I just came across a piece I wrote in a 2006 edition of The Dan O”Day Radio Programming Letter.
During the Spring of 2006, I was certain I had seen a Sign of the Future…
I even shared my vision with the head of a big research company. He expressed doubt. Because normally he’s much more “ahead of the curve” than I, I found myself questioning my Big Insight.
I still believed The Sign. But I stopped sharing it with others.
This week, however, a big newspaper headline declared precisely what I had proclaimed months ago.
For a decade, people predicted the impending satellite radio revolution. It wasn’t available, but they kept telling us it was just around the corner.
The reason satellite radio is struggling in the U.S…
The reason XM and Sirius are certain to merge, I’d say within a year…
…has nothing to do with the anti-satellite campaigns of some terrestrial stations.
It is not due to the lack of availability of hardware (which soon will become standard in new cars).
The Satellite Killer — okay, the Satellite Seriously Wounder — is something that didn’t even exist six years ago:
The iPod.
I know my Sirius and XM subscribers will howl at this, but….
For all those years we spent waiting for the satellite revolution to Change Radio As We Know It, the big Unique Selling Proposition was:
“Digital quality, commercial-free music. All you can eat.”
Yeah, I know, now they have Sports and Talk and specialty programs. But that was their one big U.S.P.
The day an interface became available that easily connects an iPod to an in-car stereo system is the day that Satellite Radio — Well, it didn’t fall out of the sky. But it was forced into a much more modest orbit.
That was the big newspaper headline: “iPods Hurting Satellite Radio Subscriptions.”
So next year {Editor’s Note: 2007}, look for just one U.S. satellite radio company.
They’ll be able to consolidate the best programs under one name, and with the sudden lack of competition they’ll be able to raise subscription rates.
I wouldn’t be surprised if the satellite’s original “killer app” — the music — becomes a value-added aspect of their product line, as specialty programming becomes their primary listener magnet.
It’s nice occasionally to be right.
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A couple of years ago, my new vehicle came with a satellite subscription, just short enough to get me to extend it for a year. After that period, I didn’t renew, because I now had an iPod where all my music was encoded at a higher bit rate than the satellite station delivered, so it sounded a lot better, when traveling I didn’t lose signal in the mountains (or really bad weather), and I could program my own playlists. Still happier with my iPod.
Yet their subscriber base keeps growing. And I bought their stock about 2 years ago at 38 cents, and at 1:50 PM this 8th day of January, it’s at $3.10. I’m happy it hasn’t been the death knell of terrestrial radio (we’re doing it to ourselves) and I’m equally happy at it’s share price today.
And now they’re reducing bandwidth on less popular channels and even going mono on some. Yeah, that’s great quality for the dollar. And that’s why I let my subscription expire without renewal. Screw them.