As the years go by, it seems more and more likely we will actually be driving autonomous cars in the future. Right now, people that are driving in autonomous cars still have to pay attention to the road, but this might as well change too. At that point, most cars will have been replaced by autonomous cars, and drivers don’t have to do anything to get from point A to point B, except for telling their car where point B is, which is probably done through with the help of speech recognition. However, at the end of the day, drivers still have to spend time to get from point A to point B. The question is, how will this time be spend?
Yes, of course things like using smartphones, laptops and reading books or newspapers can all be done inside a car. However, car producers might also offer more appealing options for people to spend their time on. When car producers incorporate screens and computers inside their cars, people might be willing to spend time on that instead. This is where business models come to play. What if a car producer, let’s say Tesla, is able to partner up with a entertainment service, let’s say Netflix? This gives the driver two options: use his own materials to spend his time, or get a Netflix subscription to watch on a big screen, which is already in his car, instead. The car producer, Tesla, could now get a referral bonus from Netflix for every car sold!
The point in this blog is not that Tesla should partner up with Netflix. No, the point is that car producers should think about which information strategy should be applied to this new situation, in which drivers are suddenly given back their traveling time. How will car producers profit from this?
You have chosen a very interesting topic to write your blog about! As the first self-driving cars are in the market, it is important to think and discuss the further implications when it comes to fully autonomous vehicles.
I believe that it will be very hard and difficult for ‘drivers’ to give up their whole control when ‘driving’ an autonomous car. Due to this, I think that in the beginning people will spend a considerable amount of time still watching the road. As with all new technological developments, it takes time to fully adapt and be fully comfortable with a new innovation. I thus believe that car producers should first be focusing on customers to feel safe in autonomous cars. When they do feel safe, they are more willing to experience extra features where after car producers could further think about their information strategies and business models. In my opinion, they also could think about extending the car with additional ‘physical’ features such as a place to sleep or a little fridge (also an opening for alliances with other companies). It will be very interesting to see how these innovations will develop and how the vehicles will be transformed into fully personalized devices.
Thank you Carmen, I like your suggestions. Yes, it will probably take a couple of generations before people are confortably watching Netflix inside our cars. People from our generation are called ‘digital natives’, maybe people from the next generation will be called something like ‘autonomous natives’?
Interesting read! In addition to your article I would suggest that the business models of car manufacturers will need to change dramatically.
I expect that, within a few years, customers will no longer base their decision solely on design, brand, price and comfort while selecting a car. As you mentioned, the introduction of self-driving cars leads to extra time to spend for people. Therefore, I would argue that cars become some kind of devices, similar to phones, and that the ones with the best platform, customer experience and content generate great value for its users. Because of the shift towards a more digital business, the manufacturers should shift towards an ecosystem driver. For moving from a pipeline business towards becoming a platform, a firm could take in account the three main changes introduced by Van Alstyne, Parker and Choundary (2016), namely: (1) from resource control to resource orchestration, (2) from internal optimization to external interaction and (3) from a focus on customer value to a focus on ecosystem value. It is questionable whether the car manufacturers are agile enough to rapidly change.
You ended your article with ‘How will car producers profit from this?’. Maybe their first concern should be how to successfully change their business and mindset to remain active in the industry. Understanding the characteristics of information goods is crucial. How will car producers be able to remain competitive in the coming years?
Van Alstyne, M. W., Parker, G. G., & Choudary, S. P. 2016. Pipelines, platforms, and the new rules of strategy. Harvard Business Review, 94(4), 54-62.
Yes, I agree, ‘competitive’ would better suit my blog. Profitability is one thing, but customer satisfaction is another! I did take this into account using Netflix as an example though. Thanks for your addition!
Hi Arjan!
Very interesting topic to bring up! It’s going to have an incredible impact on people’s exposure to various social networks, advertising strategies, and entertainment channels for sure. I recall reading somewhere that the average car commute per day is over 45 minutes for the average worker. This added screen time will hugely impact the reach of companies when targeting potential customers. Imagine the impact of tailoring adds depending on your location, being close to a fast-food restaurant and receiving a “food tip” when driving past it during dinner time. Advertisements surrounding various location-based events could significantly play a role here. Do you believe this to impact the advertisements we see on billboards next to roads then, since this could be moved to the screens? (More so in the US perhaps than in Europe)
Nice post!
Alexander
Yes, I do. Unlike in the Netherlands, in the US almost everybody travels by car. Thats probably why they have so many billboards. Billboards will start dissapearing when no one looks at them anymore. I don’t think consumers are willing to accept advertisements on screens anymore. They would rather pay extra to watch Netflix without advertisements. Marketeers will have to become smarter!
