XM Radio, Sirius and Why Satellite Radio is Doomed

Originally published: 01/2006 by J Wynia

Scoble is just one of the several mentions of XM Radio I've seen recently. They've been pushing a new portable reciever where you can listen to the service from a handheld device.

However, what is noticeably missing from their marketing materials is any acknowledgement larger than 6pt type that NONE of these satellite radio receivers work in North America without a clear line of sight view of the southern sky. That's right. Your new "portable" XM radio won't work inside a building. GPS has the same issue as do pretty much all satellite-based consumer products.

Satellite TV works because the dish can be mounted permanently to the roof of your house. Satellite radio in cars works because most roads give you enough view of the sky to work and GPS's similarly. However, given the expectations of what a "portable music player" should be that MP3 players like the iPod have given consumers, most people who buy one of these XM setups are going to be disappointed.

The net result of this is that XM and other satellite radio services potential market is limited to those traveling in the open (i.e. cars where you can have the receiver look through the windshield) and those who are stationary (home stereo setup along with your satellite TV). Those aren't insignificant markets to be sure. However, clearly these companies saw those as inadequate to sustain their business models or you wouldn't see the portables coming out.

And, with the rise of podcasting that gives people a huge variety of content to use portably and asynchronously (I'm listening to a hilarious presentation from PopTech right now), that's FREE instead of $10/month, the competition is going to be fierce. Not to mention the various unlimited song services with portable players that give you playlists 1 million songs long whenever you want them.

All I can say is "Good luck, XM." You're going to need it.

