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Satellite Radio: Tune In or Turn Off? 519

Steve MacLaughlin writes: "After nearly a decade of buildup and anticipation satellite radio has finally hit the airwaves. By now you've probably seen a commercial or read an article about the digital satellite radio service. But what is behind all the hype? And does satellite radio have a viable future? To answer those questions Saltire decided to take an in-depth look at the new service's inner-workings, its potential, and its possible future." Read on for more of Steve's look at the current options and future possibilities for satellite radio service.

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 Systems

    Why 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 Technology

    What 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.

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Satellite Radio: Tune In or Turn Off?

Comments Filter:
  • sattelite radio (Score:2, Interesting)

    by dmallery ( 150862 )
    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.
    • Too bad -- you prolly got better news from BBC S/W than from whatever reconstituted pap you'll get over satellite. tho, NPR isn't bad.

  • I'm in... (Score:2, Interesting)

    by Byteme ( 6617 )
    Only if I can get every college radio station from accross the country that I desire on my presets. Until then I'll stick to CDs and my MP3 player.

    Commercial radio sucks big time.

    • Re:I'm in... (Score:3, Interesting)

      by micromoog ( 206608 )
      The whole point of this is the large number of channels. Commercial radio "sucks big time" because there are only 3-10 or so stations in each market, so they must appeal to the lowest common denominator.

      Satellite radio opens the possibility of having separate channels like "death metal", "doom metal", and "speed metal". This level of granularity beats even the best college radio stations (unless what you REALLY want is local music, in which case you should just buy the CDs to support them anyway).

  • by crow ( 16139 ) on Wednesday December 12, 2001 @01:21PM (#2693829) Homepage Journal
    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.
    • I completely agree. I can't see myself investing in an XR or SR tuner when I have already put money into my car mp3 player. Especially when my car Mp3 player can do so much more than either of them can... such as playing pirated audiobooks. In my experience no long comute is complete without an audiobook to take you along on your journey.

      Plus my mp3 collection has gotten larger than most radio station archieve's... so I'm not exactly hurting for new musical content.

      The killer app of satalite is more apt to be something we can't already get. Such as Howard Stern live (or delayed for the west coast). You can grab it off the newsgroups a day late... but it's not the same thing as listening to it live. And considering how limited his and other radio personalities' markets are, satalite could bring them into alot more homes/cars.

      I've been doing alot of traveling in new england lately, and haven't been able to hear howard since I left NYC. I would be more than happy to pay $10-20/mo to get Howard and other original content anywhere I go. But not just for music... you can find music everywhere you go in North America already.
      • 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)...?
    • There are only a few things that I would actually pay to hear on the radio:

      News/Sport? There's almost always a news station somewhere on the AM or FM dial. No need to pay there.

      Music? I rarely listen to any music station. I have enough MiniDiscs in the car to keep me happy (just like the previously mentioned MP3 players).

      Sporting Events? If I'm going to subscribe to sporting events outside of my local coverage I'd rather spend my money on a Satalite TV subscription. How many games am I going to want to listen to in my car? Plus, most of the stuff I listen to I can get free over the web (Ipswich Town FC) or if needs be can pay $30 to Real/MLB for a season pass to any baseball game.

      For me, that leaves unique/niche shows. If I lived somewhere where Stern wasn't syndicated I'd think about dropping some cash to listen to him. Thankfully I live in DC, so I get that for free as well.

      As someone has already pointed out, its a nice idea, but I think the satalite radio companies have overestmated the demand out there for thier service. They'll have to come up with something above and beyond simply reproducing the radio experience over satelite to get lots of people to fork over $$$.

      Just my $0.02
    • And, generally speaking,

      1) I don't encode commercial interruptions into my MP3s for in car enjoyment (XM = $9.95 and only 30% commercial free? no thanks.)

      2) I can rip a lot of music for $120/YR.
    • 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.

      Nah. Well, maybe not nah. Just be careful not to interject too much of what *you* want into what the general public wants.

      Of the 15 people in my family, I can imagine 1 getting MP3, 5-6 getting sat radio and the others sticking with FM. Of the 1 getting MP3 (Me), I'll get sat radio also.

      This is a huge market, IMHO.
  • Coverage (Score:2, Insightful)

    by mini me ( 132455 )
    In many cases, huge segments of the music industry get little or no coverage by mainstream radio.

    Lucky them!

    Seriously, if this technology is just an overglorified radio, what is the benifit? If they provide radio stations with content the people want to hear (like non-mainstream music in all genres) then you might have a winner.

    Of course if this frequency is ideal for wireless satellite broadband internet access then get the radio off it immediately! You can stream the radio over the net if you have to.
    • If they provide radio stations with content the people want to hear (like non-mainstream music in all genres)
      here's something people seem to be missing. MOST people like mainstream music, thats why its mainstream. This bland programing is there because people listen to it, and call in to the station.
      Is this sad, yes. But then since most people never learn how to think, its not surprising.

