The Failure of Satellite Radio

[Eric]

Satellite radio - that is, SirusXM satellite radio - was supposed to be revolutionary, an end-run around the heavily censored, mostly commercials dreck of terrestrial FM and AM radio.



Well, they did ok on the first score. Satellite radio is more free and open in the sense that things can be said openly that were absolutely verboten (and still are) on terrestrial radio, most notably George Carlin's infamous Seven Words. Score one for free (if scatological) expression. But satellite also gave voice to alternative expression - stuff you'd probably have never heard on terrestrial unless you tuned in late at night on some lonesome highway out in the Boonies.



Unfortunately, all this potential goodness is drowned out by a tsunami of aggressive advertising. It is much worse than terrestrial radio, too - which would never dare to run (literally) 10-15 minutes solid blocks of non-stop commercials, as often happens on satellite's other-than-music channels. Buy Gold... Now. Do you need debt relief? Call 1-800.... . Does anyone actually call these 800 numbers? Often, the same commercial is repeated in the same block of commercials, just to make sure you hear it. After awhile, this grates - remember, you are paying a monthly fee-for-service, that is, to get the programming. Instead you are getting a lot of commercials. Isn't that a lot like terrestrial radio - except now you are paying to hear these advertising onslaughts?


Satellite radio appears to be run by the same evil geniuses who run cable TV - evil geniuses because they have figured out a way to get people to pay for that which they used to get for nothing.


Not just the commercials, either.


Exactly like Cable TV, satellite radio offers you clunky, one-size-fits-none "packages" that force you to buy a lot of stuff you don't want and don't watch or listen to in order to get the stuff you do want - even though it is possible to let customers choose only the specific programming they actually want. Certain individual channels can be turned on and off, depending on what you've bought. So its certainly technologically possible to tailor each customer's programming choices on an individualized a la carte basis. Instead, we get Soviet-style, take-it-or-leave-it "bundles" that include two-thirds crap you don't want to get the one-third not-crap you did want. And it is Soviet - that is, not free-market - because you're made to subsidize that which you do not want and which would probably not stand on its own absent the subsidy.The crappy talk show hosts (think, Al Franken) ride on the backs of the good ones. Or rather, the ones that don't have an audience ride on the backs of those who do.



Satellite initially touted itself as cutting-edge, the future. But other than the means by which the stuff is piped into our cars and homes and iPods, it is as musty and crusty as late 1970s cable TV. As current cable TV.
No wonder it is not making the money - that is, attracting the audience - it had hoped to. On the order of 230 million Americans still listen to terrestrial radio for free vs. the 30 millions or so who pay to get satellite. (See here for some stats.)


Now, satellite is making money - and subscriptions have picked up. But the pace of both has been disappointing.


In 2010, for example, SiriusXM posted an 8 percent increase in subscribers and claimed revenues of 2.8 billion, a 12 percent increase over 2009. That was just enough for SiriusXM to report that it had earned a small profit - the first time in three years.


I suspect there's a lot of what they used to call churn in the newspaper business. It's another word for turnover. People sign up, then sign off - probably because they're turned off by the endless commercials and having to wade through (and pay for) 200 channels of dreck to get the four or five channels they want to hear.


It's a blockheaded business model - and it's crippling what should have and could have terminated terrestrial radio by now.


Satellite has been around for more than a decade now and it's still a relative bit player - despite almost every major car company including or offering SiriusXM-enabled radios in the cars they sell.


Some free advice, if any SiriusXM executives are reading this:


Can the commercials.


You have no idea how sick unto death millions of people are of being assaulted by advertising from the moment they wake up until the moment they close their eyes (and ears) at night. Offering commercial-free radio would be received like Manna from heaven. People would pay to escape Buy Gold... Now and Do You Need Debt Relief? ... and pay more than you currently get paid by these poultice peddlers. Maybe not individually, of course. But imagine if rather than 30 million subscribers paying $15 a month (with a churn rate of 40 percent) you had 100 million loyal subscribers paying $25 a month and re-upping their subscriptions every year?


Let people buy what they want.

