Telematics just may be the most interesting new distribution vehicle for news that you've never heard of.
That's because news makes up only a small slice of the cool -- if pricey -- features you'll find in the telematics systems now showing up in dozens of car models.
First, let's define the gangly little term. Telematics is a computerized system in a vehicle that connects you to services or content based on your location -- current traffic conditions on the stretch of highway up ahead, for example, or a list of restaurants within a square mile.
Dashboard computing now comes in 2.5 million of the 220 million cars on the road in the United States.
But analysts say it's catching on fast and coming soon to a car near you.
"We're just now getting out of the pioneering stages and getting into the market takeoff stage," says Phil Magney, principal analyst for the Telematics Research Group in Minnetonka, Minn. By 2007, the firm estimates, 42 percent of new cars sold in this country will come equipped with telematics devices.
Telematics features generally fall into four main buckets:
- Safety and security, including an automatic distress signal if your car crashes.
- Vehicle diagnostics, including a remote maintenance gizmo that tells you what's happening under the hood -- a pretty handy feature if you're out in the boonies.
- Communications, including e-mail, SMS messaging and hands-free cell phones.
- Content, including news, weather, sports and eventually streaming video.
Unhappily for the news industry, that last bucket seems to be the least compelling for motorists and passengers, at least over the near term, according to telematics experts.
Still, for busy professionals, news junkies and office workers who want to stay on top of things during their daily commute, it's a nice added attraction. And for new organizations, it presents a new market niche that could show serious growth in the years ahead.
Voice commands to access news on demand
Here's how it works: When subscribing to a telematics service, you create a personal profile, customizing your news by picking from a choice of news vendors and channels. General Motors' popular OnStar, the goliath of the industry, offers a lineup that features ABC News, CNN Radio, the Wall Street Journal, ESPN, Sporting News Radio, Fidelity Investments, the Weather Channel and Tele Atlas, which provides traffic data.
Inside the vehicle, you press a button to turn on the service and issue a voice command, as in "Get my news."
Your choices include headline news, world news, national news, top business story. It lets you track your stock portfolio or follow your favorite sport or sports team. And it will fetch the current weather in your town or location -- and tell you whether you're heading smack into the jaws of a tornado.
Newscasts begin on demand -- no more tuning in halfway through a news item -- and are updated throughout the day. The news provider either records an audio report directly or has its Web news site articles read by OnStar partner General Magic.
The Wall Street Journal, for example, licenses to OnStar "The WSJ Hourly Business Report," "The WSJ Hourly Markets Report" and two other audio programs. All are produced by the WSJ/DJ radio group, which also serves a network of radio stations with hourly business newscasts and other features.
"The radio group's production studios are fully digital, so packaging slices of their work into a format for other media is minimal work," says Neil Budde, publisher of The Wall Street Journal Online. "I happen to believe that audio is a great way to get your news on any mobile device. I'd personally love to have about 45 minutes of Journal summary loaded into my car every night for play while I drive to work."
Safety and security top motorists' wish lists
If you drive a telematics-equipped car in this country, chances are it's part of GM's OnStar service, which controls 80 percent of the market and is signing up about 5,000 new subscribers a day.
Telematics is now an option in 36 out of 54 GM models. It's also available on certain models of Acura, BMW, Ford, Isuzu, Lexus, Mercedes and Subaru. Volkswagen, Audi and Infiniti all announced recently that they would get into the game with their 2003 models.
While a handful of services are working overtime to put together content packages for commuters, research suggests that on-demand news, sports and weather fall at the bottom of telematics features people would be willing to pay for. A study by research firm Gartner G2 found that only 2 percent of consumers expressed interest in enhanced news and content services for their vehicles.
If on-demand dashboard news isn't the killer app, what new services do U.S. motorists want in their cars?
"Customers tell us that security, safety and peace of mind are at the top of their wish lists," says Terry Sullivan, vice president of communications for OnStar.
Say you're in a serious accident on a remote highway. If an airbag is deployed, the system sends an alert to the telematics service provider. An operator calls your vehicle to make sure you're all right. If no one answers, they dispatch an emergency service -- which knows exactly where you are because of signals sent by your car's Global Positioning System receiver to a satellite linkup.
Or say your GPS-equipped car gets stolen. The police can zero in on the hapless car thief within minutes. (OnStar posts a page recounting these happy little endings here.)
Lost? Telematics is there for you, guiding you to the right route, nearest gas station, ATM or restaurant.
Frustrated by your morning commute? Telematics can scope out artery-choked highways and guide you down the path of least traffic resistance.
Lock your keys in the car? Instead of calling a mechanic or tow service, just dial up your telematics service to pop open the locks instantly.
In search of the Holy Grail
Thilo Koslowski, lead automotive analyst for research company Gartner G2 in San Jose, Calif., moderated a panel earlier this month at the Telematics 2002 conference in Detroit, where participants wrung their hands over how to get broader adoption of the telematics services.
