Content is King!

Entertain me!

With a low hum the seats move back into a leather-covered back wall, creating a relaxing lounge that turns the driver into a passenger. The navigation displays move back as well, to allow for the use of apps or to show movies. A distant mobile utopia? Not at all, for in the near future people will be traveling from A to B this way in driverless cars. And they may be spending a bit more time on the road than today. According to McKinsey we spend an average 50 minutes per day in our cars. Exterior and interior will no longer be the main motivators for buying, leasing or renting, but rather the in-car information and entertainment on offer.

Fight for attention.

The car is becoming a „Third Place“ – of life alongside the home and office. If soon people no longer have to concentrate on traffic in their driverless cars, they will be able to devote their attention to entirely different things. An interesting question is whether automakers will turn into content providers, as competition is well underway as to who will provide content to a potential audience of 1.2 billion people. Third-party providers from the internet, entertainment, advertising and other industries are increasingly vying to get onto the instrument panels of new-generation cars. For good reason because marketers shrewdly see cars as a data-generating touchpoint and thus a continuation of the famous ‘customer journey’. If the car actually fulfils the promise of being a third place, the customer will be giving this place their full attention in future.

Escaping the Faraday cage.

Gone are the days when a driver was only reachable, after closing the car door, through one-way communication via street billboards or their car radio. For quite a while now, vehicle passengers have occupied both the real and the digital worlds. Being linked to the internet is a crucial change, making it easier to send and receive data. Passengers are eager to see what the future holds and open to all forms of entertainment for passing the time on the road. They have been using backseat entertainment systems in the luxury car segment for some time. There is a persistent impression that these systems mainly serve the purpose of keeping things quiet in the back seat after the third cry of 'Are we there yet?'; like some kind of technological Valium for bored kids who continuously want to stop for a break.

The general trend among major manufacturers and suppliers is toward continuous optimization of technological gimmicks for unlimited in-car internet entertainment in the form of audio, video and more. Already now passengers are able to check e-mail, use apps and view their personal newsfeeds and smartphone content via Android Auto, Mirrorlink and Apple Carplay. Usage is now more convenient with larger display sizes, which for a short while have been operable via voice command and gestures.

The quest for content.

Tech giants Alphabet and Apple are leading the way in in-car digital via smartphone interface. But in terms of content, they are only middlemen. Is that the Achilles heel of the business model? Gadgets, apps, social networks and platforms generate data and allow communication. But users are at the same time an audience that demands its “bread and circuses” (from the Roman “panem et circenses” - the idea that all people really want is food and entertainment) be it on the couch at home or in the car. Apple strategists are being secretive as always, though it is well known that the company is looking to launch its own TV and movie content. Recently the first trailer for the show “Planet of the Apps“ aired, about which Eike Kühl, a writer for Die Zeit, has written an interesting review. The company is also pursuing partnerships with Hollywood players with the aim of rolling out on-demand movie rental on iTunes immediately after cinema release.

The Queen buys the king.

The acquisition of Time Warner by AT&T reveals how important content is. The merging of these two giants represents a high water mark in the rush to buy US content producers. Apple flirted with the idea of acquiring the huge media and entertainment enterprise several times in 2016. AT&T has been struggling recently with declining income from its classic business model of transporting content. Included in the Time Warner acquisition are such peaches as HBO, CNN and the legendary Warner Bros Hollywood studio. Is the stage thus set for a big win in in-car distribution?

And why acquire a manufacturer if you can just become one yourself? That’s what happened in a striking case in Asia, where LeEco became the first genuine content provider to move into the car making business. The Chinese company is currently developing a futuristic proprietary electric car called „LeSee“,designed as a mobile cinema, with exclusive access of course to the TV series, movies and music channels owned by the company’s entertainment arm. A fascinating endeavour, though one that will require staying power, considering the uncertain future of projects like Waymo and iCar.

Practical partnerships.

Tectonic shifts in the automotive sector have led to the creation of new business models and the formation of constellations and partnerships that previously were unthinkable. Volvo and Eriksson have jointly developed the bandwidth solution Concept 26 for in-car usage of streaming services like Netflix and Amazon Prime Video in HD quality. Their recipe for success: top-quality proprietary productions and smart purchasing of rights, cooperating with prominent film studios and directors around the world. Why not cooperate with a carmaker too someday? Such partnerships are commonplace in aviation, where autopilot is a long-established standard. The airline Jetblue for example has a partnership deal with Amazon Prime.

Flight passengers can select the movies and TV shows they want to watch and view them on their personal monitor, with free internet access. If you're not a subscriber to the service, you can become one on board with just a few clicks. Content from the magazines VICE and TIME Magazine is available along with streaming SiriusXm Radio. The result: maximum relaxation through an exclusive array of choices. What airlines are already doing today should be possible in the cars of tomorrow with just as much, if not more, success.

Authors: Christian Geiss and Oliver Jesgulke