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Satellite Radio: Tune In or Turn Off?
Satellite radio has been a technology in the making for many years now. In 1992, the Federal Communications Commission (FCC) assigned part of the S-band (2.3 GHz) spectrum for nationwide broadcasting of a satellite-based Digital Audio Radio Service (DARS). In 1997, the FCC granted American Mobile Radio (now XM Satellite Radio) and CD Radio (now Sirius Satellite Radio) broadcast rights over that band. After several years of tinkering, courting investors and partners, and lining up their content these two companies are poised to finally make satellite radio a reality.
The Players
XM Satellite Radio (NASDQ: XMSR) and Sirius Satellite Radio (NASDQ: SIRI) paid an estimated $80 million each for their exclusive distribution rights to satellite radio. With numerous industry partners and investors these two companies are hoping to become the next giants of the media world.
Washington, D.C. based XM Radio launched nationwide service on November 12, 2001, after two months of regional service. XM Radio currently offers 100 channels (71 music and 29 news, sports, talk, and children's programming). XM Radio has exclusive content relationships with C/NET, NASCAR, and others. XM Radio's most notable auto industry partner is General Motors. Cadillac now offers XM Radio standard on all new 2002 Sevilles and Devilles. XM Radio's service is available for a monthly subscription fee of $9.99.
New York City based Sirius Radio plans to launch their service in Denver, Houston, and Phoenix on February 14, 2002. A Sirius Radio spokesperson told Saltire that their service will be available nationwide by the third-quarter of 2002. Sirius Radio also offers 100 channels (60 commercial-free music and 40 news, sports, talk, and entertainment programming). Sirius Radio has exclusive content relationships with NPR, Hispanic Radio Network, and National Lampoon. Sirius Radio also has exclusive partnerships with DaimlerChrysler, Ford, and BMW. Sirius Radio's service is available for a monthly subscription fee of $12.95.
Although XM Radio and Sirius Radio have their distinct differences there are however some things that that they both share in common. Both services offer similar music channel genres. The big difference being that all of Sirius Radio's music channels are commercial-free as opposed to only about 30 such channels on XM Radio. Both services also share several news and entertainment providers like Bloomberg, CNBC, CNN, ESPN, and the Weather Channel.
XM Radio and Sirius Radio have also partnered with many of the same manufacturing partners including Alpine, Clarion, Delphi Delco, Panasonic, Pioneer, Sony, and Visteon. One very exciting product is Sony's "Plug and Play" DRN-XM01 model that works in both your car and home stereo system through the use of a $150 adapter kit. The two companies have also teamed up with similar retailers to help distribute satellite radio receivers, antennas, and other devices. These retailers include Best Buy, Circuit City, Crutchfield, Good Guys, and Tweeter.
Just The Facts
According to the Radio Advertising Bureau, 75% of all Americans age 12 and up listen to radio daily, and 95% listen every week. But their choices are almost always very limited. Consider the fact that more than 22 million listeners receive fewer than five FM stations, and the communications industry firm Veronis, Suhler & Associates noted that 50% of all existing radio stations only use one of three programming formats (Adult Contemporary, Country, and News/Talk/Sports).
In many cases, huge segments of the music industry get little or no coverage by mainstream radio. One study indicated that up to 21% of annual music sales come from these totally ignored formats. This is especially true of ethnic music formats like African, Asian, Caribbean, or Hispanic. Combine this with the fact that more than 105 million listeners live outside the 50 largest radio markets and you quickly realize satellite radio's potential appeal.
Too Much Information
XM Radio uses two Boeing HS-702 satellites that are positioned over the East and West Coasts of the United States. The satellites, aptly named "Rock" and "Roll", maintain a geostationary orbit at 22,000 miles above the earth. XM Radio has a third back-up satellite on the ground should something go wrong in orbit.
Sirius Radio uses three Space Systems/Loral 1300 satellites in a high altitude elliptical orbit. Sirius Radio contends that this ensures that each satellite will spend about 16 hours a day over the U.S., and that at least one satellite is over the country at all times. Sirius Radio also has a back-up satellite standing by just in case of problems.