Comments

Beth on 1/6/2006
I've never had much interest in satellite radio. If I want to listen to music I put on a cd. If I want to find new music, I go online. All of the talk radio shows I want to listen to are syndicated to a local station. (I think most of them have podcasts as well) It's just one more monthly entertainment bill. The only thing I'd be remotely interested in is the Martha Stewart station on Sirius. I don't need to pay $10 a month for radio (this from someone who has an hour commute to work) when I'm already shelling out $20 for Netflix and $14 for DVR. You don't even want to know what my cable bill is. Yet for some reason, a surprising number of people I know (people who pay for both Tivo and Netflix) are getting satellite radio. I don't really get it I guess.
Les on 1/6/2006
I am a sirius subscriber and in addition to the unit in my car; I have a username & password that allows me to stream all of the music channels from the siruis website. This is how I listen at work; and am not sure if this is a feature with XM. Sirius/XM is not just music. You get weather, traffic and sports programming as well. Sirius was transmitting every one of the BCS bowl games this last week.
J Wynia on 1/6/2006
Beth, I'm with you on the cable bill. I have DirecTV with 4 receivers, 3 of them Tivo's and all of the non PPV channels as well as the 8 at a time Netflix setup. It doesn't matter if Sirius/XM are not just music. Neither are podcasts. And, podcasts can do both wide appeal stuff and deep niche stuff (like knitting shows). Streaming has never appealed to me because of it being tied to the computer and in many cases stil require synchronous access. I dramatically prefer the fact that I can start a podcast at 7:00 am in the car, pause it until after my 9:00 meeting, listen for 20 minutes, pause again until I leave for home, listen for 10 minutes. pause while I go into the grocery store, start back up, pause in the driveway and finish in my basement. The only thing I can think of that is likely to keep them going is exactly what you cite, Les, sports. Because the broadcast rights are exclusively negotiated, the content can't be migrated to other methods of communication. However, if the purchase price of those rights isn't supported by the subscriber base, they'll end up losing the contracts to a more efficient method. If you look even at just one podcast directory, you'll see that the range of programming dwarfs any commercial service. And, many of the more legacy media programs are coming out as podcasts (NPR, regular radio, movie commentary, etc), leave only content that is artificially restricted to specific distribution channels via contract.
Seth on 1/9/2006
I-along with about 9mil others-LOVE SatRad. I have XM right now. I got it because of the shrinking terrestial radio format, increased commercials and such. For instance, Beth says, "If I want to find new music, I go online." How does one know what music they will like that way? You don't, you woudn't know anything about any new artists because you'd never hear it. As far as podcasts, too much variety is as bad as too little. I'm sure there is some podcast somewhere that I would enjoy, but I spent 30 minutes searching and didn't like anything. It all seemed a bit "amature night" also. You can pause SatRad too, and record. There is also new technology coming for video as well as stronger recievers for portable use (without $99 batteries like iPod). Podcasts are cool, but so is SatRad.
J Wynia on 1/9/2006
I'm not arguing that there aren't benefits or that there aren't people who love it. I'm arguing that it's not likely to hit *50* million due to technical limitations and a quickly maturing online market for audio content. Last year alone, 19 million mp3 players were sold vs the total market size of satellite radio being 9 million. Podcasting is only about a year old and is just getting going from a commercial and professional perspective, so yes, it is "amateur hour" in many cases. However, that's exactly what happened with the web in 1994-1999. The next year will result in a pretty big rush of increasingly professional content filling up the space. Sure, there need to be better filters and ways of sorting through the content. However, satellite and terrestrial radio rely on a programming director and executives to do the filtering and I'd rather have someone who has similar taste to me do it instead. To find new music I like, I use Last.FM. However, most of my audio listening that isn't driven by CD/MP3 purchasing is actually non-musical content. That's where podcasting is really exploding the options over satellite and terrestrial radio. I listen to NPR on terrestrial radio and that's about it there. XM and Sirius offer a few more options, but mostly pop culture and political stuff. I can find podcasts (including some that are just as well produced as anything on radio) on pretty much any niche topic I can think of. That's a really powerful thing that is only just starting to be seen by people. When the tools mature a bit, people will latch on hard. And, with iTunes including podcasts right in the software for one of the number one gifts of 2005, lots of people are getting exposed to it. Pausing and recording at first glance *appear* to be similar to what MP3 players do, but they aren't really. Recording assumes that I know and remember that I want to record it and do so when it airs. That just doesn't work in reality. I've discovered some great online shows that let me dig through YEARS of past shows. How can I record last week's episodes off of sat radio? Pausing has similar problems. I rarely listen to anything on the day that it was released. Sat radio may let me pause, but I have to have been listening to it live in the first place. The battery situation on the iPod is an unfortunate choice for one product. However, it's not a technical limitation on the entire category of products (like satellite signal penetration). There are lots of MP3 players that don't have that battery problem. They can make for stronger receivers, but it won't compensate for the fact that the signals themselves just aren't that strong and were never built to penetrate into lots of the places people want to listen.
Beth on 1/9/2006
Seth, I do agree that it is a good way to hear new music, but I get my fill online. With podcasts I can just put everything I might want to hear on my iPod and take it with me. Not to mention there are inumerable resources on the internet for finding new music, more in line with my tastes.
Seth on 1/9/2006
J Winia, Beth, like I said podcasts are cool. I mainly posted here because the title of this article was "Why SatRad is DOOMED" and that's just silly. Like podcasts, it's an emerging and growing business and technology. I
Seth on 1/10/2006
One more thing; The portable devices now have an add-on antenna which you can get for about $20, with that it will work just fine indoors. Just FYI.
Joe on 1/11/2006
Delphi XM MyFiâ„¢ appears to be an excellant portable solution for XM. Do you agree? If so, is there a similair solution for Sirius?
justin on 1/11/2006
Just want to say that I've tried XM...got it with my car with a free trial. I then heard sirius and got a subscription, it is awesome (much better content and not as edited as xm)!!! I don't want to have to download/search for things to get them as with a podcast. I understand that for people that don't travel much and like spending a lot of time on the computer that this can work, but I put 30 to 40k miles on my car a year. It's awesome not to have to search for stations and to be able to listen to the genre of music that I want to, when I want to. I've been finding myself turning off the tv, getting away from the computer and listening to the radio while doing more productive things because I like the content and find it extremely entertaining. I think that satellite will continue to grow and become very popular!
J Wynia on 1/11/2006
What a lot of people don't get about podcasts is that you actually *don't* spend much time at the computer with them. For all of the shows I listen to, I subscribed several months ago. Now, I just plug my MP3 player in in the morning and 3 minutes later I've got all of the new shows and I leave the house.
