In 1999, on the eve of Y2K, I was talking with my longtime friend Bill Sobel — one of the most connected media people I’ve ever known — about the technological advancements we expected to see in the first decade of the new century.

Bill foresaw the advent of easier-to-use video cameras, made small enough that consumers could use them anywhere anytime. Now, just a few years later, they’re here. Some cell phones have built-in video functionality. Last year, Bill introduced me to the remarkable Flip camera, designed specifically to capture content, transfer it to your computer, and share it with the world. That development has transformed the way events in our lives are collected, including caught-by-consumer news footage that is now a mainstay of virtually every TV newscast, not to mention much of what’s uploaded to YouTube.

My prediction was that, as broadband’s expansion continues, we’d see car dashboards that included internet access. It wouldn’t just be used for visual information and GPS mapping, but would affect the audio you listened to, as well. With iPod-like technology built in, your car could download podcasts for you to listen to on your commute, or you could listen live to any audio source you wanted, whether it was an online-only stream or a terrestrial radio station, local or not.

Today, Mike Stern at Radio and Records reported this item:

Both Chrysler and BMW have announced plans for Internet access in their vehicles. Chrysler will be able to add the feature to existing cars at the dealer level and plans to make it a factory installed option by 2009. BMW’s plans include a dash mounted display that will only work when the engine is off but full-time access for passengers in the backseat.

This advancement will be a boon for consumers, offering almost limitless choices. Audio services will proliferate, both free and via subscription. As in-car internet access expands, XM and Sirius will have to figure out a new business model — they won’t need their satellites anymore as they could provide all of their content online.

According to a new survey, 33% of American adults have listened to internet radio, and more than half have done so in the last month. Naturally, the younger you are, the more likely you are to embrace this distribution method. You’ve lived your life in an antenna-less world, where content on demand and myriad choices — with little commercial interruption — are the norm.

The downside will be for terrestrial radio stations, which for decades held a virtual monopoly in providing live in-car audio, competing only with pre-recorded formats from cassettes and 8-tracks to CDs and mp3 players. Now, they’ll have to fight for consumers’ ears even more, at a time when the industry is already struggling economically in an infotainment-laden media world.

Many consumers are already using this techonology on their PCs and laptops, not to mention cell phones with the ability to stream live audio. While on the air here in St. Louis, I had listeners in Portland and Columbus and Dallas enjoying my show online at their desks. Bill used to listen to me on his Motorola cell phone while commuting home on the Long Island Rail Road. If you like a local radio personality in one city, you’ll be able to listen to him/her in your car, anywhere in the world. What will that do to the business of radio syndication, when you don’t need multiple broadcast outlets and transmitters to reach listeners?

Apple, Amazon, and companies like them will also have another business opportunity to exploit. The two-way internet connection will allow consumers who like a song they hear to click a “buy” button and download it. Or order a book by an author they hear interviewed, delivered to their home or downloaded as an audiobook for listening on demand. Or bookmark the website of a business whose commercial grabs them for later review. And on and on.

Unless broadcasters grasp the importance of this platform, and embrace consumer-friendly digital distribution, they are destined to be left behind. This is the future of in-car audio, not HD radio, which is headed for the dead technology pile, right next to “quad.”