      So the question is, will sat. radio get enough oney from the niche markets to survive long enough to become a realistic option for mainstream listeners? I imagine once there put into all cars, it will be an option they throw into your payments schedule, then it may have a chance. of course all the popular sat radio stations will sound like current radio stations, but I don't really know how to end the sentence.
    • Re:Coverage (Score:2, Insightful)

      by Jus'n ( 85372 )
      If they provide radio stations with content the people want to hear (like non-mainstream music in all genres) then you might have a winner.
      Hate to be the one to tell you this, but by definition, "mainstream" music IS what people want to hear. You're suffering from the all-too-common human curse of thinking everyone in the world is like you and your own local peer group.

      You want to know what the benefit is? Let me give you an example:

      Do you get cable/satellite TV? Have you ever gone for any length of time without it? I didn't get cable until I was about 10 years old. I was perfectly content before that, watching local saturday morning cartoons, watching local network sitcoms like Who's the Boss, etc. Then around 10 or 11, I got cable, and discovered the joys of USA's Cartoon Express (and now, we have a whole Cartoon Network!), and found a whole world of other programming on those 40 or so channels (at the time). Not to mention all those wonderful movies on the premium channels we got for free as a sign-up bonus (back when I was 11 or so, I was more easily amused. Or maybe Showtime sucks now. At least Skinemax is still living up to its name...). I got to watch TV shows that actually stimulate, rather than sedate, the mind! Then, after a couple years, my family decided that they didn't really watch all those channels, and we could save a little chunk of change by ditching cable, so we did. We went back to watching drivel like Who's the Boss, and OMFG it sucked! It lasted about 6 months before my parents broke and got cable again. What's the moral to this story, you may ask? Local programming, like broadcast TV and radio, is necessarily limited. Niche markets, on a local scale, are not generally worth catering to. Sure, local programming is interesting for curiosity's sake when it's not your own local area, or for keeping grounded in your local world, which is all fine and good, but it certainly does NOT bring you the best the media has to offer. Generally, they cater to the lowest common denominator, and odds are, in your area, that's pretty damn low (at least compared to the average Slashdot-Intellectual).

      Is cable perfect? Of course not. It's necessarily limited in bandwidth, and therefore you DO get some of that lowest-common-denominator effect (HOW many f***ing times a day is that Emeril loser on Food TV? ok, bad example, since he owns a bunch of it, but still. And how many Turner networks do I really need? Especially since Discovery took all their good shows on put them on specialty networks, like Discovery Wings, Discovery Science, and Discovery Health, leaving bassically NOTHING good on Plain Ol' Discovery Channel, the only one I get). Sorry for the rant. At any rate, sure, cable's not perfect (leaving the door open for DBS and digital cable), but ye gods! have you seen broadcast TV lately? One or two good shows a week, and everything else melts your brain!

      Now imagine how that could apply to radio. I live in the DC metro area. We have a lot of radio. I think we have something like 20 FM stations. I don't like a single damn one of them. I think the two modern rock stations sync their (bad) playlists just to piss me off. The 3 "Mix" stations play an interesting "mix" of decent music and crap... heavy on the crap. Country stations are right out, as are the hip-hop/R&B/whatever you want to call 'em stations. Occasionally I get a jonesin' for some classical, some nice Beethoven or Wagner, but our classical stations just play lilting little fairy-dust stuff whenever I turn them on. Jazz is totally hit-or-miss when I hit the public/college stations (maybe one good song a month, due mostly to the fact that they only play jazz maybe 2 hrs a day, and only when I'm not listening to the radio). One thing I can count on is the morning shows. WHFS's morning show will, at least once every single weekday morning, talk about Fred Durst. And that's only in the 45 minutes or so I listen, out of, what, 4 hours they're on? The Mix stations have ok morning shows, and that's really the only thing I listen to the radio for anymore. Much like broadcast TV... local news is really all it seems to be good for anymore. All the good shows on local broadcast channels are made by the NETWORKS which probably only broadcast ANYTHING because not everyone has cable/DBS yet.

      Why listen to someone else's playlists at all? Well, I have about 45 hours' worth of MP3s here at work, and maybe another 100 hours on CD at home that I haven't ripped yet, and I get SICK of my music. I'll go a month or so just loving the crap out of my mixes (MD player for the morning commute) and then go a month without listening to a single thing I already own. That month is painful, because I'm reduced to listening to that locally broadcast shite.

      I welcome satellite radio (and I get especially creamy at the thought of what will replace it!).

  • XM radio (Score:5, Informative)

    by wiredog ( 43288 ) on Wednesday December 12, 2001 @01:23PM (#2693841) Journal
    There's been lots of coverage of their system in the Washington Post [washingtonpost.com]. Look for stories by (former) radio reporter Frank Ahrens. He likes XM

    If you liked WHFS back in the day, one of their former dj's now works for XM.

    XM handles signal fade in cities by putting repeaters up all over the place.

  • by wangi ( 16741 ) <lee@leekin3.14159dness.com minus pi> on Wednesday December 12, 2001 @01:24PM (#2693851) Homepage
    Of the same music! Damn, America has two types of music - Country and Western!
  • by ManualCrank Angst ( 541890 ) on Wednesday December 12, 2001 @01:24PM (#2693853) Homepage
    You in the big cities and even you in the more heavily populated rural areas may not realize what this means. But ask anyone who has driven across Montana, Wyoming, and one or both of the Dakotas: There are literally miles and miles where you cannot get any radio at all. I'm not saying "nothing but talk" or "nothing but Hat Act music". I'm saying literally NOTHING.

