The good news is that the music industry is adapting more quickly with each wave of digital disruption. Streaming now accounts for most of the major labels’ revenues and emerging artists are becoming more tech-savvy, leveraging tools from chatbots to CMS to interact directly with their fans and optimize their reach to new ones.
While collaborations between music companies and auto manufacturers have been limited to streaming and live events, it has not fundamentally transformed media consumption on the road.
The wide range of cutting-edge technologies to the in-car media experience, including remote sensing and GPS, image recognition and other consumer-facing applications of robotics and artificial intelligence has freed billions of hours of time from drivers’ hands, which is one of the few examples of how innovation can actually grow the pie of available media consumption time and advertising space.
As a myriad of auto manufacturers and ride-sharing startups are already testing their own self-driving cars, music companies will have to devise new roles and strategies tailored for the unique technological package that accompanies driver-less commutes. Under this new paradigm, music will become not just a service, but also a fundamental automotive function.
How the music industry can understand the impact of driver-less cars on their business models and prepare for the possibilities
1. Autonomous driving will open up more time for focused media consumption and in turn, more revenue for content creators.
Media consumption is traditionally a secondary activity in the car. As safety is a top priority, drivers can only listen to music, podcasts, radio and other audio formats in the background, instead of watching the video directly. Passenger-oriented media is ordinarily limited to mobile devices.
Autonomous vehicles will add both time and money to this on-the-go media landscape.
AVs could free as much as 50 minutes a day for users, who will be able to spend traveling time working, relaxing, or accessing entertainment. The time saved by commuters every day might add up globally to a mind-blowing one billion hours—equivalent to twice the time it took to build the Great Pyramid of Giza. It could also create a large pool of value, potentially generating global digital-media revenues of €5 billion per year for every additional minute people spend on the mobile Internet while in a car according to McKinsey & Company.
As driver-less technology becomes a more and more concrete reality, music companies should start investing in and experimenting with this growing pie of time and money to stay ahead of the curve.
2. Autonomous vehicles are the next must-have connected mobile devices.
Just as the smartphone revolutionized media by centralizing all mobile activity into a single device, autonomous vehicles can house multiple applications and media formats, from music and video to productivity and gaming apps, onto a single, comprehensive dashboard. The car’s new status as a mobile device will also position it as a crucial player in the future of IoT and music companies will have to adapt their content in anticipation of the next wave of in-car streaming, which will become more interactive and even better connected to multiple devices and applications.
A good example would be of that of Ola Play which has not only integrated different platforms in India but is also creating content for in-car streaming exclusively for its commuters.
3. In-car advertisement experiences will become more immersive and more personalized.
The time and space freed up by autonomous driving has the potential to make music a more outwardly visual and physical medium. In fact, the shape of a car provides a natural 360-degree viewing experience, suggesting a lucrative new entry point and distribution channel for virtual and augmented reality as it relates to any media format.
This immersive technology could also make autonomous vehicles a perfect platform for experimentation with context awareness and personalization. Cars and screens will have access to more detailed location and consumption data, allowing for targeted, dynamic media and advertising that is sensitive to the destination and duration of each trip. The financial benefits of this immersion and personalization will inevitably carry over to music since the industry’s financial well-being is so intrinsically tied to the ad market.
Autonomous driving could be one cog in the wheel of the media & entertainment IoT world’s transition from a B2B to B2C model, with media companies interacting directly with their consumers.
4. The in-car entertainment world is becoming noisier so media companies have to hone down on their value while experimenting with pricing and bundling.
Companies across a dizzying array of sectors—music, video, virtual reality, advertising, machine learning—will soon converge within the single device of an automobile, competing for riders’ attention.
Anyone can now watch Netflix more easily on the road which drives consumption hours away from terrestrial radio and other music formats. While radio already boasts a robust listener base and most channels have a long tail of brand loyalty, they will have to adapt to these new technological formats that are largely on-demand, visual and, more notably, differentiated across devices to survive from the new competition in the form of OTT platforms.
As entertainment becomes noisier, consumers may also become even more value-conscious and exercise discretion over how much they would be willing to pay, in either time or money, for new media content. In fact, recent research has shown that car owners have high demand but relatively low willingness to pay for connected features provided by auto manufacturers.
5. Media companies could benefit from joint ventures with tech companies and auto manufacturers.
All of the earliest proponents of connected driver-less technology have forged strategic partnerships to bring their vision to fruition.
Each partner has its own clear rationale for cashing in on the hype. Auto manufacturers are thinking through how they can ensure maximum car sales in the wake of driver-less technology. Ride-sharing startups like Lyft are anticipating changing business models, from providing a ride-sharing program today to building a driver-less network tomorrow. Adjacent tech companies like Google are leveraging their expertise in machine learning and mapping.
In a similar manner, music and entertainment companies should aim to talk and collaborate more with autonomous vehicle manufacturers. As they learned in their quest to master streaming services and over-the-top (OTT) video players, digital disruption becomes your friend when you align with its distributors.
Music companies and publishers need to understand how people are consuming their music and compare it to the way they are distributing it through different channels.
Collaboration between different players can ensure that music companies are where their listenership is and that is what makes all the difference between being relevant or forgotten.