First of all, thank you Arjan for the interesting reading. It is very exciting to imagine that we will be able to do all the prohibited behaviors such as playing with cellphones and watching movies. As the autonomous driving technology frees drivers while driving, it creates the time gap between A and the destination B. This gap can be translated to $, especially for businesses, it can be a great opportunity that can bring them a big fortune. Anything can happen during the travel time, and various services will proliferate to meet all the customers’ needs. In addition to the business perspective and the traveling time you mentioned in the reading, I adopted customer perspective and thought about the use of the space in a car. I believe the technology can fundamentally restructure the interior of the car based on customers. Since ‘drivers’ no longer need to pay attention to the road basically, the seats facing the front will lose the point to be in that direction. Therefore, space can be structured in a more flexible way, for example, businessmen can have a small meeting with his/her team seating around a round table in a car, during he/she is heading to a conference. For moms, everyday morning can be a war, helping their kids get ready and driving them to school. However, with a self-driving car, moms can comb their hairs and give them breakfast in the car. I look forward to the near future how the autonomous driving technology will change our daily lives.
Looking forward to it as well!
Hi there Arjan,
This is indeed a very interesting topic, it’s unimaginable the amount of options that the car manufactures will have in terms of content they’ll be able to provide to their customers; in my opinion it’s a way more complex and interesting subject than the majority of people imagine. I think that we’ll see in a near future (when self-driving cars become ordinary) a huge “sea” of opportunities for marketers. Can you imagine your vehicle suggesting you to do a small detour on your way home to stop for a Cheeseburger on a McDonalds? I can.
In North America the average worker spends 4.35 hours a week on a car commuting to his workplace. I’m certain that a good number of brands will be very interested and will pay large sums of money just to present their content to millions of people.
I’m lovin’ it
Despite the fear of sounding crude, I think it is worth mentioning that there will be a lot of sex in autonomous vehicles. There are a large variety of articles on this topic since 2015 (https://www.inverse.com/article/8474-sex-in-driverless-cars). There is a legitimate discussion to be had about how these mobile pods will used. An extensive debate was also triggered recently by the release of volvo’s concept (https://design-milk.com/volvo-360c-concept/) which can fit a queen sized bed. Such vehicles can be equipped with occupancy monitoring cameras to prevent this, but what about privately owned vehicles? There will need to be a reinterpretation of current legislation to criminalize the practice and even this would not eliminate its occurrence. Just food for thought…
Good point! Possibly, in the future, governments might even consider decriminalizing this. I do think we’re getting off topic here though, not for information strategy..
Hi Arjan,
Indeed a very good question. Back in the day Henry Ford said that if I had asked people what they wanted they would’ve told me a faster horse. People do not know what they want only what they want to achieve. Back then it was a faster transportation method. Throughout the years I think we have changed this way of thinking. We just want to get from point A to B. If that is by car, train plane does not matter as long they get there comfortably. I remember a few years ago a director of a train company said that introducing WIFI and thus making the travel more amenable had a bigger impact on the customer satisfaction than decreasing the travel time.
Thus it is indeed a beautiful challenge now that autonomous driving is developing to start thinking of ways to make the travel more comfortable and I dare say more productive. For example, cars could be designed in such a way that they could function as an office. If you have to commute 2 hours a day every day you could win those back by starting to work on your way to work. I completely agree with you that this this technology could offer a lot of possibilities for ca rmakers in the nearby future.
😀
Hi Arjan,
I liked your blog! Thank you for sharing your thoughts on this topic. I am wondering, do you think there will be fully automated cars in the future? As written in the guardian article (https://www.theguardian.com/technology/2018/mar/19/uber-self-driving-car-kills-woman-arizona-tempe) there was recently a woman killed by a car in autonomous mode. I am doubting cars could be fully automated in the future. Of course, technology will be improved significantly, but I think the human aspect to assess situations can not be simulated with technology. Let me know what you think!
Thank you Roos. Yes, I do firmly believe cars will be fully automated. Cars are now one of the most unsafe ways of traveling, and I believe technology beats humans ‘easily’ on this aspect. I also believe that as more people use fully automated cars, these cars will communicate more and more, making it even more safe.
Very interesting read! Thank you for your post.
I think it is an interesting concept that you raise and one that can be quite feasible.
A couple points that came to mind while reading you post.
I wonder what the interior of cars would look like if they become autonomous, since concepts like a steering wheel and dashboard won’t really be needed anymore.
This leaves room to really re-create the car into anything you want. Maybe as you depict, more like a movie theater with netflix or maybe more into an office.
This made me think of another point which was, depending on what kind of commutes we’re talking about, I’m not sure how long people will be in the car able to watch netflix. Maybe people might use their commute time to get more work done. I can imagine that If i had an autonomous car, that I would want to be able to just quickly shift my home office into my car and then continue whatever I was doing at home, now in my car.
However, that’s different per person.
Either way, I think it’s an interesting point you raise about how commuting and the activities done throughout these commutes will be shifted once autonomous cars are introduced.
Thanks for your input! For people with office jobs an office would be the ideal thing, but for others a living room vibe might be better. Looking at it from a business perspective, I think a deal with Netflix would be the most profitable, that’s why I picked it for my blog.