At a time when radio struggles with its role as the red-headed stepchild of the broadcast industry it was refreshing to discover a group of enthusiastic radio marketing executives discussing what the organizers of the event described as the arrival of the fourth golden age of radio. The discussion was occurring at the RAIN (Radio and Internet Newsletter) Summit in connection with the Radio Advertising Bureau event in Washington, DC., this week. Kurt Hanson, CEO of AccuRadio.com and Publisher of RAIN, defined the vision of the fourth golden age of radio as that period following the first (1935-55), second (1960-75 = Top 10, emergence of FM), and third (1976-99, listener fatigue, consolidation). Hanson pointed to Internet radio as a transformative force creating new value for radio advertising and content. For these executives, the hand-wringing regarding the impact (read: threat) of Internet radio is past, replaced by an intensifying embrace of a technology that is transforming the industry. Broadcasters left the event with the newfound conviction that Internet radio was a valuable tool for enhancing their influence and reinforcing their ties to listeners – and the mobile phone and the automobile are increasingly important venues via which to pursue that opportunity. For these broadcasters, the so-called fourth golden age of radio is characterized by the emergence of Internet radio and five aspects defined by the event organizer as: 1.                   Personalization and control manifested in pause, fast forward and thumbs up/thumbs down functionality; 2.                   Variety in the form of thousands of available stations targeted at all forms of regional and genre/sub-genre-based interest; 3.                   Lower spot load – ie. fewer ads – but better targeting of ads – and the corollary of more detailed and accurate metrics; 4.                   Ubiquity – Internet radio is accessible via televisions, mobile phones, standalone radios and, soon, automobiles; 5.                   Global/National reach vs. local – after all, listeners can be anywhere. Internet radio use currently stands at a 3.8% share of radio listening, according to data from Ando Media referenced at the event, representing the equivalent share of radio listening captured by FM radio in 1971. Arbitron data shows the percentage of online radio listening (% who have listened to online radio in the past week) as steady at 17% between 2009 and 2010 (equivalent to 43M listeners). Pandora, the most successful online music provider to date, showed an increase in # of listeners per average quarter hour (AQH) from 257K in January to 366K in July. At the same time the total AQH for the top 20 online radio sources was 780K and the total online radio listening figure was 1.3M. The numbers indicate that Pandora has a 28% share of all online radio listening, according to Hanson, and an overall radio listening market share of 1% - equivalent to 1% of listening in every market in the U.S. The trend, according to Pandora’s own data, continues upward with the number of hours of listening on Pandora growing from 200M in January to 275M in July. And the majority of the increase is coming from mobile users, who now account for more than half of those listening hours. Pandora’s overwhelming brand recognition in the space was reflected both in the listener data and in research presented by Coleman Insights which found Pandora, Slacker and iHeartRadio as the only brands with any significant unaided recognition. The larger message from the Coleman study was that Pandora may have strong recognition but does not yet have a dominant image in the minds of consumers – ie. the market is still fairly fragmented and an open opportunity. The implications for the automotive and mobile device markets come through loud and clear here and in Strategy Analytics’ own data where interest in and usage of Internet radio on mobile devices is on the rise. Not surprisingly, auto makers are seeking to capitalize including front runners BMW, Ford and Mercedes-Benz. Only a year ago, Internet radio in the car was greeted with skepticism and derision for a variety of reasons including: 1.                   Cost – As unlimited data plans begin to disappear, the perception is that Internet radio will become prohibitively expensive to mobile users; 2.                   Network capacity – Cell towers have limited ability to support an unlimited number of data users, which is what Internet radio users are; 3.                   User experience – Capacity and signal issues have created a listening environment carried by drop outs and lost signals. All of these objections have either been resolved or will soon be resolved: 1.                   Cost – Do the math. Taking AT&T’s tiered plan as an example, the $30 for 2.4GB likely represents MUCH more than enough time and bandwidth for all but the most out-of-control mobile listener. Cost is NOT an issue. 2.                   Network capacity – Carriers are adding smaller cells and Wi-Fi access points in major metro areas to alleviate the capacity issues. AT&T complaints have almost (I say “almost.”) completely stopped. 3.                   User experience – There will always be challenges in delivering music consistently, but the creators of these solutions are providing for caching and buffering at the receiving end while broadcasters are filtering content to lower-bandwidth alternatives at the broadcast end. The dominant mode of delivery for Internet radio in the car will be the smartphone in the short term. And with a growing population of smartphones in the marketplace, the opportunity is large and growing. But the concept of an embedded telematics infotainment system with access to Internet radio is no longer anathema in the industry. In fact, the Mercedes-Benz MyComand concept of such an embedded solution shown a year ago at Telematics Munich now looks not only doable but downright prescient. Some bumps in the road remain.  