Both companies transmit their signal on the S-band, at 12.5 MHz to radio receivers on the ground. Sirius Radio will use the in the 2320.0 to 2332.5 MHz frequency band. XM Radio already uses the 2332.5 to 2345.0 MHz frequency band. They will also use repeaters in urban areas where buildings and other obstructions may interfere with signal reception.
One On One
Saltire interviewed Chance Patterson, XM Radio's Vice President of Corporate Affairs, to get his take on satellite radio.
- Saltire - What are some of the key differences between XM Radio and Sirius Radio?
CP - The biggest difference is that we have a fully developed and deployed system. We have a proven product that's great, and we developed the system with a retail focus, not just limited to the car. But we're not just an audio service. We've recruited the best people in the industry. These people really make our content come alive.Saltire - What will it take for XM Radio to succeed financially?
CP - We figure that we need 4.5 million subscribers to be profitable. There are more than 200 million registered vehicles in the United States. So we need less than 2.5% of all cars to reach that figure. And this doesn't take into account people who only use it in the home. We think the demand is definitely there.Saltire - How important is the auto industry to XM Radio's success?
CP - They are a part of it for sure. We have a full OEM (Original Equipment Manufacturer) system. We have partnered with GM, and they are also an investor. Right now Cadillac models already have the system. Over the next year more than 20 GM models will have factory-installed units.Saltire - What does satellite radio mean for listeners?
CP - People are spending more time in their cars and they want to be informed, and they want to enjoy that time a little more. XM can do that. If you're listening to the reggae channel you should feel like you're in Jamaica. It's really point-of-view radio.Saltire - What does satellite radio mean for traditional radio?
CP - XM doesn't disenfranchise AM/FM. Terrestrial radio will be forced to get better. Talk to the audience like they're older than 12 year olds. Talk to me about the music. Talk to me about the world when [the song] was written. That's what listeners really want.Saltire - But will people really pay for satellite radio?
CP - People said they'd never pay for cable television because TV was something they already got for free. Look at how that turned out. We're going to do the same thing for radio. The difference is that we already have all of the infrastructure. The one-millionth subscriber doesn't cost more than the first one. We'll offer better quality, less commercials, and more choice. We believe people will pay for their passions.
Word On The Street
Saltire solicited the unfettered opinions of individuals in the technology, radio, and automotive industry.
- What do you think satellite radio means for advertisers?
"I think it can potentially be very good for advertisers. Specifically, by dividing the content available into so many categories, advertisers can probably make better assumptions about demographics. For example, XM Radio offers a dedicated NASCAR channel, dedicated BlueGrass channel, etc. The targeting is more granular than conventional radio where most stations do a little of everything, music, news, weather, traffic, etc. This should translate to more effective advertising potential for advertisers. That said, some of us are and will be willing to pay for commercial free options - I sure am." - Jason Foodman, technologist and Vice President of Business Development, Aladdin SystemsWhy do you think satellite radio has the potential to be a big success?
"Abetted by the Telecommunications Act of 1996 that relaxed ownership restrictions and made possible the creation of media behemoths, conventional radio programmers unwittingly sabotaged their own stations through pernicious cost-saving programming trends such as corporate-level programming, format duplication and computer automation. The result: bland, boring, sound-alike radio stations from town to town, up and down the dial all across America, which drive away listeners in droves. That's good for satellite radio services like XM and, soon, Sirius, since listeners may eventually find their way to satellite radio." - Michael Saffran, radio industry veteran and Senior News Specialist, Rochester Institute of TechnologyWhat does the auto industry really think about satellite radio?
"Everybody in the automotive/telematics value chain is excited about it. Well, maybe not everybody, but I've just been doing some interviews on a satellite based telematics project, and everybody I've talked to at OEMs, Tier 1 suppliers, cellular carriers, really likes the idea of satellite radio. I get the feeling they want this to work, if only because it lets them get a foot in the car door with subscription-based services." - Thomas R. Elliott, Vice President of North American Consulting, Strategy Analytics, Inc.