    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.

    • ask anyone who has driven across Montana, Wyoming, and one or both of the Dakotas: There are literally miles and miles where you cannot get any radio at all.
      Those are also areas where people are also spread very thinly. You're not going to pay for your satellite network with 15% of those people; you're going to need 3% of the suburban drivers. U-Hauls are the same, people don't use them often enough to make it worth putting a sat radio in it. Those things usually don't even have cassette decks, let alone CD players. (Yes, I have way too much experience with rental trucks.)

      Long-haul truckers are probably a solid market, but I don't know how many of them there are or if they'd make a big difference in the bottom line.

  • I live in a high rise. My windows are on the North, and in every other direction, including straight up, there's a lot of steel.

    Would I be able to receive XM signals? I can't get satellite TV, obviously.

    I love radio, and would buy XM in an instant if I knew it would work. But I haven't seen very much information on reception. Most of their marketing and FAQs seem to be aimed at people in cars and trucks. I like to drive as much as the next guy (more, probably), but I'm just not on the road that often.
    • I live in a high rise. My windows are on the North, and in every other direction, including straight up, there's a lot of steel. Would I be able to receive XM signals? I can't get satellite TV, obviously.

      The plan to have repeaters in big cities should help this. Unlike Satellite TV you would likely have a repeater within a couple of miles in direct line of site unless in you already on the far northern edge of the city.

      If you want a more definitive answer you could try posting what neighborhood you live in and maybe someone can track down the exact location of nearby repeaters. Regardless, you could just purchase a receiver with a credit card and return if you don't get any signal.

      If I was XM or Sirius I would have at least one station that you could get all the time without a subscription fee that would serve both as way to get lapsed subscribers to sign-up, and as sort of a channel guide. Plus it would let people test out their hardware without having to go through the new user registration stuff.

      Speaking of user registration, anyone know how the two systems compare regarding listener privacy? I know Sirius has no ads, but that doesn't mean they are tracking the demographics of purchasers of the service. For XM, you have to exepct that part of the $3 discount is adverstisers knowing just what demographic groups are listening to what stations.
  • digital radio? (Score:2, Interesting)

    by Graff ( 532189 )
    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.
    • It's digital (Score:3, Informative)

      by wiredog ( 43288 )
      I don't recall the format though. But it does have the option of listing the titles. Haven't heard about searching, but the stations will be divided by genre.
  • "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."

    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 find it hard to believe that there's a great
      > consumer need out there for car-delievered
      > subscription services

      Sure, there is a need, but I don't think it's necessarily digital radio. Mercedes-Benz has their integrated phone/roadside assistance function with GPS (kind of like On-star) that comes standard on every MB today. You pay a yearly subscription for the service-- an incredible $200/year, and that doesn't include airtime!

      When you buy the car, you get a free 1-year subscription, plus some airtime. I've heard that the re-sign rate after the first year is fairly high, so some people see some value in it.

      However, that could an isolated case. I'm having a hard time believing that people would pay for that, plus some satellite radio service that required a subscription as well. From the perspective of users not wanting to subscribe to multiple services, I can see a downside there -- same reason why many people don't subscribe to multiple magazines. And with MP3 players becoming more popular, many people would view satellite radio as a competitor to MP3 players.

      I think there will be some limited markets for this: stations for rural areas, piped muzak for businesses and retail stores, and similar. I don't see it getting big for mainstream consumers when other more accepted substitute items exist: regular radio, cassette tapes, CDs, and MP3 players. Plus, good-ol', traditional conversation!
  • by reaper20 ( 23396 ) on Wednesday December 12, 2001 @01:27PM (#2693877) Homepage
    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.
    • by austad ( 22163 ) on Wednesday December 12, 2001 @01:57PM (#2694112) Homepage
      I agree completely. XM has the advantage of being out first, especially right before christmas. But there is no friggin' way in hell I'm going to *PAY* $10 a month for more commercials. I will happily pay $12.95 a month though to Sirius for commercial free music.

      An mp3 player in the car would be nice, but it requires love and attention for adding new music, creating playlists, etc. It's nice to just be able to turn on the radio and hear music. Plus, you get exposed to new music on the radio, with an mp3 player, you are limited to what's in your current library.

      I've complained many times to XM about their commercials, and several of my friends have also. It appears that they have made a few channels commercial free now because of all of the complaints, but there are still commercials, and there is no way I'm going to pay for that.
  • by Zen Mastuh ( 456254 ) on Wednesday December 12, 2001 @01:28PM (#2693883)

    Can we finally rid the world of the middleman now? We have:

    • A limitless supply of artists
    • A limitless supply of music fans
    • Ubiquitous medium (satellite radio)
    • Music sharing services (Morpheus, etc...) and payment services (PayPal, etc...) that can be improved to be secure and can be coordinated to allow music fans to pay a fair price (read: far less than $17 per CD) directly to the artists.
    • A corrupt, outdated system in which the artist gets screwed at the time the contract is signed, the fan gets screwed at the checkout counter, and the industry's trade association lobbies for (and receives) absurd laws with draconian penalties that ensure a limitless profit stream for its minions

    Someone please stop the RIAA before they ask their cronies (the gummint) to pass laws making it illegal to hum tunes to ourselves?

