Digital Automotive – Radio wars

A very American dispute.

• The issue of AM radio in vehicles sold in the USA has been debated for many years, but electrical vehicles (EVs)bring this issue to a head meaning that the most likely outcome is that AM radio becomes an option rather than standard in electrical vehicles.
• Although the relevance of radio broadcasting has declined substantially in most parts of the world, in the USA it remains an important medium by which consumers receive news, information and entertainment.
• I have long thought the main reason for this is that US consumers spend more time in their cars daily than anywhere else and, in the vehicle, radio has long had the best user experience.
• This is because almost all the time the driver is busy driving and when the user gets into the car either the radio automatically starts or it can be accessed by one press of a big round button.
• There is no fiddling around with Bluetooth settings or cables or trying to find the right app as when the car turns on, the radio works.
• Radio is also popular because in a country the size of the USA, local programming is more important and the easiest way to deliver that historically has been through radio broadcast.
• AM radio broadcasts began 118 years ago in the USA and many local radio stations and emergency broadcasts still use it and according to Neilsen, 78m Americans tune into it.
• This is down from 107m in 2016 (roughly a decline of 3.5% annually) which is surprising in the era of smartphones, streaming services and increasingly digitised vehicles meaning that there is a case to keep it in vehicles.
• The problem is that AM radio has issues in EVs because the onboard electrics cause interference in the AM frequency meaning that shielding is required to ensure good reception of AM radio stations.
• According to the automotive industry, this would increase the cost of making EVs by $3.8bn over 7 years explaining why all of the OEMs are keen on following Tesla’s lead and dropping support.
• Tesla dropped support for AM several years ago but the inclusion of the TuneIn app in the head unit means that there is an alternative for anyone who wants to listen to AM radio.
• The user experience will be a little more cumbersome but, crucially, it is still there for those that want it and I would expect that most of the OEMs will try to do something similar.
• However, some are not happy with this compromise and are lobbying to get Congress to mandate the inclusion of an AM receiver in all vehicles using emergency broadcasting as the reason.
• This will only mean that prices of EVs rise even further postponing the time when they can compete head-to-head with petrol vehicles on price.
• Furthermore, given that almost everyone has a smartphone, there are alternatives for emergency broadcasting that did not exist when the emergency radio broadcasting system was first deployed.
• Hence, I think that the best (and most likely) outcome is that AM radio becomes an optional extra in EVs as the case for keeping it is not strong and there is more than one viable alternative for all of its uses.
• Radio broadcast looks set to remain a significant part of how Americans consume content as its decline in the face of easily available alternatives with greater functionality and choice have been unable to accelerate the decline.