Monetizing apps: Experts warn of backlash for automakers

Then there are services that improve safety and security. Farley explained that these are similar to the Ring home security systems that many consumers have. Such applications, he said, would record video and data and help determine responsibility in crashes and help parents monitor their teenage drivers.

Alan Wexler, senior vice president of innovation and growth at General Motors, said the company’s ability to develop an app ecosystem could lead to annual revenues on par with companies such as Netflix and Peloton. It will be about $25 billion by 2030.

In August, GM began requiring buyers of new Buick and GMC vehicles to pay $1,500 for a three-year subscription to OnStar, the company’s longstanding in-vehicle safety, security and connectivity service. Previously, OnStar was an optional service. It currently has about 4.2 million paying subscribers.

Meanwhile, Stellantis plans to generate about $20 billion in software-related revenue by 2030 from services and subscriptions.

But despite such optimistic proposals by automakers, they face multiple challenges in developing and monetizing a robust ecosystem of paid apps and subscription-based services. .

Consumers are hesitant to pay extra for in-car apps and subscription services, according to an April survey by Cox Automotive. Three-quarters of the 217 consumers surveyed said they would not pay an annual or monthly fee for access to additional vehicle features, especially when it comes to safety and comfort. .

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