The Bottom Line
Both XM Radio and Sirius Radio agree that the market is big enough for two players. But as both services ramp up they need to find a way to stay in business. XM Radio recently reported a third-quarter '01 net loss of $70.8 million. Sirius Radio reported a net loss of $57 million for the same time period. XM Radio just announced financing to operate its business into the fourth-quarter of 2002. Sirius Radio has also publicly announced that they have enough cash to last until the fourth-quarter of 2002.
To succeed both companies will need the support of the auto industry, and quickly. Getting satellite radios installed as standard equipment will help to build their subscriber base. The current $300 to $400 conversion cost might be a bit too steep for most consumers. Also, current receivers only support a single format (XM or Sirius). Future AM/FM/XM/SR models should also help boost more widespread usage.
Finally, there is enough content overlap to keep subscribers to either service happy. Perhaps the biggest decision is whether or not you want ads with your music. Sirius Radio's commercial-free music service can be yours for just $3 more each month than what XM Radio charges. The immense variety of music and other content should be a big hit if consumers can just find an easy way to get their hands on the technology. And reports of its CD-quality audio can only help to increase satellite radio's popularity. I'm still waiting to hear it for myself. Stay tuned.
i live in a very remote area of western new mexico. the only local radio is in navajo. you can get one or two bubble gum stations from gallup. before primestar, i had to listen to the bbc on s/w for news.
i'm ready.
Commercial radio sucks big time.
pronoblem
Five years ago, this would have been the coolest thing in the world. Imagine being able to commute in the morning an listen to music instead of a pair of DJs chatting. Sure, you could pop in a tape or CD, but that can be a pain.
Now, it's not quite so interesting. The early adopters have been, at least in part, co-opted by car MP3 players. If I had a long commute, you can bet that's the direction I would invest my car audio dollars.
Of course, there is still a significant market for them, but it's just a little harder to get people excited about it than it would have been a few years ago.
For this reason, I'm guessing that satellite radio receivers would be a big hit in Ryder/UHaul trucks. It would also keep them from having to reprogram the radio settings at every location.
Hate trolls? Troll 'em back...at home!
I would love this if they were broadcasting in digital radio. It would be cool to be able to have song titles listed, have the quality of digital, be able to search for a particular type of music or song being played, etc. If it is just analog then I'm not so sure if it will take off.
Sapere aude!
So car manufacturers want to adopt practices of other industries? I find it hard to believe that there's a great consumer need out there for car-delievered subscription services, since the vast majority of car owners spend such a limited (if regular) time in their cars that it doesn't offer the value DirecTV/cable/DSL/etc offer.
Further, the car's considered a big, expensive appliance, like a washing machine -- customers aren't going to spend extra monthly over the life of the car for something like leather seats. I think the potential market the car makers are trying to tap into is extremely limited, but look towards their attempts with fear.
-- q
I will not pay $10 a month for the 'right' to listen to more commercials. I pay $40 a month for internet, and get spammed from them. I pay $80 a month for Directv, and get more "special offer" channels instead of more movies in DD5.1 GM's OnStar deal, more cost the car, and when your 'free trial' runs out, there's another monthly fee, otherwise, you paid for some electronic gizmo in your new GM car that won't work in 5 years, and another route for more spam, crammed down our throats, on systems that WE are paying for.
And don't give me that garbage about "your monthly fee only covers infrastructure costs, someone needs to pay for content." I don't buy that for a second, if I pay for a service, don't cram ads down to consumers. That's why I am using a pay service to begin with.
This doesn't offer me anything that I don't get with free FM (which is financed by commercials, fair tradeoff). CD quality? Big deal, I can throw an mp3 player in my car for cheap these days.
They will fail and blame "poor market conditions" or have some other excuse for not making money. Funny how noone says "We didn't use common sense" as an excuse.
For me, one of the joys of long car trips -- like DC to Boston, or DC to Denver -- is scanning for interesting local radio. Especially weird local talk radio. Same sattelite radio stations, coast to coast? Boring! No sattelite radio for me!
- - - -
The real Tetsujin 28 is a giant robot.
