iHM: AM/FM Radio Is Still in the Driver’s Seat

Media may like to hype the next “shiny new object,” but a better gauge of what the future holds in terms of in-car audio entertainment is to simply look at what consumers want, according to Radha Subramanyam, President of Insights, Research and Analytics for iHeartMedia

AM/FM radio remains the go-to choice for American consumers when driving -- and by an amazingly large margin.  Today, 84% of consumers listen to regular AM/FM radio in the car, with the next largest music option being CDs at 64% and Sirius XM at 22%.  Almost 75% of all audio time spent in the car is spent listening to AM/FM radio, with Sirius XM next at 14% and owned music at 11%.  All streaming is just 2%.

When asked, 82% of Americans say that the first thing they do when they get into their cars is turn on the radio. A recent IPSOS study estimated that 98% of consumers want an AM/FM radio with their new car purchase -- and an incredible 99% of consumers say they’re comfortable with how AM/FM radio operates in their cars, i.e. with buttons and knobs.

Radha Subramanyam

Subramanyamin MediaVillage writes, "I’m not saying that consumers don’t love other options like apps, because they do, just not instead of radio, or to the degree of radio."

She adds:  A recent J.D. Power survey showed that nine out of ten consumers do not use built-in auto apps regularly a year after they purchase their new car. They also talked about “automakers spending billions on technologies that many consumers don’t use,” with consumers responding that they “did not find it useful” and that it “came as part of a package … I did not want it.”

Consumers have definitely spoken, and digital services are taking notice, stating right up front that they want to be like radio. At this year’s DASH 3.0 conference focusing on “Radio & the Connected Car: A Survival Guide for Radio Broadcasters,” Pandora made it a point to say that it aspires to the simplicity of AM/FM radio.  There’s a natural ease that comes with listening to your favorite broadcast station while driving that simply can’t be matched.

According to Subramanyam, there’s good reason for broadcast radio’s continued popularity. It offers listeners the voices and personalities they know, love and trust. It’s the best friend sitting next to you in the car telling you everything you need to know.  Radio os the original mobile medium if you go back to the core definition of mobile as “on the move,” and it’s also always been a social medium, providing listeners with the opportunity to interact with their favorite on-air personalities long before the invention of social media. Think about the call-in phone lines, which have now morphed into Twitter, Facebook, Instagram, texting and all the other ways that DJs connect to their listeners today.