    • Broadcast stations are getting bought up left and right, largely by beheamoths like Clear Channel and Capital Cities/ABC (Disney). In the markets I live in, Minneapolis (school year), and Grand Forks (summer), the airwaves are dominated by CRAP, a large portion of which is broadcast by a Clear Channel station (5 in Grand Forks, 7 in Minneapolis). The music choice on these stations seems to be limited to oldies, Britney Spears, and Limp Bizkit. The only alternatives in either market are college radio -- REV 105 used to be a real choice in Minneapolis, but that has been long swallowed up by Disney.

      So I'm happy just to see satellite radio for the opportunity for something that's just a little different (granted, there will be Clear Channel and Disney stations on there too).

      So maybe we need to start a "pirate radio" station for satellite, or at least get a good net-only station onto satellite.
  • I see the greatest appeal in satellite radio in talk radio/news/sports, live content that you wouldn't be able to get(or at least reliably or from a consistent source) if you're on the road.
    Plus, like with satellite TV, it could help you get shows from other parts of the country you'd otherwise be unable to get.

    Plus, not everyone has the time or inclination to upload their music collections to mp3.
  • They compare themselfd to pay tv.
    I think most people enjoy watching tv more then litening to the radio. How many people want to get together and listen to the big game? ~0.
    Most people are in there cars for less then 2 hours a day, almost all of them neve leave there radio area. Contray to what he says, Most dense population have a wide variety of radio programming.
    The only potential market I see is truckers.

    I do have an idea that would make this successful, I just don't know if it would be acceptable under current regulations.
  • 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 $30 question is (Score:4, Interesting)

    by baptiste ( 256004 ) <mike@NoSpaM.baptiste.us> on Wednesday December 12, 2001 @01:29PM (#2693894) Homepage Journal
    I refuse to pay for extra receivers. THink about it. 2 receivers for your two cars (if you're married or very rich :) ) plus at least one receiver on teh Home AV system. Will it still be $10/month? If so I'd sign up - seems worth it. Or will I get charged another $3-$5 for each additional receiver? I've been a DISH subscriber for years and it just irks me to have to pay $5/month for each extra receiver for additional rooms/TVs. It makes me feel like I'm getting less value.

    Nope - from XM's customer agreement:

    b) Multiple XM Radios. If you add additional XM Radios to your account, you may purchase a separate subscription for each one (see Section 5).

    That's $30 a month - no way in the world am I paying that - sorry.

  • by Isaac-Lew ( 623 ) on Wednesday December 12, 2001 @01:30PM (#2693904)
    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 [opieandanthony.com] could do on the air....). I think that would be the killer app for satellite radio.
    • Back a couple years ago Howard Stern was talking about switching to satellite radio, to get around the FCC decency rules. I'm not sure if the rules have changed, but I would guess that since it's a subscription-only service that the FCC decency rules would not apply.

      As for your Opie & Anthony comment. Ugh.

  • by WaIter Bell ( 542911 ) on Wednesday December 12, 2001 @01:31PM (#2693918)
    One of my buddies bought two XM radios last week and has been very happy with them. In fact, he cracked them open and found that he could "clone" his subscription onto the second radio by copying a serial EEPROM chip. So now he is offering it as a service: he will clone an XM radio onto another one for $50 and he is making a tidy little profit off of friends and neighbors by cloning his own subscription, so that they get the service for free. [microchip.com]

    In retrospect, XM should have really considered a smartcard system like that of DirecTV [directv.com]. 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.


  • by KoshClassic ( 325934 ) on Wednesday December 12, 2001 @01:34PM (#2693929)
    The bottom line with the success of these services will be a) Is the content actually good, where they'll play a song even if it isn't on a major label or performed by Brittney Spears, or am I going to have to listen to the same 75 songs programmed by mindless corporate drones over and over like I have to do on FM today? b) If they actually get part 'a' right, will they last long enough financially for word of mouth to help them achieve critical mass?

    On a technical note, does anyone know the capacity of these systems in terms of the number of seperate channels they can offer?

    • new media always goes through the same cycles.
      1st. fewer to no commercials, lots of variety, some reallgood.
      2nd. more commercials, the really good stuff stays, everything moves toward the same blandness.
      3rd.. being bland starts making serious money, and in comparison, the really good stuff doesn't seem to be bringing that big a a percentage
      4th /. reports the death of the really good sat. radio station.
      5th really good stations stay on the air another year, just to prove /. is wrong
      6th. really good stations go away.
      7th/. annous "the next tech" that promises to end bland boring sat. radio.
      8th people still fail to relize the most money is in getting the most listeners, which means bland stations.
  • 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.

  • Sure this is great technology and all, but why should I be forced to pay $10/month for music I can get for free on regular radio? Sure it's not digital quality, but for the most part it's good enough. Plus, this new "digital satellite radio" can't be as robust as regular analog radio. What's going to happen everytime you go under a cement overpass or are sitting in a parking garage? Is my new fabulous digital solution going to "skip" 50 times on my average daily commute? Sorry, digital quality audio just isn't worth it if this is the case.