Music service-type Internet radio, such as Pandora and Slacker, will have a user experience advantage over true Internet radio platforms such as RadioTime and vTuner. Because of their personalized nature, Pandora and Slacker will have the advantage of leveraging buffering and caching to preserve the listening experience where cell connections are lost. (Slacker, of course, is primarily a caching-based service and, by definition, won’t lose connection mid-song.) Nevertheless, with carrier network improvements and the transition to LTE technology, the radio aggregators such as RadioTime and vTuner may gain the upperhand by facilitating access to a wider range of content with more creative means to manage and discover new music. RadioTime, for example, has deployed a song search feature able to locate a song being played on any of its participating radio stations. These aggregators also have the advantage of making podcasts and other non-radio content available while also integrating terrestrial sources such as analog AM/FM and HD Radio sources using location data. Competing Radio Platforms It is no coincidence that Sirius XM is making its content available via the Internet. Sirius XM clearly recognizes the competitive threat posed by Internet radio. To respond to the content searching and sorting functions of some Internet radio services and the ability to store or buffer some music, however temporarily, Sirius XM can be expected to bring content management enhancements to its Satellite Radio 2.0 platform due late in 2011. (Sirius XM has raised its subscriber guidance, forecasting 20.1M U.S. subscribers by the end of 2011.) Sirius XM already offers smartphone app functionality already widely deployed by Internet and terrestrial broadcasters. (In fact, much of the talk at RAB revolved around leveraging these apps for advertising and promotional engagement with the listener.) But with the enhancements in satellite radio requiring further hardware investments by OEMs, Sirius XM will have to continue to subsidize its OEM customers. HD Radio will continue to see widening deployment via automotive OEMs, especially since the required hardware investment is substantially less than for satellite radio. According to a recent Twice magazine report HD Radio is built into 5% of new cars sold in the U.S. reflecting deployment by 15 brands on 86 vehicle lines and as standard equipment on 36 car models. There are 2,085 converted stations and 1,226 multicast channels. More than  3M HD systems of all types have been shipped, according to iBiquity Digital, and efforts are underway to see HD Radio technology integrated in handsets. Conclusions The two challenges for OEMs will be to monetize the Internet radio opportunity and to solve the user interface challenge of accessing multiple radio sources safely in a vehicle. From a monetization standpoint, the goal will be to enable users to purchase songs and to enable access to premium content. In addition, the integration of Internet radio into embedded systems will make a powerful and positive contribution to the perceived value of telematics infotainment systems. Smartphone integration continues to advance and a variety of approaches will be tried, no single one of which is likely to dominate. As an example, BMW’s Mini Connect integration reproduces the smartphone display in the instrument cluster, while the solution in the 1 Series lets the driver use the smartphone’s interface. The latter approach is used by Mercedes in its Smart integration product. The bottom line is that Internet radio in the car is much closer to a reality than it appeared just 12 months ago, and it will likely contribute positively to convincing consumers to pay for telematics systems. http://bit.ly/c0OLhT - Consumer Implications for Smartphone-Vehicle Connectivity  - Chris Schreiner - Automotive Consumer Insights http://bit.ly/c1nvTq - Consumer Interest High for Connected Safety and Security Services - Chris Schreiner - Automotive Consumer Insights http://bit.ly/aGJHDj - Smartphone Market Evolution and the Automotive Opportunity Implications -Fitzgerald - Automotive Multimedia & Communications http://bit.ly/bD5RzL - Automotive DMB Digital Radio: Marketing Strategies an Increasing Priority - Blight - Automotive Multimedia & Communications

I have been using TomTom’s XXL 540S World Traveler for the past two months in multiple locations in the U.S. as well as in the U.K., Germany and France and I can safely say this is a dangerous device. It is dangerous because it effectively leverages historic speed profile data to deliver accurate routing and travel time without live traffic data. The XXL 540S is dangerous because the effectiveness of its routing, without accessing live traffic data of any kind, turns the growing traffic data industry on its head. The historic speed profile data calculates routes based on historic speed measurements for every time of day and for every road segment, from large highways to small local roads, and includes TomTom’s IQ Routes technology. In comparison to on-board systems with enhanced traffic data, the routing and time of travel on the TomTom was comparable. I am sure I am not the only user of navigation devices and technologies who has been frustrated with the traffic information experience. I have had both positive and negative outcomes and, in spite of the negatives, I am still a believer in the power and necessity of traffic information. I recently steered clear of purchasing an opening price point PND for the very reason that it lacked traffic information. But sometimes, one is willing to accept sacrifices to achieve a greater good. In this case, that greater good is a single device for automotive navigation in North America and Europe. The sacrifice of traffic data is a small price to pay especially