Spotify and Pandora's connected cars intrude on radio's safe zone

  • Didge
  • June 4, 2014
  • Damien Venuto
Spotify and Pandora's connected cars intrude on radio's safe zone

When in-car tape and CD players were first released, various analysts predicted the possible demise of the radio industry on account of the fact that people could customise their own playlists to personalise the listening experience. And while the industry managed to survive the tape deck and CD shuttle, the digital age is posing a new threat to radio’s continued dominance of in-car listening.

Recent technological innovations have made it easier than ever before for music lovers to compile playlists and listen to tracks that match their exact mood. Add to this the fact that online streaming makes encyclopaedic catalogues of artists accessible with a few touches of a screen, and the success of online radio services comes as little surprise.

Since entering the Kiwi market two years ago, Spotfiy users have streamed over 2,200 years of music and created in excess of seven million playlists. The platform has obviously kept Kiwis users busy and, somewhat ironically, this is exactly why Kate Vale, the company’s managing director for the Australian and New Zealand markets, thinks that Spotify doesn’t pose a real threat to broadcast radio.

She says that “radio still has a place as a lean-back platform,” which listeners can just flick on whenever they want to listen to something.

This line between the passive and active listener was also drawn by Pandora founder Tim Westergren when he visited New Zealand earlier this year.

“Something like 80 percent of the time people spend listening to music is spent listening to radio,” he said. “Only a small portion is loading in CDs or building a custom playlist. That's a smaller part of the average person's appetite. We're really the place that you want to go to, if you just want to hit a button and have the music come out.”

The Genome project, a complex musicological algorithm that underlies Pandora’s system, enables the music-streaming service to recommend music based on the users first selection—effectively combining the passive and active listening experience.

Since entering the Kiwi market in November, Pandora has already tallied up over 215,000 subscribers, 70 percent of which use mobile devices for listening. And while this has allowed the streaming service to make decent headway into the market, Pandora is now setting its sights on traditional radio’s veritable safe zone.

“Nearly half of all radio listening takes place in the car and we knew early on that to redefine radio, we would need to seamlessly deliver Pandora through in-car entertainment systems,” says Melanie Reece, the New Zealand commercial director for Pandora.

“Pandora has been working with car manufacturers for the past six to seven years to have Pandora as an intuitive feature in the in dashboard. Right now we are in over 130 different car models, across the US and working hard with local companies to integrate this functionality in new models in new Zealand. We are on track to be present in 60 percent of the new cars launching in this country this year.”

In addition to this, Pandora has also penned partnerships with Alpine, Audiovox, Clarion, Dual Electronics, JVC, Kenwood, Pioneer and Sony to produce aftermarket devices that enable Pandora streaming in vehicles. Reece says that there are currently over 270 devices on the market that can be purchased to incorporate in-car streaming.

Spotify is also making a similar charge to become a passenger in Kiwi cars through several of its partnerships.

“Spotify is available via the Ford Sync AppLink system and Volvo's Sensus Connected Touch system, which offers the first fully-integrated in-dashboard, voice-activated music experience for drivers on the road,” says Vale.

“Apple also recently announced Spotify as part of their CarPlay offering, where you can connect your phone to the dashboard of a compatible car and Spotify will show up as an app on the in-dash interface.”

Vale says that “as Spotify evolves” through its radio feature, it will lend itself more to the lean-back experience necessary to be successful in cars.

But in order to provide a quality passive listening experience, Spotify will need to fix a few bugs in its recommendation engine, which has left several online commenters bemused.  

A further encumbrance that comes with online streaming is the cost involved. In contrast to AM and FM transmission, listening to music through the internet is not free. And while Reece admits that online streaming does use up data, she says that the consumption via Pandora is lower than most users think.     

"New Zealanders are keen and aware users of their smartphone data so this is fairly frequently asked question. The short answer is that Pandora consumes around 14 megabytes of data in an hour of streaming—a very compact and efficient use of data. The average listener consumes 10 hours a month over 3/4G and 10 hours a month on connected broadband. So, Pandora in this scenario would utilize about 140 megabytes per month of your data plan."

Despite the prospect of online radio services intruding on traditional radio’s space, Gill Stewart, the general manager of The Radio Bureau, believes that the personalities behind the microphones at nation’s radio stations remain a key point of difference that will ensure the industry’s longevity.

"The personal relationship between listeners, radio brands and personalities remains one of its key strengths. Radio delivers content experiences that have an affinity with audiences, whether this be localised, customised, personalised, and at the right time, for the right reasons. People are social by nature and radio delivers relevant three-way conversations/content between the brand, its listeners and their friends,” she says.

Radio Broadcasters Association chief executive Bill Francis was similarly confident that radio would be able to adapt and maintain its audience.

“Radio is nimble-footed. The ability to move quickly, adapt and change has always been part of radio’s makeup, and it has always been an early adopter of shifts in media. [The industry] has a huge range of content resources, and this makes it responsive to change,” he says.  

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