilometres.
  • Internet radio will greatly arouse interest in the medium as it increases the range, variety and choice well beyond the typical radio station repertoire offered locally.

It seems likely that this wider range of content, together with the ease of pre-selecting it on your Internet car radio buttons (along with favourite local stations) will only increase choice and stimulate interest. We know this from on-line radio; there are over 48 million people in the USA alone already using the internet to deliver their own stream of favourite radio and music programming.

miRoamer ...on the move

miRoamer was the first company in the world to develop and commercialise portable Internet radio. The move to develop an in-car-radio solution is the natural progression to create a new paradigm and real starting point for digital media. Now that Internet radio is portable and in-car, the mind bloggles!