Automakers are rushing to add Internet radio apps such as Pandora, iHeartRadio, Spotify and Aha to their infotainment systems.
Although Internet radio trails its more established rivals, it has gained a foothold among motorists, according to a February survey by Arbitron Inc. and Edison Research.
Twelve percent of respondents said they have listened to Internet radio in their vehicles. That compares with 15 percent for satellite radio, 63 percent for CDs and 84 percent for AM/FM radio.
But automakers appear eager to add Internet radio, and the nation's radio stations are fueling the trend by streaming content on the Web.
"This is one of the hottest topics in the radio business," said Ed Cohen, Arbitron's vice president of measurement innovation. "It's like the Wild West. It's way too early to declare a winner."
Pandora has a clear lead in the Internet radio race. According to the Arbitron/Edison Research survey, 47 percent of smartphone owners have downloaded the Pandora app, 15 percent downloaded iHeartRadio, 6 percent Spotify and 5 percent Aha.
Smartphones receive Pandora's signal from the Net and channel it to the vehicle's infotainment system.
In addition, some automakers include Pandora's app in infotainment systems, so motorists can use the cockpit controls to select Pandora stations.
Twenty-three car brands have integrated Pandora into their infotainment systems. Pandora boasts that through June it had 71.1 million active listeners on all devices.
Pandora offers a choice of free service with commercials or a commercial- free service for $3.99 a month.
The company built its listening audience, which attracted automakers eager to accommodate those listeners.
Harman International's Aha Mobile Inc. -- which offers 30,000 stations featuring music, talk shows, news and comedy -- has taken a different approach.
"We're a little bit like cable TV," said Rod MacKenzie, vice president of automotive business development. "We are not the branded content; we are trying to be the pipe that brings it into the car."
MacKenzie said his company acts as an umbrella for a variety of infotainment apps, then updates them as needed. This frees automakers from having to handle software updates and motorists from having to visit dealerships to get those updates.
Aha also can help automakers analyze vehicle and customer data to determine what motorists listen to and when, MacKenzie said.
Automakers could use that information to design apps and services that would appeal to motorists, said analyst Roger Lanctot of Strategy Analytics. Aha and TuneIn are the Internet radio providers best positioned to help automakers do this, Lanctot said.
"If the customer agrees to share his information, they would have the ability to turn the car into a moving customer clinic," he said.
Aha, which Harman acquired in 2010, has signed up Acura, Chrysler, Ford, Honda, Porsche, Scion and Subaru.
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