Morgan Paul on 1/19/2006
If you look at the big picture, Sat is just one more delivery system, one that will suffer from the same growing pains content wise as cable TV. Dilution is a problem. Too many channels/choices leads to a big cloud of noise. Like the person who mentioned looking for 30 minutes for a pod-cast, finding entertainment you might like is ase difficult a problem as finding QUALITY entertainment period. The other problem with dilution is more subtle. Terrestrial radio with its limited choice of stations, forced listeners to 'commune' around them. Howard Stern was a mass meeting point who would never have grown at the rate he did without the concentration of listeners syndicated terresterial radio offered. Not because of the syndication, but the concentration of the listening audience. LOTS of people had little rush hour choice than to listen to Howard. The world has changed, for better or worse. MP
Manny on 1/31/2006
Sirius Rules I drive 30 miles to work and back, while losing signal from Hartford and New York stations throughout the trip. Stern rules NPR on Sirius is cool too. and on long trips with the kids the kidstuff and Disney channels are the only way to go. I added a second receiver to my wife’s car for 6 bucks a month. Since stern came to Sirius there has been 3.2 million subscribers as of 01-06-06 with projections of 10 million by years end. Sirius has a hand-held unit and the how it works is similar to a pod cast were it memorizes your favorite channels and then plays them back when your not receiving signal. It’s a cool looking unit too but pricey at 250 bucks. Fact is terrestrial radio is too commercialize with little talent to sustain it. Public radio is the exception for now anyway. Sirius is going to be in every car in the near future, and XM may hang around as an alternative. Oh ya plus you can get your Sirius signal through your dish network antenna too for home use. I personally use the FM transmitter on my Sirius receiver for home stereo units; can hear the Sirius content any were in the house by tuning in to 87.9 FM. Pretty cool if you ask me.
Chris on 2/23/2006
No way is satellite radio doomed. I got Sirius last October and haven't tuned into one minute of AM/FM radio since. If satellite radio is doomed, then why can't these retail stores keep the Sirius radios on their shelves? As soon as they get them in, they're flying off the shelves. XM might be doomed, only because Sirius may put them out of business.
Matt Scott on 4/12/2006
Whaaaa whaaaaa 13 bucks per month. My wife spends that on silk panties in a week. SATRAD is alive and well. Those with jobs don't know or care what a padcast is. [Editor: I don't delete posts unless they're offtopic or outright spam. I did delete the link to a porn site that Matt chose as his home page. Matt, thank you for your cogent analysis of the industry. Now go and play with the other kids and let the adults talk.]
Jason on 4/26/2006
Wanna know the real reason satrad may be doomed, now? They're adding more commercials starting next month. Why would you want to pay to hear ads when you can hear them for free on the radio? I believe that commercial-free was their biggest selling point. Now that they've ruined that, they are no different than terrestrial radio stations...except for regulatory issues.
Jimmy on 7/9/2006
Well, I feel that Satellite radio is here for good. I have had XM for about a year now and would cringe at going back to anything else. I feel for the average user sat radio has one major advantage over iTunes, podcast..etc. Ease of use! You just tune it in as you would an analog FM reciever. There is also tons of content you simpley can not get elsewhere as easily as you can with satellite. For instance, I listen to Old Time Radio on XM but to be able to do the the same with a portable player I'd have to pay a subscription to a site or find the programs through file sharing. This requires a lot of wasted time and effort when I can just turn on my radio. As for the antenna only working inside...they also sell indoor antennas that are more robust. Personally, I own two XM radios. (Both are the Roady2) One is in my vehicle and the other mounted to my PC with an audio cable running to my aux input. I have an indoor antenna on that one and it works great
Jimmy on 7/9/2006
Forgot to mention...$13 a month is much less than most online services.
Dan Buell on 8/15/2006
Had to drive six hours from Orange County to Phoenix today. Normally there are no stations to listen to for a big stretch of that trip and today I didn't have enough time to put together a road trip CD so.... Thank God for Sirius Radio. I've been podcasting for over a year and I find it difficult to believe that this strucure is somehow going to replace any form of radio. ~ Dan
Jeff Elkins on 11/3/2006
I think what you have to realize here is that everyone has different viewpoints on how they like their music. I am a Sirius subscriber and have been for about two years. I used to own an iPOD, but sold it because for me, it was a pain to keep updating with new music, finding the music, making sure the mp3's weren't corrupt, and the list goes on and on and on. As far as podcasts, I agree, I don't want to spend anymore time in front of my computer finding podcasts that I am interested in. Not to mention there are a lot of people out there that don't even know how to turn a computer on. I work in IT, and while technology is huge, for a lot of people they want nothing to do with it. To offer something that is installed and they just have to turn it on is a big plus. They don't have to do all the extra garbage to get the content they want. I would much rather get in my car turn on my Sirius, and listen to whatever programming I am in the mood to listen to. The comment about satellite radio having commercials is somewhat true. However, if you know anything about satellite radio the commercials are only on the talk stations like Howard Stern. Like a lot of listeners of Howard's you don't mind the commericals. They aren't as long as they were before he came to Sirius, and let's face it if your a Stern fan, you moved to Sirus for Stern, and realized that they had a lot of other really great programming that is commercial free. All of that was a bonus. The satellite companies need to make revenue also, and if they can get it from advertising then I am all for it. I didn't go to satellite for the commercial free option anyway. For me I travel a lot and hate channel surfing when I am out of range of one station. As far as price, come on we are taling about a small amount of money. Don't go to McDonald's twice a month and your subscription is paid for. If you can't afford satellite you can't afford the units to play podcasts. I personally do believe that Satellite radio is the way to go. I believe, while it is taking a long time, that more gadgets will come out soon that will imcorporate other factors for satellite use. I am an investor in Sirius, and believe that in a short period of time Sirius will buy XM and they will then be the only satellite radio company around.
Gary Colosimo on 3/11/2008
I've had XM for almost three years and I enjoy because there are no commercials. I listen strictly for the music, especially Deep Tracks. There I hear the music that never made the FM airways. Also, the bands and musicians of my 20s are still out there writing and performing. The subscription cost is one of my few luxuries. I'm not a techno-geek. I don't have iPods or Mp3s, just my XM. In my area I rarely lose the signal. I've heard rumors XM might go under. I hope not. They were the first, and in my opinion the best. The on air talent offer more than just hot air between songs. They provide anecdotes about the artists and music. It is my personal music appreciation course and I love it.
bubba jones on 2/13/2009
Too bad Satellite radio is being bought by Direct or Dish, the wal-marts of Satellite's, price will go up, choice and service will nose-dive. Sat radio is great got it in both cars, in the house, and portable for walks, (all for $20 a month) NO Problem with reception. Outstanding (too bad Sat tv will ruin it )
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