Audi Functions on Demand
In their rush to cash in on the promise of monetization from over-the-air updates and features on demand, OEMs are tripping over each other to try to bring features to market that promise recurring revenue quarter-after-quarter, year-after-year. However, as is sometimes the case, ideas that seemed like a good idea in the boardroom are met with a resounding thud in the consumer marketplace. Audi Functions on Demand
Although never deployed in the U.S. market, word of BMW’s subscription charge for heated seats in some overseas markets made its way to the owners’ forums, where it was met with outrage. BMW USA later released a statement clarifying the availability of OTA-activated options, but emphasized they were offered as a one-time purchase, not a recurring charge.
It seems Audi had a much more reasoned and pragmatic boardroom discussion when it came to OTA features. Its approach could be a potential win-win for both the company’s bottom-line as well as consumers.
Initially launched in Germany and Norway, Audi is offering a handful of options on both a trial and permanent purchase basis. It is offering its initial selection of Functions on Demand option on a €1, 1-month trial basis, including its full-featured MMI Navigation Plus, which is priced at a substantial €3,099 as a permanent option. In addition to the 1-month trial, 6-month and 1-year trials are offered, as well as the permanent option price. Audi Functions on Demand
The “Try before you buy” approach
This hybrid “try before you buy” approach seems to deftly balance the seemingly disparate interests between recurring revenue sought by company bean counters, and customer “surprise and delight.”
The terms of the trial are clearly outlined up-front, and in most cases, the 6-month and 1-year trials are priced reasonably enough that owners could be enticed to make an impulse purchase for a longer trial that the introductory 1-month teaser.
Of course, many of these functions are essentially duplicated (at least in the eyes of consumers) by smartphone apps or projected solutions through CarPlay and Android Auto, so a high take-rate on these features is not necessarily guaranteed. But for only €1, or another negligible fee, a few owners might try some features out on a whim. As always, the desirability or consideration is dependent on the value proposition. Which at least on a trial basis, seems reasonable.
Audi promises more features and functions will be offered on a trial/permanent basis in the months and year ahead in the broader European market, with deployment promised for 20 other European markets. While consumer reaction to this approach is yet to be seen, this is one of the most reasoned, common-sense approaches to OTA option activation that’s been announced so far.
