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Next for NextRadio: cars?

nextradioNextRadio, the Emmis-owned, TagStation-enhanced, FM-chip-powered mobile app that allows radio listening over the air to enabled smartphones, would be in every car if Emmis CEO Jeff Smulyan had his wish. Speaking in yesterday’s earnings call to investors, scheduled during CES week when connected cars were the focus in Vegas, Smulyan and CFO Patrick Walsh focused on NextRadio quite a bit.

NextRadio is available via selected Sprint and Virgin phones that contain the requisite FM receiver chip. As we have noted in the past, FM used to be a standard feature of mobile MP3 players, but was excluded from the Apple iPod specs. Apple left FM out of the iPhone too, so the terrestrial industry has Steve Jobs to thank for cutting FM out of the mobile expectations of users. Emmis is trying to put it back, and during the investor call Smulyan and Walsh introduced the idea of NextRadio built into connected cars.

Wait, what? Don’t cars have radio in them already?

Yes, but NextRadio is different from standard FM reception, or can be when participating stations take advantage of its ability to display album art and deliver real-time interactive features like contests with mobile calls to action.

jeff smulyan b&w“The more interactive the NextRadio experience is the better customers like it,” Smulyan told investors. “And what that means is, if your station comes up on the dial and you see album art, you see a contest, you see other graphical interfaces, you’re more engaged, you listen twice as long.”

All that might be true no matter where the user is located, but Emmis, like everyone else, observes the car’s special status as an environment where most listening occurs. “The major battleground for the American radio industry in the future will be preserving our preeminent place in dashboards,” Smulyan said. “And while there are a lot of streaming alternatives, if we can have a rock-solid terrestrial distribution model in the dashboard of the future that comports with the interactivity that consumers demand, we think that’s a big win.”

All radio groups are worrying about the entertainment stack in new cars, the multiple non-radio choices drivers are turning to, and Pandora’s successful invasion of the auto space. Jeff Smulyan’s theory is that NextRadio can elbow into this competitive cluster as a digital service that matches the personalization and mobile interactivity that consumers now expect — in its own unique ways.

One interesting aspect to radio’s place in the digital car is Clear Channel’s momentum with iHeartRadio, which is racing Pandora for business development deals with automakers. iHeart’s major CES announcement put the radio streaming platform in new models built by Jaguar, Volvo, and Kia. Does iHeartRadio in cars (and TuneIn, too) compete with NextRadio in cars? And does the entire digital cohort compete with good ol’ radio, which remains as the only absolutely ubiquitous listening feature across every car on the road?

Choice is good. There’s nothing wrong with offering drivers alternative interfaces to terrestrial content, just as different platforms offer different interfaces to Internet content. After all, Pandora, Slacker, Spotify, Rdio and all the other streaming services are essentially the same content delivered in different skins, with slightly differing functions.

NextRadio’s biggest hill to climb in cars, it seems to us, is convincing automakers to put that FM chip into the dashboard, in addition to everything else they’re cramming into the stack. Not a problem, according to Jeff Smulyan: “A number of auto manufacturers are looking at the NextRadio model and its interactivity as the ultimate solution for dashboards.”

 

Brad Hill

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