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Weekly UpdatesThe need of government agencies, consumers, fleet operators and other enterprises for fast, accurate, real-time traffic data, as well as the demands of individual telematics end-users for personalized, high-level traffic information, will create a $7 billion traffic information market dominated by a few major players.
But the approach to gathering and disseminating traffic data in the future will be significantly different from the present, where news media play the dominant role with its use of traffic information for spot news broadcasts, according to the results of an in-depth study of the market titled "United States Traffic Data Market." The study was prepared by the global telematics team at UBS Warburg, a leading global financial services firm.
"We believe that other market segments, particularly enterprise (fleet companies, high-level telematics end-users) and mass market telematics (navigation systems and other devices), will soon surpass news media in terms of revenues for traffic providers," says Saul Rubin of UBS Warburg. "Eventually, there will likely be a very high penetration rate of traffic- integrated navigation devices in automobiles, to the point where access to traffic information over the radio and on television will become less significant."
"However, despite the major shift among data providers, most industry players believe there will always be some media value for traffic headlines as part of news reports."
UBS Warburg analyzed the prospects of 11 companies serving the traffic data market in compiling the report. Its initial conclusions include: In the near term, Westwood One will maintain its dominant position in the market and Mobility Technologies will emerge as its only significant competitor in the 'end-aggregator' role. Both CUE and U.S. Wireless Corp. will be important players, CUE almost immediately and U.S. Wireless within a few years. Other companies such as TrafficCast and TrafficStation may find little niches within the market. Because of its experience, TrafficMaster "is worth keeping an eye on" and ClearChannel, an important player today, is expected to remain so in the future.
UBS Warburg researchers said that the telematics market "has developed a bit more slowly than we had forecast" in last year's industry spanning report, "Worldwide Telematics Market: Eyes on the Road, Hands on the Wheel." But, the firm noted, it could accelerate with the emergence of a "killer app" such as real time personalized traffic data.
The report observes "over the next four to five years, we expect companies to emerge that will provide full nationwide traffic packages. Enterprise and telematics users of traffic info will demand both incident data and speed data, and we believe there will be several end aggregators for both."
Based on its current market domination, "Westwood One could easily emerge as one of these overall traffic end-aggregate companies," predicts the report, while Mobility Technologies will likely emerge as its main competitor. Westwood One -- which industry experts estimate is the source of 90 percent of traffic broadcast information -- is good at providing "incident data," such as weather, accidents, road construction, sporting events, etc. But its role as a data gatherer will ensure its longevity. It uses more than 150 planes and helicopters, 30 traffic scout cars, and 2,000 reporters to gather traffic data in the 80 largest markets.
UBS Warburg also believes Westwood One will maintain its position as the information distribution leader to the media market, followed by ClearChannel, while CUE will emerge as the most important traffic info distributor to the enterprise and telematics market segments.
U.S. Wireless uses a system that tracks the movement of the RF energies of individual wireless devices such as cell phones to determine traffic flow. This is among the most cost-effective of the emerging technologies, say the researchers. The world leader in commercialized traffic speed information is U.K.-based TrafficMaster, which has built a network of roadside sensors in Europe, to transmit vehicle positioning. TrafficMaster, which is in the process of expanding into the U.S., can provide a global or multi-regional solution that automakers tend to favor, and could be an attractive partner for the automotive OEMs.
Mobility Technologies employs similar systems in the United States. CUE Corp. provides substantial coverage of the United States and Canada with its network of FM sub-carrier radio stations, and uses proprietary technology that provides a solution to the "Always On" problem of current cell networks for data transmission, and at lower cost. Future Traffic Predictability TrafficCast, which UBS Warburg views as the think-tank of the traffic industry, is the leader in developing mathematical algorithms that model traffic behavior.
This ability to accurately predict future traffic conditions, along with analysis of current and past traffic conditions, will enable navigation systems to determine what is truly the fastest route to a given destination.
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