The Failure of Satellite Radio

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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 it’s 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?

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33 COMMENTS

  1. Eric, You’ll love this kick in the head. So I am looking what my options are with regard to siriusXM in the new car. As I dig through the working side of the website (not the side that’s supposed to show me the deals I can get before the trial runs out) I find a pick your 50 stations deal for $8/month. Ok, I can live with $8/month, 50 stations is way more than what I listen to. I dig into the details… it requires a compatible radio… ok, what’s a compatible radio? Guess what? they’ve been offering this package for years but no OEM car radio supports it. It requires a new radio provided directly from… well you guessed it. And full price too… no reduction when ordering the “A La Carte” plan. And you get to butcher up a new car adding this tacky add on with what amounts to a second satellite radio.

    Clearly they know how to restrict radios to certain channels because they have different packages and premium channels. So I doubt it requires special receiving technology but rather how their server-side works.

    • The music channels are fine (and mostly commercial-free) but why pay for this when you can easily use an iPod or similar device to store thousands of your own music files and play them exactly as you like to hear them – for free?

  2. There’s always an underground if you look hard enough. I remember growing up and one of our local TV stations showed R and even X rated movies uncensored late at night. Supposedly it was owned by Johnny Carson, there wasn’t a critical mass of Kryptonite Clovers to stop it back then.
    Today if you’re fluent in Illegalnese, you can enjoy the rebroadcasts out of Buenos Aires, Mexico City, and Madrid on the local Spanish channels. Places where unapologetic men still walk the streets in broad daylight, and woman demand equivalent opportunity, not literal genderless sameness.

  3. We have had a ’66 MB 230 SL for 4 years and put only about 500 mi/month on her. Her Becker Europa original radio has never worked. I can’t bring myself to replace it with an aftermarket unit with USB on which I can place Mises Institute lectures and Rockwell podcasts. I love the sound of the inline OHC inline 6 with the ragtop up or down but in Winter with the hard top on it would be nice to hear old tunes.

    Thanks for the heads up on XM/SERIUS. I won’ go that route.

  4. Yeah, it amazes me how stale the programming is on XM. If cloud computing takes off, maybe we’ll one day be able to stream our home library via satellite? But honestly, I like to listen to the car and road when I drive. I think this is very unusual though.

    • Nope, that is not unusual at all. If it is, I’m a weirdo just like you. Well, actually I’ve had a lot of people tell me I am weird/strange too! I think they’re all weird/strange though. Weird! Strange.. Seriously though, I just removed the radio completely from my antique car and sold all the pieces. I like to just listen to car/road.

    • Nothing strange there. I like the sound of my engine so much I have only listened to the stereo twice in the last year.

      I just don’t feel like I’m driving when I’m listening to music; I don’t get the auditory feedback when I’m heel-and-toeing, I can’t hear it come “on-cam”, I can’t hear the tires.

      And most of all: I can’t hear my own thoughts with the radio on.

      Car stereos are vastly overrated. Tune out, turn off, drive on!

  5. Laptop has an HDMI connector which works very well. I watch what I want when I want. At least until SOPA is formally imposed. Same with music/talk radio.

  6. Plugged my mp3 player into my truck’s stereo via an adaptor. Listen to my custom playlist only. No commercials, ever. Sometimes drive in silence. Nice.

    Cancelled cable. Could not stand that cable channels had longer commerical breaks than did the old broadcast networks (yes). Have basic service only now: ch 2-13 & QVC. Still at rip at $15/mo., but wife and daughter “need” CBS and PBS.

    Won’t ride the Suzuki with music playing. My sole refuge from modern media, it seems.

    • James, Dom – I’m with you guys. I put a stereo in the Miata with a USB port. I download podcasts and audiobooks and listen to them on my commute. Or I just enjoy the silence and time to think.

      As far as video entertainment goes, I find great deals on DVD’s at yard sales, pawn shops and flea markets; usually less than I can rent them for. So I have a tremendous video library. I have no qualms about taking the trash back to the local pawn shop and trading it in for something I do want. It’s nice being at the age where I don’t care if a movie is two years old (or more) before I see it. It’s even nicer picking them up for two bucks apiece.