Nope - from XM's customer agreement:
That's $30 a month - no way in the world am I paying that - sorry.
Top Most Bizarre/Disturbing Error Messages
You couldn't be more wrong. I think that the analogy to cable television is right on. Your MP3 collection is static and it is something that you have to maintain. Why not sign up for something dynamic, fresh, and engaging?
Do the same FCC decency rules & regulations apply for satellite transmissions as they do for AM/FM? It would be sweet to listen to uncensored talk radio (imagine what Opie & Anthony could do on the air....). I think that would be the killer app for satellite radio.
In retrospect, XM should have really considered a smartcard system like that of DirecTV. Those are crackable but they are a lot more difficult. Putting the authenticator on a damn EEPROM chip was just a stupid move, and it is certain to result in large-scale piracy.
~wally
I have an hour commute every day. Combined with the occasional roadtrip, and I like having XM. When you add in the total suckiness of radio here in Kansas City, where we have one "All Pink Floyd, All The Time" station, one "Classic Rock" station and a whole crapload of Britney stations, some "Easy Listening" stations. No alternative. Not even any modern rock. They all suck.
I've got the pioneer equipment. It works well, it doesn't cut out, it sounds great. There are lots of stations with lots of different kinds of music.
I got it installed right before an 18 hour road trip. There's nothing like having music piped in for 9 hours at a stretch with no commercials and not having to change stations because "Another Brick in the Wall" came on AGAIN.
(Pink Floyd put out 20+ albums, why do radio stations insist on playing The Wall over and over and over again?)
The installation is painless, very similar to installing a remote CD Changer in your car.
Things I wish they had: Some kind of smart-card-ish way to bring a receiver into my house that doesn't cost as much as Sony's solution.
I'm very happy with the system right now.
-rs
Note too that until the advent of cable TV, "the whole world" (except Britain) had "NEVER paid for TV". Cable changed that.
Given a choice between indirectly and directly funded radio I can't say I know whether enough consumers would choose the latter, especially if it requires special equipment. But given time, and given radios that have the additional functionality built in, that may be a matter of time.
You are not alone. This is not normal. None of this is normal.
I think an important market for satellite radio will be immigrants to the US. just as an example, is there a good Chinese, Russian, Hindi, or Portuguese language broadcast station in your area? Probably not. Are there a lot of people in the US who speak these languages as their mother tongue? Sure. I bet plenty of these people would appreciate being able to pick up syndicated news/talk/music from home.
Just capturing part of that market will set set satellite radio well on its way to the customer volume it needs for viability. These may seem like niche markets, but the cost to provide services like these should be low. The volume will make the receivers cheap, then the market will grow.
Sig?
Sigue Sigue Sputnik!!!
I'm becoming progressively disturbed at the number of companies trying to get into your pocket every month. Fair-use as we know it for almost any device seems to be going away, and NONE of it is customer-driven. Look at the trends.
Soon, you will pay monthly for your software (Microsoft - others will follow suit), radio (XM/Sirius), music (online music services that give you access to large song catalogs but remove all access to music when you cancel), movies (divx tried to start it, big $$$ is picking up the idea now), books (M$ vision for e-books w/ DRM), video games (Final Fantasy XI), web sites....
What was wrong with existing revenue models? Just because companies like Microsoft were incapable of creating software worth the cost of updating, it screwed up their revenue predictions.... Why should consumers get screwed just so a company can predict their profits more accurately? Why can't I just buy something and own it anymore? I can't tell you how much this pisses me off.
What's the common thread here? Huge footholds in the industry or sanctioned monopolies (MPAA, RIAA, M$, XM/Sirius). Preach all you want about speaking with your dollars, but that only works while you still have a choice. What happens when we don't have access to the alternatives any more because of coersion of distribution channels, anti-competitive practices, and purchased legislation?
Seen any BadMarketing lately?
I'd have to agree with the sentiment posted earlier that, given the existence of large capacity MP3 players, the XM radio is merely great technology without a practical use just yet.
