The great online car-radio race

March 14, 2011: 5:00 AM ET

To woo the coveted drive-time listener, Pandora and rival Clear Channel are trying to outfit cars with music apps.

By Steve Knopper, contributor

The battle between Internet radio and traditional broadcasters is coming to a dashboard near you. Pandora, the 11-year-old online music service that recommends and plays songs based on listeners' preferences, will soon be offered in a handful of Ford (F), Mercedes-Benz, Toyota (TM), and Hyundai models. Clear Channel Communications, the world's biggest radio company, is also busily working to ink deals with automakers; its iheartradio mobile app, which simulcasts 750 broadcasts of major stations, will be available in select Toyotas later this year.

Up for grabs: the 70% to 80% of radio listeners who tune in from their cars in any given week. (Also in the mix: satellite radio's 20 million subscribers.) For Pandora, which has successfully penetrated desktops and smartphones, the car is the next frontier. "When we look at growing, that's what we have our eyes on," says Pandora strategy chief Tim Westergren.

The key for Internet and traditional radio players -- and their auto­maker partners -- is to find ways to make their services simple for ­drivers to use. A consumer who wants to enjoy Pandora or iheartradio in his car today usually needs to jury-rig an iPhone or other mobile device to the car stereo with clunky wires and "aux in" jacks.

Auto engineers are taking a few different approaches to Internet radio, though for now all of them rely on the driver's (or passenger's) cellphone for connectivity to the Net: Ford has spent the past four years building a hands-free ­dashboard system, AppLink, that synchronizes with the Pandora app on a driver's phone via a Bluetooth wireless connection. Toyota's Entune system also syncs up with special software on a user's phone, but Toyota says it will use the phone's wireless connection to update and change its suite of in-car apps. (The Pandora and iheartradio apps are free, but long-distance drivers, beware: Those services use up minutes on your wireless data plan.)

Toyota, which will offer both Pandora and iheartradio via Entune, says it doesn't see the two services as mutually exclusive. "They're different enough for people to want to listen to them at different times," says Jim Pisz, Toyota's advanced-technologies manager.

But Bob Pittman (yes, that Bob Pittman), Clear Channel's chairman of media and entertainment platforms, believes that his company's iheartradio app has an edge because it is more like, well, radio.

"A radio station is dynamic and changing all the time," he says. Ultimately, though, the winner of this latest clash may not be the company with the best tunes or the coolest deejays but the one that makes flipping through online stations -- while driving -- as easy as just turning the dial.

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