"Everyone's trying to find the Holy Grail of what services consumers want to access in their cars," he says. "Contrary to some early assumptions, it's not the same things that people need when they get in front of their computer."
Koslowski, who has driven telematics-equipped cars, has found the experience to be both engaging and frustrating. The first time he tried to contact OnStar's concierge service to make a restaurant reservation, he was on hold for 20 minutes.
"These services don't scale very well," Koslowski says. "But more fundamentally, consumers don't see the value proposition. Do you really need to access your stock portfolio while you're driving? The monthly fees for telematics can add up."
OnStar, which generally gives away the first year of telematics service for free with a new vehicle, charges $16.95 to $69.95 per month, depending on the level of service.
Since mid-2001, OnStar customers have been able to use voice commands for its look-ma-no-hands telephone service. Each month OnStar gets 200,000 queries for directions, 15,000 door unlocks,14,250 roadside dispatches, 500 airbag deployments and 375 requests to track stolen vehicles, says communications manager Robert Herta.
OnStar isn't the only game in town. Other major telematics service providers include Wingcast, a new player in San Diego that's owned by Ford and Quaalcom; Response Services, owned by AAA, in Columbia, Maryland; ATX Technologies, an independent company in Irving, Texas; Cross Country Automotive Services, another indie, in Boston; and MobileAria, a startup in Mountain View, Calif.
Across the sea, different priorities
While U.S. motorists want safety and security in their telematics services, drivers abroad have other priorities. "In Europe, travel-related content seems to be important," Magney says. "In Japan, traffic and navigation top the list."
News and content, especially point-of-interest information like nearby restaurants, attract some consumer interest everywhere, he says.
In Europe, major telematics players include Germany's Tegaron, owned by Daimler Chrysler; Vodafone Passo, also in Germany, owned by Vodafone; and Fiat's Connect.
In Great Britain, for instance, Fiat partners with CNN for news, Trafficmaster for UK traffic updates; Time Out for entertainment and leisure events; Michelin for restaurant, hotel and tourist information; OAG for flight timetables and reservations; Europ Assistance for emergency roadside rescue; and Targa Assistance for medical assistance.
In Japan, where fewer than 40,000 cars come equipped with telematics, providers include Toyota's Monet system, Honda Inter-Navi, Mazda Telematics Center and Nissan's Car Wings. In addition to the car makers, Sony offers a MobileLink GPS-based navigation and traffic information system.
Systems will become more sophisticated and useful
Koslowski thinks telematics will gain ground as the technology becomes more widespread and powerful. He says we're seeing the emergence of second-generation platforms that have a more sophisticated user interface, functionalities, voice recognition and more robust processing power.
Magney sees a generational difference, with younger people concerned less about safety and security than with being connected and plugged into their information devices.
As news technologies mature and media companies cater to mobile news consumers with location-based services, those kinds of offerings can be readily transferred to the GPS-based telematics platform.
Shopping for a new house? A telematics service could easily tap into a Realtors database or a newspaper's classifieds database, look up listings in your price range and map out a house-hunting route, telling you where to turn and when you've arrived.
Like to hit yard sales? Imagine if your local newspaper geocoded them so that your car could steer you from one front yard to the next without your ever having to glance at a map.
Visting from out of town? Your dashboard computer could take you on a guided tour, pointing out landmarks along the way.
Feel like dancing after dining out? Instead of fumbling with a palm device (if you happen to have one), you can let your dashboard scope out the nearest options and suggest the fastest route.
A few years out, it's likely that news and content on telematics services will bear little resemblance to today's modest offerings. We'll also see better integration and synchronization between telematics systems and handheld devices, so that the two can share knowledge.
Keep in mind that telematics-equipped cars aren't the end of the story. The trucking industry has embraced the technology as fleet owners track the exact location of their shipments. (A trucker newscast, anyone?) Telematics has begun making modest inroads into boats, trains and planes.
Telematics also isn't the only option available to consumers of mobile news and programming. XM Satellite Radio and Sirius Satellite Radio provide digital feeds with more than 100 channels of music, talk and news, such as NPR and BBC Radio News. Voice portals like TellMe -- a wireless service that supplies news headlines, weather reports, stock quotes, movie reviews and sports scores -- dot the landscape. But none of these are telematics services because they're not tied to the car's GPS location-sensing device.
We'll likely see more partnerships struck between telematics providers and news organizations as telematics becomes ubiquitous. "We're continuing to look at content partners, particularly those that understand what content holds most relevance to our customers," says OnStar's Sullivan.
As for this Acura-driving road warrior: Internet access? Checking my e-mail while I'm driving? No, thank you. The last thing I want in my car is to be slammed with spam. We're talking potential road rage here.
But would I pay a modest subscription fee to hear NPR's "Morning Edition" or "All Things Considered" on demand? You bet. Would I pay a modest fee for a well conceived, truly personalized hourly news package? Probably. Would I like to drive a smart car that can chart out a time-saving itinerary for my yard sale forays? You bet.
Let's see where telematics takes us when it grows up.