      Satellite radio, TV and cable can die of natural causes for all I care. The PTB just need to keep their grubby effing mitts off the Internet!

  7. Tried satellite for a year mostly for Stern. Cancelled this year because the show is only on a few days a week now and my smartphone has replaced the radio for me anyways. Between plentiful radio apps and a podcast aggregator I’m never really without something to listen to.

    • I think they made a mistake focusing on Howard so much as an attraction and then agreeing to reduce his show to only three per week, recycled over and over and over again. I don’t blame Howard; he got a great deal and, at this point in his career, he’s probably is tired of working every day of the week or even five days a week. But they need other content, then. Not just filler. And there is a lot of filler on SiriusXM. That’s in addition to the commercials.

      • Couldn’t agree more. Unique content is king now more than ever. When I used the service there really wasn’t one other show or channel that I felt was worth paying for. Especially when you have to sit thru so many commercials as well. I’ve read and heard that Howard brought millions of subscriptions and I’m curious to see how Sirius fares when he retires.

        • Yup.

          I suspect they’re already having problems because he’s partially out the door – doing just three shows a week now, I think.

          They may not realize that it’s talk/entertainment (not music) that is their future. There are things called iPods and music storage hard drives in cars now… a few good hosts/channels could get me to sign up, if they were commercial-free. But I am not paying to hear 40-50 percent commercials – or even any commercials at all.

          • They need to put Alex Jones on satellite. Of course, people don’t pay for it now, so why would they pay to hear Jones on XM or Sirius?

            • I might – because I’m in a car a lot (and so, away from the computer). But the god-damned commercials have got to go. I’d happily pay twice the current monthly subscription if it meant commercial-free programming. I would not buy a magazine that was 50 percent ads; I would not buy a book that had an ad every third page. And I won’t pay for radio that is half ads, either.

              The key is to tighten up their lineup. Get rid of the shit – and there is a lot of shit. Hire a few genuine talents that people would pay to listen to. Then nix the commercials.

          • Funny thing is ‘coast’ is only available on the XM side and I don’t think Jones is available at all. For sirius there is nothing but ‘safe’ mass media choices. Bah. I don’t listen to that crap when it is free.

    • The thing that amazes me is this: Like the TSA Gropes, most people accept paying an outrageous monthly fee for what is (mostly) crap they don’t want and commercials.

      No one would put up with such a thing from, say, Netflix. Imagine if instead of being able to order the DVD you wanted (and just the DVD you wanted) or the online feed, etc., they made you buy a “bundle” or “package” that included two or three other DVDs/online feeds of shit you weren’t interested in – in order to get the one thing you id want – and all of it was liberally salted with 40-plus percent commercial ads, too.

      But that’s exactly what cable does and what SiriusXM does, too – and people are still bending over to take it.

      • I was thinking about this idea – Most people need Satellite for road trips or something like that. If I was sirius/xm, I would allow people to buy one-use cards with numbers that they could key into their radio. They would expire after a week or something like that. They would make more money on that then subscriptions. I even suggested it to them.

        It is unlikely that they will ever try it. It makes too much sense.

        • Agreed.

          The sad thing is there’s an abundance of excellent talent out there they could hire for not much (because it would be part-time work in many cases, as in doing an hour or two show once a week) as opposed to paying for crap like Oprah’s rebroadcasts that almost no one wants to listen to.

          Imagine being able to listen to blocks of, say, AlexJones, Lew Rockwell, Judge Napolitano (and so on) without any commercial interruption. And without also having to buy literally 40 or 50 channels of shit you never listen to.

  8. The free trial for my new car is up soon. So I grab the letter they sent and go to the url. Enter my info. It rejects it. Try another browser, rejects it. Try logging in my online account.. can.t get from A to B. try the URL multiple times and it keeps rejecting my info saying to call.

    I haven.t heard any commercials but I hate broken websites and don.t want to call to wait on hold to talk to some call center drone who is going to try to sell me. The price in the letter is far too high anyway. Especially given the inflexibility of their system regarding additional radios. Their plan structure assumes that someone is going to be listening in the car 24/7. Mine isn.t even a daily driver.

