Sunday, July 27, 2008

XM AND Sirius Merge - WHO CARES?

In what has to be the most overblown story in radio history, the FCC has finally blessed the marriage of XM and Sirius Satellite Radio. Sure, this forms a monopoly, and hurts the consumer in the short run, but it will ultimately be a virtual non-story in the timeline of radio. Here's why!

  • First of all, satellite radio is already a failure. Yes, many of you have it in your car, and you enjoy it a lot, and yes... you do keep hearing stories in the news about how many people are subscribing to it. But consider this... If you add up the total of XM and Sirius subscribers in the U.S., you will still get just a tiny fraction of the entire radio universe. These companies are only merging because they are desperate to stay afloat, and they had to agree to a number of hardships in order to be allowed to merge, uincluding several years of price freezes.

  • Most new XM and Sirius radios are sold through new car sales, which are not exactly booming in this economy.

  • Most importantly - even as the two companies merge, satellite radio is already becoming obsolete. You may be willing to shell out 13 bucks a month for the service now, but in another year or two (at most), you'll be able to get all the same stuff (and much more) for free - once internet car radio arrives. It's just a short matter of time before that technology arrives, and once it does, it might just boost terrestrial radio instead of killing it. Stations that currently have signal problems in their far-reaching suburbs will now be able to potentially reach millions more listeners by simply streaming their audio, which listeners will be able to hear while driving. In fact, internet radio is already arriving. Looky here:

By the way - one technology I have not mentioned is HD radio. For those of you who pay no attention to the business, HD radio was terrestrial radio's answer to satellite - a way to give you hundreds more listening options commercial-free. I personally think HD radio is dead on arrival... Several companies have rolled out HD stations, but both the programming and the signal for those stations have been spotty at best. There's been a ton of money spent on technology and marketing, but despite all that, virtually no owns an HD radio, and for now, there's really little to no incentive to own one.

Just stick with AM radio, people... yeahhhh THAT'S the ticket!

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