I feel really, really bad both professionally and personally that satellite radio is going away. What? You say the merger will preserve the longest running alternative to the slowly dying, little choice over-commercialized terrestrial radio? I don’t think so!
No matter how this transition pans out, satellite radio will never be the same. Last week’s morphing of music and other radio content may do little to prevent the real fans of satellite radio from eventually walking away from the dial.
A few months ago, the Federal Communications Commission and other federal groups gave the final go-ahead to the merger of Sirius and XM Satellite- radio. They waxed poetic that these two companies may not survive the onslaught of other digital music/radio systems. Because of the new devices and the overall migration of radio and audio content to many other venues, this merger did not constitute a monopoly.
And realistically despite my use and admiration (along with 19 million others) of satellite radio, the alternatives including MP3 players, mobile phones with audio capabilities, HD Radio, Internet Radio and hybrid radio services like Rhapsody, Pandora, Last FM now offer plenty of choices that could be better and cheaper. And these alternatives could prove too much competition to make the merged companies a success. And eventually, the XM-Sirius combo may actually be forced to foreclose on more programming.
The Programming
In the merger, the smaller company Sirius wound–up owning the deal. In the last few weeks, many of the marketing and programming people were let go from XM radio…despite the fact they actually started this business. Even with Howard Stern and the NFL, Sirius never caught-up to XM’s subscriber total or unique programming.
Speaking of Stern, whose success almost saved Sirius, he will never earn enough advertising dollars to pay for his lucrative contract. While Stern denies it, don’t be surprised if his former home (CBS) reaches out to the shock jock. It’s not clear yet how many of the too-much-talk/not-enough-music programs will actually survive the merger. Officials from the company claim there will be a general toning down of the obnoxious DJs.
The music channels will fall along the lines of XM’s format - 40s, 50s, 60s, 70s, 80s and 90s. The new combined programming really doesn’t have a traditional folk music channel that would feature the likes of Joan Baez, Cheryl Wheeler or even John Gorka. I was told by Sirius that the Grateful Dead are folk music. There appears to be no difference between the oldies channel and the 60s channel. It’s apparent the classical channels are programmed by a computer with a limited memory. There ARE other composers beyond Bach and Beethoven.
Sources tell me that many of the programmers of other genres, such as rock and pop, were let go. That means different interpretations, fresh and new recordings, and the reason satellite radio was great are also out the door.
What about Subscribers?
Both system’s feeble attempts to convert each other’s listeners are being handled so poorly, subscribers are left in the cold. Recently several consumer surveys and focus groups conducted by private and public entities revealed that people are not signing up for either Sirius or XM when their renewals are due. This despite the fact they feel the $10-$12 monthly fee is fair. Sales through new car purchases are also expected to suffer mightily as the recession slows the auto industry in general.
So consequently, it’s not just one naysayer’s opinion that’s triggering a revolt in the subscriber base. I am and always will be a huge supporter of satellite radio, but myself and other radio authorities are now seeing and hearing some things from these services and their respective business and content practices that are alarming.
Regardless of Richard Sherwin’s view of satellite radio, terrestrial radio is dying and will continue to die as more and more people realize how great satellite radio really is. If ad revenue is continually dropping, there is a reason for this. Ratings must be dropping as well. Does that mean more people are driving around listening to CD’s or MP3 player? Quite possibly. Does it mean that terrestrial radio is losing listeners to satellite radio? More than likely. Reuters reported on ad revenue for radio stations:
http://www.reuters.com/article/entertainmentNews/idUSTRE4B287U20081203
The merger took away a few Sirius channels that I loved (the throwback rap station that played stuff from the 80s and EARLY 90s)......should have known something was up when the play list started creeping up in years over the past couple of weeks to the point they were playing songs that were only 6 or seven years old (not my definition of oldie) and as stated above the compression
makes all of the stations sound absolutely horrible. What good is “digital radio” when it sounds like AM? Sounds like Clear Channel all over again except now they are in space.