Quite forcing people who are less interested in sports than Clay Aiken is in The Bunny Ranch to pay for a dozen version of ESPN Radio to get the political talk shows they want. And quit forcing left-liberals to buy right-conservative (or Libertarian) radio to get what they want - and vice-versa. Let people choose the channels and content they want to hear - and skip the stuff they don't want to hear - or pay for. Netflix does not make its customers pay for three NFL highlights DVDs in order to get one Dexter. They give you what you want - and only what you want. You could do that, too. And make money doing it.


Please, hear my words. Satellite radio is so promising. It could be truly revolutionary - and The End of terrestrial radio. If only it weren't held back by antiquated (and anti-market) business practices that should have been retired along with the 20th century.


Throw it in the Woods?

[Ken]

Hear, Hear! I am surprised that no organisation has yet seen the huge marketing potential of an advertising free radio/television network. On one of my other forums we have the ability to 'buy' our way out of advertising. It only costs, in total, six dollars a month and we have not had an advert on our site for a couple of years as one or other of us will always chip in to the pot.

Ken.

[dBrong]

I keep thinking about dumping my DirecTV.

My wife and I watch maybe 10 hrs a TV a week. Mostly watch it when getting ready in the AM, or cooking. There are about 200 channels. In the last year the number of 'paid programming' channels has mushroomed: The Brazilian Butt Channel (no kidding), Knives, Coins, Jewelery, Saws, Pots / Pans - you name it - I bet there are 25 paid programming channels. All the commercials are synchronized, so you can't jump to another channel, to avoid a commercial. There are some movie channels that have such lenghtly and numerous commercials, that you lose involvment in the movie.

For this you pay $90 a month.

[Ken]

I keep thinking about dumping my DirecTV.

My wife and I watch maybe 10 hrs a TV a week. Mostly watch it when getting ready in the AM, or cooking. There are about 200 channels. In the last year the number of 'paid programming' channels has mushroomed: The Brazilian Butt Channel (no kidding), Knives, Coins, Jewelery, Saws, Pots / Pans - you name it - I bet there are 25 paid programming channels. All the commercials are synchronized, so you can't jump to another channel, to avoid a commercial. There are some movie channels that have such lenghtly and numerous commercials, that you lose involvment in the movie.

For this you pay $90 a month.

I get my TV licence free, due to my considerable age. Apart from that, if it ain't free I don't use it.

Ken.

[chiph]

They can't support their business by subscription fees - the satellites and music licensing just costs too much. So we end up with the sleaze-ball ads for pawn-shops and used-car dealers.

What they need to realize is that they can make just as much, if not more money, by having fewer, but higher-paying, higher-quality advertisers. Dump the "Fast credit repair now!" people, and start running ads for Wells Fargo, who can afford to pay more for an ad.

Chip H.

[CDB]

I'm dumping my cable soon I think. I got aRoku box and between Netflix and the other channels I have I've barely used the TV except for news and background noise. And the news is virtually worthless. So, I think when I'm ready to deal with the various counter offers before they 'let' me cancel, I'll give a call and end it.

[Dave Brand]

The rental cars I've had on my last two tips to the US have had Sirius. I can't say that I've found the ads obtrusive - maybe it's because the only channels we listened to were music (50s & 60s) & NASCAR.

[dom]

I keep thinking about dumping my DirecTV.

All the commercials are synchronized, so you can't jump to another channel, to avoid a commercial. There are some movie channels that have such lenghtly and numerous commercials, that you lose involvment in the movie.

For this you pay $90 a month.

Yep, the synchronized commercials are ridiculous. I have the same service. I can't even remember what the hell I was watching once the commercials end.

My take on it all would be to get Netflix, Redbox, Internet on your tv, and the basic free digital air wave channels and call it a day.

When my Direct Rip-off contract ends I'll be doing what I said. Think the world as we know it might end first though.

[BrentP]

As I dig further into the sirrius-xm website for more options along with the choose your 50 station package so long as you have their add on radio there are packages that don't require the special. There's a 'talk-only' and a 'music only' for $10/month. There's also the family packages that save a dollar/month by deleting the playboy radio channel and couple others I guess. All of these are in smaller text way down at the bottom of the webpage. I'll just say I didn't notice them until I started intentionally scanning for other packages.

I'm going to let it expire and come spring when I'll drive the car more maybe I'll get one of their 'by-the-way' non-obvious packages. Unless of course they make me an offer under what I am willing to pay for everything.