The Future of Video is Coming to a Dealership Near You

Family in a car watching a screen
April 10, 2023 Xperi Chris Ambrozic
Vice President and General Manager of Discovery

Briana Larsen, vice president of content strategy and business development, also contributed to this piece.

Xperi sits at the intersection of car makers, media-tech, user experience and content owners, and our solutions have been integrated into cars for more than 20 years. This year is different. The 2024 models will hit showrooms this summer and major auto manufacturers are bringing video to the dashboard. Video may be new for automotive, but one thing is clear: auto manufacturers are investing in video with bigger and better screens.

At Xperi, we spend a lot of time exploring how people consume and enjoy content in the living room. We’re also investigating how people engage with video in the car. Below are themes we’re seeing from surveys done across TiVo and DTS, the dynamics at play in the market and how they relate to the living room and the car.

Average number of video services increase
Just when we thought it couldn’t go any higher, the average number of video services in the household increased. Year over year, the average number of services in a household has gone up from nine in Q4 of 2021 to almost 12 in Q4 2022. This includes all types of services — subscription video on demand (SVOD), transactional video on demand (TVOD), ad-supported video on demand (AVOD), free ad-supported TV (FAST), and virtual multichannel video programming distributor (vMVPD). The biggest increase is in non-paid services, which have gone up nearly 70 percent year over year.

There’s no question that AVOD and FAST are on the rise. How does this transfer to the car? The vehicle is even more important now than it was prior to the pandemic. It offers a third space — outside of work and outside the home — where users access and consume content from all the services they subscribe to.

SVOD churn rises
So, how does this impact we see in terms of consumer choice? Over the last 1-2 years, churn rates have increased significantly as it is easy for people to pop in and out of various SVOD services. Not many people can carry 12 or more different services so they are making decisions about what content catalogs they want to enjoy at what times. Once they’re done, they’ll drop the service and move on to something else.  

  • 27% dropped an SVOD service in the last six months
  • 34% added an SVOD service in the last 6 months

In the automotive world, 55 percent of people say the built-in entertainment system is important when deciding what car to purchase. All those different reasons why people are churning get even more complicated by the way they think about content not only in the living room or on their phone, but also now in the car.

Ad-tolerance and short-form content
While 60 percent of people are ad tolerant, an additional 14 percent favor ads. There is no denying that AVOD and FAST are growing rapidly.

How does this transfer to the car? Thirty-one percent of people say video is watched in the car today and that’s mostly short-form video on the phone. Moving forward, we believe that AVOD and FAST will be the primary content that’s consumed in the car. You can tune into live news or your favorite genre channel when you’re waiting to pick up your kids at school or are running a quick errand. Because these are likely the type of content users will be tuning, discovery of that content is essential in the car as well as the living room.

The importance of personalization
How do we help people cut through the noise to find content they’ll enjoy watching? It comes down to personalization. If you are trying to attract a viewer to your content, there are a dozen other services that are trying to do the same thing.

And the surveys show this undisputedly.

For example, 56 percent of people are satisfied with recommended content. They like having content recommendations presented to them in a personalized way, cutting through the chaos brought on by the myriad of entertainment choices.

In the car, nearly 70 percent of drivers want their vehicle to know them and personalize everything from the music to interior lighting and temperature.  

Personalization is absolutely crucial to delivering what users are looking for and expect, whether in the comfort of their living rooms or in the comfort of their connected car.

Learn more
Xperi sits at the nexus of the proliferation of content, how people enjoy it and how that content is moving into the third space. To gain more insights and access our Video Trends and Vehicle as a Third Space reports, click here.