US News: Hughes develops transaction-based telematics services

US News:  Hughes develops transaction-based telematics services

Company president Erik Goldman says that while traditional safety and security services, such as automatic crash notification, are not intended to be offered on a pay-per-use basis, there are a host of services that are well suited for a transaction-based model, such as purchasing a song or downloading specific content like an audio book.

"The future of broadband access into the vehicle will redefine the bounds of "telematics" to include a vast array of personalised services," says Goldman."Much like the evolution of today's cellular, video distribution and Internet mediums, we will evolve the mix of pricing strategies and content bundling to meet the needs of the market."

Goldman doesn't believe that a transaction-based service will necessitate a higher cost of service.

"In fact, in many cases, a pay-per-use option becomes a means for a customer to experience a service on an impulse basis for which he wouldn't otherwise justify a subscription."

He points out that the average person probably would not subscribe to a 411 service, but many people pay for this feature on an impulse basis. By the same token, while the average Starbucks customer spends more than $1,200 a year on a daily cup of coffee, it's doubtful that these same people would sign up to pay a $100 monthly coffee subscription.

"The breadth of services offered to consumers in a vehicle will expand considerably by the middle of the next decade, and with that expansion will come new and creative ways to enable customer access," says Goldman."Therefore I see pay-per-use as one of several means of introducing new services and rarely, if ever, cannibalising traditional subscription models."

Although it has been reported that Mercedes-Benz and Chrysler vehicles will employ the Hughes system starting in model-year 2010, Goldman says that the timing of any specific service launch within a particular vehicle line is something that will be announced by the OEMs.

Author: SharonGill, Freelance journalist

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