Let's examine the details:
1)Price
XM - $150 installation min. + $10/month
NOMAD 20GB - $300, car adapters maybe $40 on top max
So if you use it for 2 years the NOMAD is already better financially.
2)Content
XM - 100 commercial free channels and news
NOMAD - Anything you want
The only disadvantage of the nomad is the lack of news, but being able to load it with your very favorite songs and customize playlists, or have random playback, etc. makes it a winner when you consider that news is something you can get on a standard FM or even AM radio.
3) Ease of use
XM - Nothing required
NOMAD - if you get a car adapter then nothing required, else must monitor batteries. But car adapter mentioned in price above
So XM wins by a hair here..
4) Reliability
XM - Normal satellite transmission is easily disrupted by bad weather.. I would not be surprised if it wer the case here
NOMAD - Quite reliable but maybe slighly more risk of mechanical failure.
It's a tie here.....
For me, the ability to customize content makes a hard drive mp3 player a "killer app".. I currently have the smaller nomad and it has become my best friend.
That doesn't stop me from wanting satellite tv over cable though.. the picture is soooooo beautiful!
I bought XM Radio and put it in my car last month on a trip across the southern US. After driving from Yuma to Tucson with no decent radio reception, I broke down (not literally) and got it installed at Circuit City in Tucson. I then jumped back in the car and drove home to Florida. Not once did I lose the reception and I was driving through mountains, storms (remember last month's huge Texas thunderstorms?), and large cities (Houston, etc). I also livein Florida and it rains here often and I have yet to lose the signal. For those who don't know, the signal is also buffered by several seconds which keeps it from dropping out. It works great. The music selection is great. I can tell very few people here have actually researched the music offerings. The stations with commercials keep them short and under two minutes and you're back to the tunes. It beats the ten minute traffic updates, announcements, and lame car commercials on regular radio. They have independent stations in addition to regular stuff and have three great comedy stations. All the stations are also uncensored for those of you who like that sort of thing. Considering many of you don't hesitate to drop hundreds of dollars into computer and stereo equipment, I'm surprised you are complaining. Ten bucks a month is paltry compared to what you get with this. I got the Sony portable and you can listen to it at home after work. It is the best. Bob
Quote:
"I can't see myself investing in an XR or SR tuner when I have already put money into my car mp3 player." and "such as playing pirated audiobooks."
While I am definitely an advocate of a radio system where the quality is near cd (read - good as minidisc...) and there are more channels to listen to, then I'd be good to go. Except people do like the free things, and while I hate commercials as much as the next person, I'm sure that at some point they (the first ones to implement such an infrastructure) have ongoing bills as well.
I probably won't buy into it (because of the subscription model), and I'm sure many people on this site won't either. If it's easier and cheaper to get plain-old-FM, why spend hundreds more (initial year cost?). Quality doesn't win everyone over.
I know this is a rant, but why hasn't anyone instilled a scheme where something lossy (mp3? vbr?) can be "streamed" to the radio? I understand that you can't do any sort of handshaking etc., but you could do something such as retransmitting the same 5seconds of audio within a 1sec time period, for 5 seconds, then send the next 5 etc. Sort of for a buffer, and to make sure that you don't drop any music (except for under the harshest of conditions)...?
Karnal
I love to listen to C-SPAN and NPR.
XM has C-SPAN.
Sirius has NPR.
Neither has both.
And I'm sure that's just the beginning.
So would I have to get both to get the content I want? Is it even possible to use one receiver for both? If not, then what if a third network starts up with content I want, instead? A fourth? A fifth?
I want satelite radio for sports. I like sports. Especially the Green Bay Packers. I live in Charlotte, NC. It's awfully difficult to listen to the packers in NC, unless of course they happen to be playing in NC, and then I just go the game. About the only thing that satelite radio provides me that I want is access to my favorite sports broadcasts no matter where I am in the country. That is, by far, the biggest selling point to me.
But I'm not going to get it. I am just not going to pay anything per month for this. There is no way that they're going to remove commercials from sports broadcasts. So I'm going to be paying someone to advertise to me? I think not. But even more important than that is the idea of the incremental infrastructure costs.