    What's more, when I decide I want a song in digital quality, that's what I have my car minidisc deck for. I have an optical connection from my computer to my standalone minidisc recorder, and I record digital music (usually MP3s) to my heart's content, and take the minidisc into my car. Even in mono (~150min) it sounds absolutely perfect on my car stereo (6 speakers, 1 sub).

    If they made a flavor of Satellite Radio with commercials that was FREE, then I might consider getting a satellite receiver. Until that time, I can't imagine getting one. In fact, when I hear my friends talking about getting a satellite radio, I chime in "Are you really going to pay $10 per month for radio?" and they immediately respond, "They charge a monthly fee??" It'll be interesting to see how much of the wow factor will wear off when people go to their car audio shop and find out there's a monthly fee for a car stereo.

    I only see two ways for this to really take off. One option would be to add an extra $250 or $500 to each new vehicle pricetag, to act as a sort of "down payment" on the satellite radio service. That way, at least you get two years (or four) of the service "for free" with your vehicle purchase, and after that time you can decide if you want to stick with it or not. The only other option I see, is to stick some commercials in the service, and offer a free alternative. Put ads on the LCD, regular audio commercials, whatever is necessary... but I can guarantee you this, I would never, ever, pick up one of these stereos if I knew I would have to pay $10/month indefinitely just to USE that incredibly expensive receiver I bought. No way.
    • I agree completely with you. Moderator!

      What's odd about satellite radio is they are attempting to do two big things at once: broadcast from satellites, *and* subscription based radio. It would make a heck of a lot more sense to just do one of those -- and the sensible one is satellite broadcasting.

      Put up the satellites and create a dinosaur rock station (you know the station -- the place that plays Metallica now, but did not play them 10 years ago). Also create a country station, and a talk station or two, and a progressive rock station, etc. Just mimic what you find on the ground right now. Sure you cannot do traffic reports and local weather -- that's a cost. But your ad reach is huge -- advertisers will pay lots. And your running costs are minimal.

      Another way to look at it: right now there seems to be at least one dinosaur rock, one "progressive" rock, one country, one... etc. station per city in the US, I would imagine at least 200 cities large enough. Imagine a business in which you can fire 99.5% of your labor force, and produce just as much output! And imagine that same output is worth 200 times as much to the customers! That's productivity!

      I suspect the reason that the two satellite services are not providing ad supported free radio must be political.
  • I hate to brag but we've had Digital radio in the Uk for a while now..


    Of course we have slightly less red tape to go through, but it's interesting wrt to broadcast/cellphones how you guys in the US seem to lagging behind other countries. I guess making the frequencies available is the main problem??

    • Er.. I woulden't be bragging. The Psion Wavefinder was such a flop, it caused them to have to abandon development of their new PDAs due to the massive loss of capitol incurred.

      BTW - I'm enjoying an unlimited highspeed internet connection for $45 (27 Pounds) a month, Hows BT doing with yours. (duck)
  • I've heard about satellite radio on and off for at least five years now, but there was no "hype" (directed towards MY demographic at least :-\ ). IMHO, satellite radio is great for people in out of the way places or who are on the move all the time, but is this a large enough market to justify the amount of money it takes to pay for upkeep?
  • I honestly believe that people will pay for such a convienence.
    I personally would love to have music playing that doesn't cut in and out while I'm driving a long distance. Or trying to find a good radio station that doesn't play country way up in northern vermont or maine.

    And no advertisements! yes, yes, yes!

    But the real question is this: "Will the satelite radio compainies get enough subscribers to sustain themselves"

    This is very important and should really be looked into first. I mean, so many wireless internet companies failed. We just saw @thome go under just recently, and they had a LARGE customer base.

    Regretfully, very few companies could pull this off. And I firmly believe that the only ones who will, are the ones that are already established such as Time-Warner or Microsoft. They already have the capital and the means and they can suffer the losses that will incur for the early years of this new business cycle. Not some startup.

  • So if they have to put two more satellites up, will they be named Sex and Drugs?
  • I would rather that 3Com bring back the Kerbango I wanted for months and months (I pre-ordered it from Amazon as soon as it was announced) and it was canned before it was released -- a victim of 3Com's Internet Appliance division. With CDs, car MP3 players (such as a 1,000 song iPod) and 5 AM talk radio stations, who needs Satellite Radio? I would have loved to have the 1,000s of channels of Internet radio from a Kerbango sitting on my desk instead.
  • Seriously, with iPod (or any MP3 jukebox) and a little cassette adapter, my music worries are over. OVER. No need for satellite or any other radio.

    What I would pay for in my car is 100% reliable, commercial-free newscasts from BBC, NPR, and CBS News. Just the news, not the music. Someone make that happen for a lower price, and I'm there.

  • by Anonymous Coward on Wednesday December 12, 2001 @01:49PM (#2694061)
    I had XM radio, I took it back. Simply put the quality was about the same as 96Kbit Mp3. It had great selection the music was awesome. The no commercials ruled. But everytime a song I liked came on and I cranked it up, the lack of quality and compression artifacts drove me away.
  • Target audience? (Score:2, Insightful)

    by mr.buddylee ( 541034 )
    Who is the supposed to appeal to? I personally wouldn't use it with a 10 minute commute, even with a 30 minute commute, I can't justify $10/month for the radio.