considering what the cost of adding traffic information for both geographies would likely represent in added subscription fees covering multiple suppliers. (Hint: The first traffic supplier with a universal solution will gain a huge advantage.) For anyone seeking a single device for vehicle navigation in North America and Europe with built-in traffic camera data and 7M POIs, the XXL 540S is ideal. (The device was even able to locate a runner’s specialty store buried in a mall in Sindelfingen, Germany, as well as functioning in a pedestrian mode trying to locate the next nearest towns in the French countryside outside Geneva.) On the downside, a shortcoming of the device is its rigid programming. It is not possible to use it as one would Google maps to pick a starting point and destination unrelated to a current location, for example. A more flexible solution will be necessary as user expectations change. If PNDs like the XXL 540S cannot offer functional equivalence to other navigation solutions, consumers will be disappointed. Switching between maps is also less than intuitive. But I can understand TomTom’s disinclination to add yet another layer to its busy user interface. When entering a destination for a new geography, the user eventually has the option to change the map. The device stores prior routes separately for each different map, which is a nice touch. In addition, the integration of user evaluations so widely available in competing connected solutions certainly pose a threat to disconnected PNDs like the TomTom device. But as a single function device, the XXL 540S delivers in spite of the missing traffic info and connectivity.. For the XXL 540S World Traveler the combination of on-board data and the access to software updates perfectly substitutes for a more robust offering of regionalized live traffic information. More importantly, the device points the way toward future product development at TomTom and other PND makers. The pocketable device (yes, even with a five-inch display) is convenient enough for world travel and amazingly, the user will make no sacrifices in POI content or even map updates – additional POIs can be added via the Home application. The device connects to the TomTom Home software application for map updates and other enhancements. Flash has clearly displaced the HDD as the preferred storage medium for PNDs and the XXL 540S has 4GB of storage. At $299.99 retail (a little pricy) the device also includes TomTom’s “Help Me!” button and lane guidance. The TomTom even showed a roundabout where the on-board system against which it was being compared only showed a standard intersection. Of course, with the map update capability, the TomTom should always have superior map data. Even as PND makers experiment with larger screens, as in the case of the XXL 540S, the devices themselves will get smaller and prices will continue to fall. Connectivity and more creative deployment of location-aware applications will be critical to the future success of the segment. Additional Insights: http://bit.ly/cMw4f1 Solid Q4 for PNDs, but ‘Free’ Navigation is Shaking Up Monetization (AMCS) – Canali http://bit.ly/a8WqRJ - A Role for PNDs…If They Get Connected - Blight http://bit.ly/c5f65I - Automotive and Portable Navigation Market Forecast 2008-2016 (AMCS) - Blight

It is very strange indeed to find Toyota at the focal point of a vehicle recall imbroglio after years of immaculate quality ratings and at the peak of its global market share. But the strangeness of the timing is even more severe than that, because it was Toyota’s Prius that was used by QNX and Alcatel-Lucent to promote their “ng connect” LTE Car initiative late last year. The Toyota Prius became the mascot for the ng connect program, popping up in Detroit, Los Angeles, New York, Washington, D.C., and Las Vegas, in fact anywhere cars or automotive technology were on display. The purpose of the ng connect tour was to spread the word about the onset of 4G LTE technology and what it will mean for connected cars. Of course, the tour was also a showcase for QNX’s vision of both on-board and connected applications. Chief among the roster of on-board applications was a so-called Virtual Mechanic. The virtual mechanic is intended to provide live in-vehicle status reports on a wide range of vehicle systems including brakes, transmission, fuel, etc. with text and graphics. QNX is already the enabling software behind OnStar which, like Ford’s Vehicle Health Report feature, provide drivers with emailed status reports. The difference with virtual mechanic is that the information is live and delivered inside the vehicle. For QNX, the virtual mechanic was merely a concept shown in the context of a wide range of other concepts including in-vehicle displays of remote traffic cameras, access to Internet radio (Pandora), and a host of other location-aware and entertainment oriented applications. But the plot thickens with the emergence of Toyota’s recall nightmare because QNX is a supplier to both GM and Toyota. The virtual mechanic concept appears to belong to QNX, but the possibility for GM or Toyota to adapt the technology for their own marketing and customer relations purposes changes the prospects for this technology considerably. The question now is which manufacturer, Toyota or GM, will be first to enable a virtual mechanic-type application in the car. Or could some other QNX customer leap to the front of the queue: BMW, Peugeot, Mercedes Benz, Chrysler, Hyundai? Any one of these companies can look at Toyota’s difficult situation and realize they could be the next car company with software-laden cars producing unexplained, and seemingly unfixable, failures. A challenge for both Toyota and GM in implementing QNX's virtual mechanic will be the limited number of cars both companies sell with full-screen navigation sufficient to graphically display on-board systems. But LCD attach rates are improving for all OEMs in all segments and this application is yet another justification for large display fitment. Suffice it to say that the virtual mechanic is a concept that has arrived just in time to offer a way forward for a damaged auto maker and possibly for the entire industry. Whether QNX’s customers view this prospect from the same perspective remains to be seen. A final note: In this analyst’s opinion, the virtual mechanic will also make a great customer demonstration for car dealers. Source:  Strategy Analytics

