Car radios have been around since the early 1930s without any real competition from any other medium to entertain drivers while they are commuting. When General Motors started introducing the OnStar system in the 90s, the possibility of alternative forms of entertainment in automobiles saw the day of light. As automobiles introduced more telematics and communication solutions, service providers are finally going after an audience that has been overlooked because of the stronghold radio has had in cars. A new report by ABI Research's Automotive Infotainment Research Service, reveals the global shipment of streaming music enabled automotive infotainment systems will exceed 66 million by the end of 2019, representing close to 93 percent of all connected car infotainment shipments.
As new vehicles come equipped with the hardware to receive on-demand subscription-based services, consumers now have the option of listening to what they want in their cars with many customizations preferences.
According to the report streaming services will face challenges from a defragmented market offering many different solutions from car OEMs and Tier-1 suppliers. Streaming music providers will have to provide applications that will be compatible with many different in-car infotainment platforms. Even though this is a barrier until the industry agrees on set standards, there are many opportunities for monetizing the platform because of the targeted advertising it offers companies.
As advertiser continue to look for better bang for their buck, the impact on traditional radio as well as digital radio standards such as Eureka-147-based DAB/DAB+ standards in Europe and HD Radio in the United States, as well as satellite radio broadcaster SiriusXM will be noticeable.
The battle between different sets of technologies from smartphone-based solutions (Ford SYNC) and fully embedded solutions such as BMW’s ConnectedDrive are also obstacles as app developers and service providers continue to address these issues in this emerging market.
"FM broadcasting still dominates in-car listening today, but it is likely that this will gradually diminish in favor of streamed radio and music services as an increasing number of cars become connected," comments Gareth Owen, principal analyst at ABI Research.
Edited by Cassandra Tucker