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iPhones, FStream and the Death of Satellite Radio
Statesman writes "Only a little over a year ago, the
FCC approved the merger of XM and Sirius
satellite radio companies and the combined stock was trading at $4 a share. Despite being a monopoly — or perhaps because of it — the company is failing. They are losing subscribers, the stock is now trading around 22 cents a share (a 97% decline), and they have written off $4.8 billion dollars in stock value. So, what happened? The CEO is blaming pretty much everyone except himself and his business model. But is pay-for-bandwidth even a viable business plan anymore? With millions of iPhone and gPhone users out there, free streaming audio applications like FStream, and thousands of Internet radio stations to access, the question is: why would anyone want to pay for proprietary hardware and a limited selection of a few hundred stations all controlled by one company?"
Read on for the rest of Statesman's thoughts.
Statesman continues:
"It seems like the pay-for-broadcast business model is fundamentally flawed. First, satellite radio is a misnomer; if you are listening inside a big building, chances are you're really using WiFi radio, not satellite, which requires line-of-sight to the sky. In this mode, XM/Sirius offers less selection and higher cost than an iPhone and streaming audio client. Second, a monopoly is a monopoly. Sure, you can get dozens of ClearChannel stations in some markets, but after a while it does not matter whether they are country, top 40 or easy listening. They all have the same format of hypercharged 'personalities' and lots of ads. By contrast, the iPhone and streaming client can access thousands of stations from thousands of providers worldwide. Finally, you may say that an iPhone and service agreement are expensive compared to a satellite radio subscription, but if you already have the iPhone, the cost of adding a stream audio application is zero. And the iPhone is cheap compared to a cell phone plus an MP3 player plus a laptop plus internet access. Bottom line: a year after being granted monopoly status, Sirius is all but bankrupt and the satellite radio business model is dead. Time for the FCC to think seriously about making better use of this bandwidth."
"It seems like the pay-for-broadcast business model is fundamentally flawed. First, satellite radio is a misnomer; if you are listening inside a big building, chances are you're really using WiFi radio, not satellite, which requires line-of-sight to the sky. In this mode, XM/Sirius offers less selection and higher cost than an iPhone and streaming audio client. Second, a monopoly is a monopoly. Sure, you can get dozens of ClearChannel stations in some markets, but after a while it does not matter whether they are country, top 40 or easy listening. They all have the same format of hypercharged 'personalities' and lots of ads. By contrast, the iPhone and streaming client can access thousands of stations from thousands of providers worldwide. Finally, you may say that an iPhone and service agreement are expensive compared to a satellite radio subscription, but if you already have the iPhone, the cost of adding a stream audio application is zero. And the iPhone is cheap compared to a cell phone plus an MP3 player plus a laptop plus internet access. Bottom line: a year after being granted monopoly status, Sirius is all but bankrupt and the satellite radio business model is dead. Time for the FCC to think seriously about making better use of this bandwidth."
Some people like certain media personalities and are willing to pay a premium to subscribe to their shows.
BTW, this is also why sites like Forbes, NYT, and WSJ get paid subscribers while CNN and MSNBC basically give away everything for free. You said it yourself. Clearchannel's lock on the airwaves is something that some people are fed up with, and those people are looking to XM as a means of getting other types of content.
But I don't even own a tv or a radio, so I'm just a bit better than you.
Is this serious? An iPhone able to replace satellite radio? Lets start with battery life, as in, there is none. Using WiFi to stream music on the iPhone will kill the battery in less than an hour or so depending on conditions. To solve that, I guess I could plug the thing in.
Now, let's use WiFi in my moving car. HAHAHA yeah, that's a total joke. So we'll use T-Mobiles network for $20 a month... umm, maybe not. Let's use AT&T's network. Streaming data plan? $60 a month. Better hope you're in one of the urban areas that support the high speed data! ORRRRRRR... you could buy a $50 Satellite receiver, pay $12 a month (or $6 if you know someone nice) and do away with a $60/mo data plan AND have access to the signal anywhere in the US.
Seriously... I live in a big urban area, where the idea of this would work. But the implementation would be marginally feasible at best. The battery life issue is huge. The cost is huge (but one could argue that one would already have those, making the cost a non-factor... but how many people have an iPhone + an AT&T data plan AND have Satellite radio? Not many I'll wager.). The available coverage area is absolutely tiny, microscopic really compared to satellite radio.
No... there's nothing about this idea that is even marginally viable on even a small scale.
The business model of XM/Sirius may be flawed, but iPhones and FStream are not going to be a factor in any way, shape or form, nor is WiFi and Streaming radio. Satellite radio is good for so many things that WiFi and Streaming radio can't and won't be touching anytime in the near future (remote listening, professional music selection/composition/presentation, uncensored programming, big name talk show people (bleh personally), professional sports, etc...). Streaming audio can't compete at the same level anytime soon, if for no other reason than it's not organized enough.
I'm thinking about dumping it next year. Now that the merger is over, the Sirius "jocks" WON'T SHUT UP! The main reason I went with XM radio 5 years ago was NO TALKING, NO COMMERCIALS. The decades channels and some of the rock channels have "DJ's" which have to talk over the music, yack yack yack. If I wanted that, I could listen to FM for free. Fix that, I'll keep it, don't, and I'm outta here. Back to FM, CD's & MP3's
It may not be worth it if your commute is only a half hour each way, but it's a bargain for me. My commute last week was 102 miles each way. Tomorrow it will be 95 miles each way. Plus I work out of my vehicle. I keep it on all day.