    Also, do you think this will appeal to the soccer moms of america? or the older population? Too technical maybe or just not worth it?

    He said "are more than 200 million registered vehicles in the United States" but to reach their number they still need 4.5 million of those? Are there 4.5 million people ready to chuck out $10/month with the uncertainty of the economy?

    I hope they do well, but I personally think they're about a year too late. A year ago, everyone wanted a new gadget, now, I don't think thats the case...

  • Now if they could get something besides US radio stations playing US songs, it might be cool. I live in the Chicago area, and all the stations play the same crap.

    Alternative (right): whine whine whine, teeny-bop pop.

    Hip Hop : crooooayayanouuuuoo-ning garbage or the same beat with lyrics about 'tha street'.

    Classic Rock : good songs that I have heard 1 million times. Hey, even Zeppelin gets old.

    Light Rock : What the hell is this!?

    Obviously, we aren't intelligent enough to listen to our own music in this country. We have to listen to what they cram down our throats. Maybe it is that way in other countries too, but at least it would be new (to us) music if we could listen to it.

  • by avdp ( 22065 ) on Wednesday December 12, 2001 @01:53PM (#2694089)
    Why I will not be listening to satellite radio anytime soon:

    - It's a subscription model, and yet I have to buy the equipment which is not cheap (other than the one car manufacturer that includes it).

    - It's a subscription model, yet there are commercials (on at least some channels)

    - I have to dish out money for equipment and yet there is a good chance it will only work for less than a year. One company admitted that they have money to stay afloat until the end of next year. Which means, there is a good chance they will no longer exist a year from now since I think they're expectations on signing up 4.5 million subscribers is a bit optimistic.

    Yikes. No thanks. You won't get me to take the gamble, at least not until they have been around for a couple years. Of course, if everybody thinks like me, they won't be around for a couple of years.
  • 1) It would require something different from regular radio. I'd like to be able to listen to all-reggae, or all-cuban -- don't replicate the crap that already smothers the radio dial

    2) No commercials -- if I'm paying for a monthly service, i don't want to hear any ads. (this alone would make it worth a monthly fee)

    3) A low monthly fee. I currently pay about $5-10 a month already to a local community-funded radio station (http://www.wpkn.org -- check it out, they kick ass). I wouldn't pay more than $10 a month, and honestly $7.50 seems a fair price.

    4) Cheap/free hardware -- noone is going to pay a lot of money for hardware that may very well be obsolete in 6 months to a year.

    Needs 3 and 4 are the toughest ones to meet, I think. Especially when following 2. I'd love to see someone pull it off, though, and I'd definitely have one installed in my car.
  • by rkischuk ( 463111 ) on Wednesday December 12, 2001 @02:00PM (#2694129)
    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?
    • by Watts Martin ( 3616 ) <layotl.gmail@com> on Wednesday December 12, 2001 @04:36PM (#2695142) Homepage

      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?


  • 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:


    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.


    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!
  • XM Radio Rocks! (Score:4, Interesting)

    by rhaasch ( 543383 ) on Wednesday December 12, 2001 @02:24PM (#2694278)
    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
  • I'm not really interested in satellite radio because I'm 99.99% sure I won't find anything I want to listen to. Yeah, this sh*t is nation wide, but who wants that? From my experience, anything nation wide isn't interesting because the presentation is ultra-bland, assumably so nobody is offended. I hear nation wide style broadcasts on my local radio stations mostly on the weekend, which is filler content the station uses to fill the void. "Your listening to the we're going to tell you whats cool this week show, and I'm your host, ultra fake ultra boring radio guy!"

    I believe that localized (or regional) traditional FM radio is more interesting to listen to because of its local identity. The DJs are people that are part of the localized culture, we can easily identify with those people, and the presentation is interesting. People identify with their favorite radio stations... its one way we can identify "who we are" in a social context. I certainly would have a hard time identifying with a bland nation-wide pop-culture type of satellite radio "station".
  • The biggest problem with radio in America today is that it unabashedly and shamelessly SUCKS. Once the FCC bent over to NAB (National Assocation of Broadcasters) lobbying in the late 90s, and lifted ownership restrictions (which only allowed a company to own one FM and one AM in a market), the way was clear for Clear Channel, Infinity/CBS, and the one or two other conglomerates to move in and utterly destroy radio in this country.

    This is why you can turn on the radio in LA on a Sunday night and hear the same idiot DJ on three stations at once, even though his show only loosely fits the format of two of those three -- because Clear Channel would rather pay only one DJ than three. Or why you have stupid radio contests where you now compete against callers across the entire country instead of in your own market. Or why 20-30 stations in a region have not only the same format, but the EXACT SAME playlist every week.

    Throw in the thinly veiled payola that is the current record promotion business, and you end up with a very smoothly running machine that operates only for itself and the interests of its owners -- listeners and music enthusiasts be damned. If you're an artist that doesn't have a big label behind you that believes you'd be profitable to them (because there are artists on big labels who get no support from their label -- who might as well just be on a no-name independent label in Des Moines), you're screwed. You may get college radio play, but that's not going to take you very far.