The reason that I pay for cable service to my house is because it actually costs the cable company extra money to run the cable to my house, and to continually maintain it. I pay for internet service because in order for me to get that service, I have to pay the additional infrastructure that allows me to connect to it (modems, bandwidth). So the more subscribers that a cable company or an ISP has, the more infrastructure that company requires. Thus there is an incremental cost associated with each additional customer that they have.
But this is not the case for broadcast providers. If 10 people listen to a broadcast or 1000 people listen to a broadcast, it costs the same amount for the broadcaster. Basic calculus: as the number of listeners approaches infinity, the cost per listener approaches 0. (Yes, yes, I know the number of listeners is finite.) Or put another way the incremental cost per listener is nothing.
So with no incremental cost per listener, the value of the service comes from getting lots and lots of listeners. In the cable and ISP world, lots of subscribers are good, but they also impose an additional cost per subscriber. But in the broadcast world, once you've put up the basic infrastructure, you want as many people to get that service as possible. Your costs are finished, so remove as many barriers as possible. Why? So that you can then turn around and tell advertisers that they can reach 275 million people (i.e. the entire US) with your service. If you put up barriers to entry for your listeners, you weaken the value of your advertising real estate. Why do the TV networks love the superbowl so much? Because 1 billion viewers is *very* expensive advertising real estate. TV networks make a killing on the superbowl. Advertising real estate is seriously valuable stuff.
Satelite radio and TV have such an oppurtunity to have the highest priced advertising space in the world. But they're squandering that oppurtunity by charging listeners/veiwers for their service. And why do they do that? Because their investors are simply not patient enough to be able to wait for returns on their investment. The cost of putting up satelites for these services is very high. But even so, it's a fixed, one time cost. What you want is to put that against ongoing, and increasing income. One strategy is to charge $x per month to the listeners. But this is short sighted. It does provide ongoing income, but it's hard to increase it without losing sources of that income (i.e. every time you increase the cost, you lose some customers).
The other option is to give the service away to listeners/viewers, and then charge advertisers for access. As the numbers of listeners/viewers increases, your advertising rates can also increase. So fixed cost, balanced by ongoing, and increasing income.
The problem, of course, is that the investors can't wait long enough for the satelite companies to build up their viewers. They want their returns and they want them as soon as possible. What they fail to see is that the demand for that immediate return is resulting in building businesses for which people will not subscribe. And, as a previous poster mentioned, when these companies fail, they certainly won't say it's because we had a bad plan.
Too bad. It's a good idea, ruined by impatience.
Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.
The BBC is not a government entity
You're right, I stand corrected.. but...
the government's sole involvement at all is it had the right to appoint members of a group of governors, who are chosen apolitically. The BBC's independence is considered important.
And I argue that the Beeb is closer to the Gov't than most independent companies. They held the exclusive rights to broadcasting in England until about 40 years ago. On paper it may be independent, but for the sake of what we're taking about its a lot closer to its gov't than the likes of XM Radio.
This is about the British Radio licence, not about the TV licence.
True, but its still analogous to the system for radio 40 years ago, except now they never got rid of the TV license when they allowed independent TV into the market. The British pay the TV license for the same reasons they paid for Radio: as you said IF THEY DIDN'T WANT TO PAY IT, they didn't have to, but they wouldn't be allowed to receive radio either. They lose the right to own a radio outright. You may technically have a choice, but for all intents and purposes unless you want to live in a cave you pay. It is similar today. You don't pay the license, you can't own a TV, regardless of whether you watch BBC or not.
And the radio licence was abolished once non-BBC radio channels became available in the UK.
In which lies the problem. The BBC had a monopoly on radio broadcast. You either pay and listen to any radio (even if you wanted to listen to foreign stations from across the channel) or you didn't pay and listened to nothing. Yup, I was wrong calling it a tax (I always thought it was. The damn bill showed up and the gov't would throw you in the clink if you didn't pay) but for all intents and purposes it was. Own a radio, pay the licensing fee. Sure, you're paying for the BBC's content, but by gov't mandate it was the only content you could receive from British soil. Not exactly the most free of markets.
