As long as people have cars and as long as they have to drive from home to work and back (or go elsewhere) car radios won’t die. Correct? No…wrong. Car radios are slowly inching towards their death.

My car radio lost the battle a few weeks back. Soon enough your car radio will also lose the battle to your smartphone & your music collection. Just like the way our cameras lost out to our smartphone.

Car Radios: Some background

Music has been in cars since 1930s. Interestingly, Motorola (yes, the same Motorola!) built the first car radio and went to to sell millions of them. Ironic, isn’t it that later the same company would make smartphones – the very device that will go on and replace its very first innovation – a car radio.

With time the radio ‘templatized’ its offering. Over the last 80 plus years the radio has been offering three things:

– Music
– News
– Local information such as weather, traffic etc

A Car radio user can also get these three things at his home (or if he is lucky in his office as well). So the purpose of the Car radio has always been to consume music, news and local information “on the go.”

Why are car radios going to die?

– Now-a-days most cars come with Bluetooth connectivity/ auxiliary cable slot which helps connect a smart phone to the car’s sound system
– Consumption of News is through the various news apps on the smartphone
– Local information is in the first screen of the smartphone itself. With ‘Google Now’ even traffic/travel updates appear as notifications
– The only thing that hasn’t changed is the need for ‘on the go’ Music
– Unfortunately for the Car Radio, there are some good alternatives for ‘on the go’ Music as well…such as Spotify, Pandora, Saavn, etc. Not to mention user’s own music collection.
– Many of these alternatives to ‘on the go’ music are coming pre-installed in new cars getting out of the factory

How long before car radios die?

car radioFor some time now we have stopped buying radios. When was the last time you bought a radio? If you ask me…I think we are happy with radios that come integrated with our mobiles, tablets, CD players, cars etc. In fact, cars are the last bastions of the radios.

Past research shows that more than half of radio listening happens inside the car. With the car radio losing the battle to your smartphone & music collection, I expect the percentage of radio listeners inside cars to come down. There is no trusted data to rely on yet, so it is still a gut feel.

My guess is that this reduction in car radio listening has only started, for it hasn’t yet started reflecting in the business of Radio stations – at least, not in India. In fact, Radio Mirchi’s net profit & revenue touched a new high in 2013 ending quarter. For the uninitiated, Radio Mirchi is one of the leading FM radio station in India. Same was the story with all other FM radio stations.

I expect the tremors of this decline in car radio listening to be felt over the next 24 months.

Factors pulling in different directions

Anti: Today the FM radio stations are flourishing because every brand wants to be advertising on it. With users moving to their own music collections & music apps on their smartphones the advertisers will also move. One thing that will hasten this advertiser move will be the fact that on music apps (both on smartphones & those integrated with the cars) they will be able to show audio-visual ads, as compared to the audio ads on a radio.

Pro: I am not sure how easy it will be to dislodge the 45+ age demographic, who are bound to be hardcore radio lovers. They may prefer to continue with the technology they grew up with and get their daily music, news & local fix from radios. This will continue to remain a strong user base for radios.

Pro: Some radio channels have built mobile apps for their radio stations, which are doing well. If these apps succeed, car radio may still be alive just that the medium may have changed.

Whatever is the case, car radio as we know it today is going to die. I don’t want to see it suffer. What do you think?