    I read recently that Clear Channel is one of the partners of one of these companies -- not sure whether it's XM or Sirius. If this is really the case, this shit is doomed. I have a hard time believing the public is going to PAY for the same bland, homogenized garbage that they already get for free in the 90-something percent of America that is covered by a Clear Channel station already.

    Having been a college and community radio DJ in the past, and remembering the days when a fair amount of commercial stations were even pretty good at times, this is really depressing to me. The idea that a wonderful new technology will probably end up being manipulated by the same uncultured, money-obsessed marketroids and milked for every last penny it can spit out, until it ultimately dies, is just plain sad.

    So, you want to survive, Sirius and XM? Don't suck.

  • I used to run a college radio station a few years ago, just outside Baltimore, MD. We tried for years to get an AM or FM license so we could broadcast off campus. Nothing big - 5 watts would've been more than enough. All we really wanted was to broadcast a few miles to cover the campus and surrounding apartments. Long story short - we couldn't get a station because the FCC won't license micro stations (stations under 100 watts).

    The FCC a few years back decided to allow micropower stations. Congress, backed by the NAB (National Association of Broadcaster), passed legislation overriding the FCC. Essentially, Congress decided that the FCC - the US government entity in charge of communications - was not actually in charge. That legislation just about killed any chance of any real competition.

    The truth is that the NAB is a cartel, just like OPEC. Unless you buy an existing station, in any suburban or metro area, you CANNOT get a frequency. The NAB has spectrum, and won't let anyone else get spectrum. They employ any means they can. They fought low power FM and won because they didn't want to lose listeners, didn't want advertisers getting cheaper advertising on small, low budget stations, and wanted to maintain their monopoly.

    Why am I irritated, and why should you be too? Well, there are only a few major companies which own most of the radio stations you hear. That classic rock station you like? Owned by Infinity Broadcasting - CBS. That hip hop station? ABC. They playlists you hear are put together by the corporations. The 1996 Telecom act allows a company to own up to 33% of the stations in a market (up from 25% prior). That means, theoretically, 3 companies can own all the AM/FM spectrum in the US. It also means that if those 3 companies don't like something, you may never hear it. XM/Sirius radio means there are only 2 players. If only one survives, there will be only 1 company deciding the music and playlists you listen to. Do you like "Noise in the Basement" - those late night local music shows on your local rock station? You'll never experience anything like that again.

    Commercial radio has become just that - commercial. Generic, regurgitated, formulaic "music". Rock was great in the 50's and 60's. The Beatles were pop music. POP MUSIC! Think about today's pop music and you fully understand what I'm saying. Incidentally, my music colletion spans 1920 to the present, 150 CDs, 160 albums, and about 20 gigs of MP3s.

    I personally wouldn't use satellite radio if the equipment and service was FREE and there weren't any commercials, simply because I hate knowing one company decides the musical tastes of the entire country. Think about it in different terms if you prefer - Don't like Microsoft, but use their software at home or work because you don't have a choice (incompatibility/available applications/etc)? Think this will be any different with only one company controlling the spectrum on your equipment?

  • Wouldn't that be neat. Since it is already digital from the sat, no need to redigitize it...

    You could fast forward commericials (assuming you have a buffer...) and pause a good song when you get out to pump gas.

    Might be a bit dangerous to use while driving. :-)

  • Local advertising? (Score:2, Insightful)

    by cr@ckwhore ( 165454 )
    What does this mean for local advertising that dominates traditional FM radio? Lets say "Larry's Local Lobster Shack" advertises on the radio and generates a lot of business. There really isn't anything attractive about satellite radio advertising for local business owners to get excited about. Plus, its probably a lot more expensive to match the likes of the larger national companies.

    I'm sure FM radio isn't going anyway, but will FM become to XM what AM is to FM?
  • So could I get both? (Score:3, Interesting)

    by Leebert ( 1694 ) on Wednesday December 12, 2001 @02:43PM (#2694431)
    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?
  • by mjh ( 57755 ) <mark.hornclan@com> on Wednesday December 12, 2001 @02:54PM (#2694495) Homepage Journal
    I don't want satelite radio for music. I have mp3.

    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 [slashdot.org], 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.

    • 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.
    • Excellent Point! (Score:4, Insightful)

      by cryptochrome ( 303529 ) on Wednesday December 12, 2001 @05:29PM (#2695463) Journal
      Excellent Point! You put it quite clearly, although you wrote too much. However, your argument does fail for channels that don't do advertising, i.e. HBO and the sirius network. And you also didn't mention that satellite broadcasting is far more efficient than cable or broadcast for every type of content except local news and entertainment.

      So let me propose a hybrid approach - satellites distribute advertising supported channels for free (users pay only the cost for recievers, which could be subsidized, and they do need to improve their reliability). Using the existing subscription-verification methods they have in place, they charge extra for the premium channels. Local broadcasters and cable companies either go out of business, change their business model, or operate with the satellite providers for local content (news, entertainment, and particularly advertising inserted into the other channels), broadband internet (particularly upstream, since satellite can handle downstream), and on-demand TV (especially via PVRs). It's that simple.
      • Re:Excellent Point! (Score:3, Interesting)

        by mjh ( 57755 )
        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!
  • As long as.... (Score:4, Insightful)

    by x0 ( 32926 ) on Wednesday December 12, 2001 @02:59PM (#2694531) Homepage
    Clear Channel Communications has nothing to do with any of the programming choices.