Which was my point. People in the UK didn't pay for a radio license for the same reasons that people are going to pay for XM radio here. There, the only choice was either pay the license or lose the right to hear ANY radio (which was the prominent means of mass communications of the time).
So - let's say your analysis is spot on. Current business charges subscription, not enough people sign up, company goes bankrupt. Then what happens?
I think exactly what happened with Iridium. The satelites are still in orbit. Somebody will pick them up out of the bankruptcy proceedings for pennies (probably fractions of pennies) on the dollar. This new company will only have ground crew maintenance & programming costs as overhead - not interest payments on the monsterous debt incurred during launch. Suddenly, it's very easy to make money on advertising alone - or at least convince investors that you will be able to do so.
The moneybags behind these first two companies will be screwed (much like Motorola for Iridium) - but the US will have free satelite radio.
There's a book I recall hearing about called The Age of Access by perennial techno-worrywort Jeremy Rifkin. In it, he postulated that we were moving toward a new phase in capitalism, where the relationship of people to property would shift--essentially, the rental model would become the norm rather than the purchase model. More and more of "your stuff" would really be the company's stuff, with your terms of use dictated by their licenses.
And when you think about it, the idea really doesn't even require government intervention--in fact, the less government regulation there is, the better it works out for the companies. After all, what they're rewarded for is simply steadily increasing profit. We like to think the free market dictates the way that they'll do that is by offering the best possible service at the best possible price, but other good ways to increase profit involve buying up your existing competitors and increasing barriers of entry to new potential competitors. (If your competitors have enough of the market share and enough "exclusive" deals or single-supplier contracts with your potential customers, you're not going to have the resources to compete if you're a startup.)
So, really, what's wrong with existing revenue models is that they don't offer as much of a chance for "customer lock-in." This is one of those interesting paradoxes about a market: it works really well as long as the playing field is level, but the most successful players will always have as their goal tilting the playing field in their favor--eliminating competition in any way possible.
This is, of course, why games have rules. And it's why markets are regulated. Whoops, we don't like regulated markets anymore, do we?
Hmm.
So with this economic analysis in mind, exactly how much does the price of putting up a satellite have to drop before a company will start broadcasting radio channels for free. And even more importantly, when will a company like DirectTV start broadcasting their commercial channels for free. Wouldn't a regular cable channel like comedy central be willing to take some of their revenue from commercials and pay a satellite company to broadcast their signal nation wide for free. If they did this, wouldn't their user base would sky rocket enough to cover the cost
Brilliant! (+1,Insightful - virtual moderator point)
Of course, I never intended my argument to include premium channels. Premium (i.e. non-advertising channels) have to be done on a subscription basis, since the primary value they offer is to the subscriber (no commercials) instead of to the advertiser (lots of eyes/ears).
All I want is to be able to hear my favorite sports teams from anywhere in the country... for the price of my having to listen to advertisements. You can have your prem channels, and I can have my sports.
Like I said: Brilliant!
Key to financial independence: Spend less than you earn. Save and invest the difference. Do it for a long time.
Signal and quality is great! I have a Sony receiver (the silver and purple one) in my 2001 Honda Accord. Signing up online took me about 15 minutes, and it took another 40 minutes to drill the mounting bracket in and install my antenna inside my car by the back window cleanly (that was at night)
What a treat it was when I got it working. A majority of the good channels are unfiltered (cussing, racial slurs and various other profanity) is allowed if you are into that thing. The DJs are moderately cool.
Service is great. Only complaints I have are with the Sony deck, and they are: 1. Not enough presets, 2. Backlight and the LCD suck and will cause accidents if you attempt to read it while driving, 3. No direct station access on the remote (just presets, who thought of that?) The only places I've ever lost service is when you are in bumper-to-bumper traffic on the Highway and you pass under a bridge. If you are going at least 50, you won't lose your tunes. Also, the overhangs at gas stations will cause your radio to chunk out "No signal".
Thought I'd pitch in my two cents. Fire off some questions if you have any.
-Pat