Audi's announcement of an optional Google Earth-enabled navigation system for the 2011 A8 due in mid-2010 has raised a question for competitors: To 3G or NOT to 3G? Having just put a messy transition from analog to digital technology in the rearview mirror, the automotive industry is facing yet another key point of inflection between 2.5G, 3G and 4G wireless technologies for embedded telematics solutions. Several automakers have already taken some preliminary decisions leading down the 2.5G path for their future telematics platforms focusing on safety and security. The belief is that additional functionality can be handled via the customer’s smartphone – and that the primary function of automotive telematics remains automatic crash notification and, perhaps, navigation. Some OEMs are targeting the wider spectrum of location-based applications with their related revenue opportunities enabled by 3G technology. And QNX and Alcatel-Lucent have partnered to prepare the market for a 4G LTE future. It is worth noting that QNX is a strategic partner with Audi as is Elektrobit, both of whom are developing cloud-based, location-based solutions for cars. Big decisions await the industry in 2010. Car makers will want to avoid the cost of a 3G module. They will also want to avoid the cost of data plans, hoping to tag along on the customer's data plan via a physical or Bluetooth connection to the smartphone. This strategy will work in the short term, but Audi is one OEM pointing the way to a 3G future with its announcement of a Google Earth-enabled navigation system for the 2011 A8. Initially built around a GPRS/EDGE platform, the car maker has announced its intention to bring UMTS on board. This decision will put Audi into the telematics forefront where it can be expected to be joined by Mercedesand BMW. The key to success will be leveraging location-based technology to deliver a superior value proposition to the driver. With 3G, the full spectrum of content and services and related business models will be at the company's disposal and not dependent on the capabilities of the customer's smartphone or a flaky Bluetooth connection, though Bluetooth will have a role to play. Ford will have the sexiest solutions at next week's CES event in Vegas, but Audi has served notice that it is stepping into the telematics ring and will be a contender. By this time in 2010, the luxury segment may have a new technology leader.

Internet radio is a web based delivery of audio entertainment that is offered in two basic forms. In the first form, terrestrial and satellite radio stations stream live content or pre-recorded podcasts via the Internet. The second form is comprised by dedicated internet radio stations such as Pandora, Slacker and Last.FM which offer individualized, custom content based on listener input. The automotive digital radio market is ripe for applications that enable internet radio listening in the vehicle – though technical and business model hurdles remain. Safe vehicle-device interface solutions present product opportunities for automotive OEMs, not just for radio but also device based music file management. An automotive interfaced app for radio content does present opportunities, but there needs to be careful examination and identification of exactly how consumers use radio content, and how consumer radio listening habits are developing in the iPod/iPhone/Smartphone market across various market leading devices. Only then can an effective in-vehicle radio app be designed. Internet radio is one application within the in-vehicle infotainment mix that will have the app price plan managed by the consumers’ smartphone or internet enabled device and the accompanying dataplan - and not with the OEM car maker. The car maker could charge for the optional vehicle-device connection feature and avoid a subscription based pricing model. · Cellular data plan pricing will need to reflect the consumer’s willingness to pay – internet radio via cellular is not free. · It is important for app store owners to provide the right balance between free content as an enticement for consumers to buy from the stores, and paid-for content to realize revenue. A simplified app purchasing process, such as that perfected by the Apple App Store, is critical to the launch and overall success of an app store. Internet radio adoption in mainstream automotive markets is very unlikely before 2012. Though internet radio can be listened to in the car using a smartphone and Bluetooth A2DP vehicle-device connectivity, no purpose built OEM automotive internet radio solution with an integrated HMI exists. · May 2009 - Pandora announced that it is working with Ford to implement its internet radio technology with the Sync platform. · June 2009 – Pandora announced that it is working with automotive operating system and middleware supplier, QNX, to bring its internet radio solution to the automotive market. · Cellular network bandwidth limits are strained by streaming content such as internet radio. 4G solutions such as LTE and WiMax do not have adequate network coverage to be a viable solution for the automotive market. This blog summarizes the recent Strategy Analytics insight “Automotive Internet Radio far From Prime Time” that can be found at the following link: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5086