I have had XM for several years.. I just recently purchased 2 tuners for vehicle use.. Having a decent system in both vehicles, I can very badly notice the compression.. And with the recent channel lineup change, Im thinking of not using either tuner anymore.......... When music is so compressed it has no top end or bottom end and talk sounds “tinny”, its not worth even listening too anymore…
Digital A/V transmission has 1 very fatal flaw and just about every SAT/OTA digital transmission is suffereing from it - COMPRESSION!!!!!!! Just for the sake of more programing… Give me 20% less content and replace it with QUALITY!!!!!!!!!!! Maybe these markets would start gaining market presience instead of losing it
Don’t try to pull the wool over our eyes
This article is a spin article: Two satellite companies were losing money and struggling in the stock market while competing against one another. Finally after a huge effort to they managed to get approval for a merger that helps save the companies save money and benefits subscribers in that they get more programming at the same price (along with many other benefits). And the title of the article is? “The beginning of the end”
A more appropriate title would be along the lines of “A new beginning for satellite radio” because there is new hope for new benefits for subscribers.
Also, every statement in the article about “Howard stern” is wrong. Let’s start with this one:
“Speaking of Stern, whose success almost saved Sirius, he will never earn enough advertising dollars to pay for his lucrative contract.”
1. “Speaking of Stern, whose success almost saved Sirius”
Before he signed up Sirius had only 500,000 subscribers and was trailing far behind XM. Today Sirius had the most power and largely took over in the merger. Why do you think this is? Howard Stern is the reason Sirius was able to have more power in the merger, he did save Sirius.
2. “He will never earn enough advertising dollars to pay for his lucrative contract.”
True he won’t earn the advertising dollars, but subscribers are what pay for satellite radio, he barely has any commercials, satellite is known for having much fewer commercials than terrestrial radio. He brought in millions of subscribers, the subscribers alone without any advertising easily pay for his contract. This is why in his first year; he was given an 82 million dollar bonus, because the subscriptions he brought in made a complete turn-around for the whole company and maybe for satellite radio as a whole. Sirius became more powerful than XM thanks to all the subscriptions he brought in from loyal fans.
3. “While Stern denies it, don’t be surprised if his former home (CBS) reaches out to the shock jock.”
They HAVE reached out to him; Howard is not interested in going backwards. He was miserable on regular radio, especially after Janet Jackson flashed her boob at the super bowl, he became a target, and could not talk freely on the radio because he was under a microscope from the fcc and others. Now he is happier than ever, and can do the show he always dreamed of, gets payed more and is more appreciated for his contributions by the company than he ever was by his former bosses.
4. “It’s not clear yet how many of the too-much-talk/not-enough-music programs will actually survive the merger.”
Is this referring to Howard Stern? There is no place for playing records on his show. Talk radio is and always has been a very important part of radio, maybe some people only want to hear records; that’s fine, but if you think talk radio doesn’t have a huge place in radio that is a crazy position, many of the highest rated radio shows are talk radio.
5. “Officials from the company claim there will be a general toning down of the obnoxious DJs”
I have never seen or heard anything about this. I know for sure that there will be no general toning down of the Stern show. In fact, this censoring or toning down of the Stern show would result in my and many others cancelling their subscriptions. If you don’t want to hear curse words, don’t walk down the street, don’t go to R rated movies, and don’t put on the Stern show… Easy enough. I find the Rush Limbaugh show offensive, but I don’t want it toned down; I just choose not to listen. This is America, this is a paid service, and we do not want censorship.
Satellite will not fail because it doesn’t have enough John Gorka records on the air. This is a very biased, off the mark piece that tries to put a negative spin on satellite radio.
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i have to go with Vandenbroek on this one. internet radio is a major threat to both terrestrial and satellite. lower costs, larger reach, and an infrastructure that is growing exponentially every year. 5-6yrs down the road i wouldn’t be surprised if it was the most popular “format” for distributed audio (and video for that matter). i’m not saying the other mediums will be gone, just not the players they are today. in fact, i suspect terrestrial and satellite will expand their web offerings considerably in then next few years. most stations already are.