It’s time to reinvent in-car broadband pricing

Americans spend a lot of time in their cars. According to the U.S. Census Bureau, the average worker spends more time (~100 hours/year) commuting than they do on vacation (80 hours). And that’s not even counting all the time ferrying the kids around, doing errands and (of course) that all-American favorite, the road trip.

With so much time spent in the car, it shouldn’t be surprising that infotainment systems are increasingly important when consumers choose a car (or outfit an existing car).

What should be equally unsurprising is the fact that for the past couple of years, most of the emphasis here has revolved around integration of portable media player/smartphone devices (read that as: iPod/iPhone) into the car, rather than on the built-in “connected” car systems that were getting all of the emphasis a few years ago. And in a pre-App Store, pre-cloud world, integrating devices that could be replaced several times during the car’s lifespan (10 years or more for most cars today) certainly made sense when compared to building those features directly into the car. Without a mechanism to easily add and upgrade applications, the car’s technology package would be obsolete long before the car itself.

I’d go so far to say that the connected car — with built-in broadband — was all but declared dead. And I’d go on to say that such a declaration was definitely premature.

In the past few weeks we’ve seen a lot attention being paid to the ng Connect Program’s new “LTE Connected Car” concept, developed with a host of partners, including an automaker (Toyota), a wireless infrastructure manufacturer (Alcatel-Lucent, the founder of the ng Connect Program) and multiple content providers (Chumby, Atlantic Records, et al.). What the concept shows is a car with built-in long-term evolution connectivity, multiple touch screens (providing more access and apps to passengers, as is appropriate) and the ability to access a number of different apps from the network on an on-demand basis. I think that this last bit is really the key here, as it allows the system to grow and develop over time, so users can start off with a basis of true broadband connectivity (LTE) and built-in display/interface devices (the touch screens), while the service itself develops and improves over time.

I’d go further and say that this model trumps the “integrate the iPod onto the navigation screen” model that is state-of-the-art today. That model still relies on physical interfaces (such as iPod docking cables or Bluetooth) that might change over time and that, in any case, aren’t going to address anywhere near 100% of the market. Take a look at one of the charts the car manufacturers publish to show which features work with which phones in their smartphone integration and you’ll see what I mean — and then try to extrapolate out a few years when everyone’s smartphone will be completely different than today’s model. And think about asking tens of millions of car owners to apply firmware upgrades to their non-networked cars to accommodate this.

Where I stumble on these ideas is how the carriers price broadband in the car. Carriers are always so intent on saddling these efforts with expensive pricing plans that no one will buy unless they spend a lot of time as a road warrior. What they’ve missed is that the real opportunities in the car are more spontaneous and opportunistic, at least when you are talking about the masses. There’s room for both pricing models, and carriers would be wiser to learn from all their failures in this space to date — how many people bought built-in-car Wi-Fi access points? — when mapping their way forward here.

The car is ripe for a Kindle model of pricing, in which bandwidth charges are rolled into the content price. If they want the all-you-can-drink model, then fine — let them pay $60 per month and get discounted content. I honestly don’t think that consumers have a problem paying for content — or even paying more for content — when there’s a convenience factor for them. Look at Apple’s iTunes Store, which successfully charges $2.99 for TV episode that consumers could watch for free on their DVR. How many parents would not pay that if they found themselves stuck in traffic with a carload of kids and no DVD on board? Imagine all of the other apps that could be enabled (and monetized) in a connected car if the pricing made it attractive for users to reach out across the network and grab them exactly when they are needed?

But more importantly, doing so opens the (car) door to the same sort of always-on applications that powered the landline and mobile broadband boom. I can’t help but think that if all cars had OnStar-like emergency access, more lives would be saved every year. Had the car carrying those Dickinson State University students in North Dakota been so outfitted when it drove into that pond, maybe they’d still be alive. It should not take having to buy a certain car model or expensive concierge service to save a life. Would they have paid $100 for the call? I think so. 911 calls are supported on mobile phones regardless of account activation. Cars should be the same way. The right pricing can make this happen.