    A reasonable system would allow multiple receivers but only one could receive signal at any given time. If they can ESN protect receiving the signal, they should be able to make it so only one radio worked at a time, even if it.s a manual switch in website account.

    If they send me another letter offering the service at a much lower price and their website works maybe I.ll get a subscription. Otherwise I guess the trial will end and I.ll be using the USB stick for music.

  9. Ranting is a wonderful stress reliever, and it creates lots of words for blogs.
    In the end, Sirius sells what they want to sell and we buy what we want to buy.
    There! After all that stress relief, shouldn’t we all be happy that Sirius gets to sell what they want to sell and we get to tell them where to shove it (or give them money in a freely undertaken exchange for their service)?
    Had it for a year about two years back, at least it was cheap. I walk to work now.

    • I’m not arguing about the buying and selling part; merely stating that I think the service is based on a bad business model and could be so much better. For them and us.

  10. 2 reasons sat radio is a failure:

    1) Our worthless FCC failed to define a technical standard. Normally I’m all in favor of letting the market decide what the best standards are, but in the case of a duopoly, there’s no way the marketplace can test different standards and figure out the best. So you looked at the programming and tried to figure out what you wanted. Sirius had football and Stern (who isn’t funny/edgy when what he’s doing isn’t violating any laws), so they got more people in the store.

    2) Programming. For the most part it’s terrible. Sirius paid big bucks to the NFL. XM (when they were their own company) paid big bucks to MLB and NHL. I can count on one hand the number of times I listened to football on Sirius and I don’t think I’ve ever listened to a baseball game on XM.

    I’ve had both, and no longer have either. I started on Sirius, the crappy radio broke before my contract (another problem) was up. I always noticed a lot of digital compression artifacts, but I overlooked most of them because it still sounded better than most FM stations. But then XM introduced a nice small pocket unit I could use when skiing so I switched. XM had much better sound quality (I could listen at home without being distracted by artifacts) and really interesting music stations. I discovered a lot of music I never would have heard listening to XM. But then they merged and one morning all my favorite stations were gone. Literally every station I regularly listened to was eliminated by Sirius. The ones that were left had the same lousy sound quality of Sirius. So I just left my contract end.

    It seems to me that if people can make money podcasting, there’s something inherently wrong with the sat radio business model. I think it has a lot to do with going after the same old programming, with it’s outrageous costs, and desperately trying to get the same audiences that everyone else is going after. I was happy to pay for good music programming, but there’s no way I’m going to pay for 40 Clear Channel level stations.

  11. Couldn’t agree more! I just let my subscription run out for exactly these reasons! I love the Mike Church Show and up until now it was the only reason I kept the thing on…..but I cannot stand all the commercials and I thought to myself, why am I paying for the damn commercials? It’s BS. When SiriusXM called me to ask for my renewal I told them I was tired of paying for commercials and channels I didn’t want. They had no answer except for “sorry you are dissatified with the service, you know if you switch to automatic payments with your CC you can save $10 on your first billing.”
    Yes that’s what will satify me….paying ten buck less for commercials on the first bill. Where do I sign up?

    • Mike Church! He and Mike Slater (once a week: on Sunday mornings) are the only guys I like to hear on Patriot, anymore. I’m tired of all the neoCons who go so far out of their way to bash Ron Paul. It’s sad, but I hang on just because of these two guys. It’s sad that they don’t have more Austro-Libertarians on there.

      I ought to sign up for Mike Church’s 24/7 and simply drop satellite radio.

      • Hey Mark,

        Agree. The panoply of neo-cons on satellite (and everywhere else) is nausea-inducing. I especially loathe belligerent old fatsos like Neal Boortz and Rush Limbaugh – who of course are also chickenhawks, just like Newtie and Mitt and Santorum.

        I wish Paul had brought Jesse Ventura on board as his VP. You’d think Paul’s service record would silence the effrontery of the neo-con puppets. But, no. Paul is too decent and soft-spoken to go head to head on that issue. But Jesse would. I yearn to hear him stomp Newtie and the rest of them in the same way he stomped Hannity and (earlier) Dickhead Cheney.

        More, I’d love to see Newtie, Billy Kristol and all the rest of them suited up in BDUs and air-dropped into Tehran to “fight for freedom.”

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