Hooking up to revenue streams from the connected car

Data is the fuel that powers this hyper-aware automobile. We’re not far past the start of this technology, so what can we expect once it really starts to accelerate?

In order to mould that future, automobile manufacturers would do well to study the way other businesses use data, particularly in sectors that are dependent on it. A good example of this is everyone’s favourite online video store, Netflix.

The company harnesses many types of viewer information to deliver more than just click-and-watch capability — it aims to provide an experience for the user. Viewing history is analysed to provide a set of recommendations for future selections. This makes the company a partner in (and a shaper of) the user’s video-watching activities, rather than just the entity serving up TV episodes and movies. It’s also a powerful tool for analysing the viewing habits and patterns of the company’s many customers throughout the world.

Walt Disney is a sprawling media conglomerate that needs to integrate its operations fairly tightly in order for its business units to operate profitably together. As a result, “The Mouse” is a heavy analyser and processor of data.

One good example of the company putting this to clever use on the consumer side is the Magic Bands it makes available to certain visitors at its theme parks. These wrist bands are loaded with a sensor that allows the wearer to unlock their hotel room door (assuming they’re staying at a Disney facility, of course), check in to the Fast Pass express queues for attractions, and even order a visit from one of the costumed actors playing a popular Disney movie character, among other features.

This enhances and enriches the park experience, as the visitor has the means to conduct a range of activities by simply waving the band at a series of sensors. That eliminates a number of small worries and hassles, allowing the user to more fully enjoy their visit.

As with Netflix, this is a two-way benefit — the Magic Band is, naturally, an excellent tool for determining visitor habits, likes, dislikes, and peculiarities

So, future success for auto makers will depend on their ability, like Netflix or Disney, to deliver an experience rather than a simple motorized box on four wheels.

For example, any car maker can sell you a sedan, but how about one that’s able collect your groceries on the fly? Last year Volvo launched a pilot program, Roam Delivery, a service that will deliver grocery items to a car. The goods are ordered, and since the delivery service is given provisional access to the vehicle, it can open the boot, pop in the bags, then close and lock… done! When the car’s occupants return, they have their groceries loaded and ready to go.

There is a wide variety of potential offerings that can enhance a driver’s experience. Sticking with Volvo, car owners in the more frigid, Sweden-like climates can opt to have the car start early and warm the interior to a specified temperature before the driver enters.

Devising a menu of services to deliver this experience is a challenge, although potential Volvo customers in Southern California, for example, probably won’t be wowed by that pre-heat option.

Another bump in the road for manufacturers to swerve around is collaboration. In the automobile of old, it was almost entirely up to the car maker to devise a feature set to add lustre to its products.

Today, there are many connected car app makers, heaps of broadcast entertainment providers, and scores of traffic/diagnostic information services to choose from. Which is the best for a particular manufacturer, how can these entities best be collaborated with, and how to split the costs and revenue, if, indeed, the chosen service generates any revenue at all?.

Speaking of finances, another set of problems that must be solved is the manufacturer’s relationship with the data generator, i.e. the car’s owner. Data use is a hot topic these days, and there is a growing sense that it should not be given away for free.

How, then, to encourage the flow of potentially sensitive data to and from car maker and driver? A payment model is one option, with the user being compensated either financially or with free in-car services. Another option is to harness the data in a way that benefits the car owner, plus a certain community around him/her – GPS readings could be used in analysis that leads to changes in a city’s traffic regime, for example.

These are exciting times pregnant with potential for car manufacturers. The road ahead isn’t an easy one, however; there are a lot of factors to consider, and much research and testing to be done. The connected car is our future, it’s just a matter of figuring out how best to build and shape it.