    In the last three years I have moved from North Carolina to Texas, California, and finally Minnesota.

    CCC has done more to ruin Classic Rock stations (shock jocks, et al...), that I would consider $10/mo cheap if the playlists are good.

  • by BluedemonX ( 198949 ) on Wednesday December 12, 2001 @03:11PM (#2694614)
    100 channels of N'Britney Boys? Or one stream of pap, a stream of reggae, a stream of Goth, one of Industrial, another for 80s new wave, the Disco channel, the Gangsta Rap channel, etc?

    What'd make this TRULY cool is to allocate 1/10 of same streams to the best of public access.
  • by isdnip ( 49656 ) on Wednesday December 12, 2001 @03:12PM (#2694615)
    Sure, the technology's cool. But the way Uncle (Frank Charlie) Charlie licensed it is indicative of everything that's wrong with modern American media.

    With broadcast radio, in urban areas at least, there used to be a lot of broadcasters. Now they're allowed to consolidate so Clear Channel and Viacom own most of the stations. College radio and a handful of local holdouts are what remains of diversity.

    With satellite radio, they cut right to the chase. Two licenses, nationwide, high capital corporate players. No other diversity. Sure, those players can select their providers from a diverse supply, if they so choose. But only if the dollars say so. No equivalent of Cable Leased Access, which theoretically allows anybody to buy a slot on a cable network, or for that matter cable's Public Access. Just 100 channels of what your Providers wants. Big Brother Knows Best. In the olden days, if there were a "natural monopoly" of this sort (if, for techical reasons, there could only be one or two providers, each with many channels, which seems to be the case here), then there might be the common carrier obligation or more open third-party-programming rules. But that's not what the content monopolists want.

    Worse, the two systems are not interoperable. So you can't even pick one. You get either Sirius or XM, depending on which car (or aftermarket radio) you buy. So the duopoly is really a monopoly so far as listeners are concerned -- at least with broadcast radio, you get your choice of Viacom or Clear Channel pablum. And that interesting stuff down at the low end of the dial.

    This is the DMCA's companion, a broadcast model from hell.
  • I've got one. (Score:5, Informative)

    by toastyman ( 23954 ) <toasty@dragondata.com> on Wednesday December 12, 2001 @03:14PM (#2694633) Homepage
    I've got one now, and have noticed a few things.

    1) The sound quality isn't quite what I thought it would be. While I don't know the actual bitrates used, the music channels sound about like a 64k MP3, and the talk/news channels sound about like a 24k MP3. I think I'd rather slightly fewer channels if it meant better quality.

    2) Since they transmit every bit multiple times, (either 3 or 4 copies of the stream is sent at once on a time delay, I can't remember which), dropouts are EXTREMELY rare. They have both spatial (two satellites you can receive at once), frequency (broadcasting on multiple frequencies), and time (broadcasting the same content multiple times) diversity. Nice.

    3) Yes, you're paying $9.95/month for *SOME* channels that have commercials. Most channels don't have commercials. Even then, the stations that DO have commercials air far far less than the FM stations I've listened to.

    4) You get some neat features like being able to display artist/song for each channel.

    5) Wow, some of the channels air things you'd never hear on the radio. The main comedy channel has more swear words per minute than you could imagine. None of the songs have the "bad words" beeped out. If you have kids, and are concerned, you can have them block any channels you don't want them to listen to. (Each channel is pretty clearly marked on the guide if it has strong language or not)

    6) Some of the channels do sound kinda amateur-hour. Kinda like college radio. I'm sure as time progresses they'll get more refined, but... Wow, some of the DJ's and commercials for themselves are cheesy. Really bad.

    7) They do have some really cool channels. CNN Headline News (the audio from the TV channel - usually works well except for "Nothing can describe the images you're seeing now..." bits), The Discovery Channel Radio, etc... Keeps me entertained.

    8) If you're a channel flipper, the delay between changing channels is kinda long... 1/2 to 1 second.

    9) Overall worth it for me. The total of 1 to 1.5 hours a day I spend in the car is at least enjoyable now. I've only had it for 3-4 weeks, but it's kept my attention that long.
  • One questions (Score:3, Insightful)

    by iceT ( 68610 ) on Wednesday December 12, 2001 @04:04PM (#2694922)
    What happens when I go under an overpass in my car? Last time I checked, satellite communications were line of site... Is my radio going dropp out ever 1/2 mile as a go up 'sunken' highways with overpasses ever 1/2 mile?
  • XM radio rocks! (Score:3, Interesting)

    by PatJensen ( 170806 ) on Wednesday December 12, 2001 @06:14PM (#2695754) Homepage
    As a current XM subscriber in Fresno, CA I commute daily to the South Valley (Tulare/Visalia). For an almost hour long one-way drive, I was forced to listen to the same old crap. I listen to jazz, techno/trance, a bit of gangsta rap and I love the non-stop stand up comedy on the way to work. Puts me in a good mood in the morning.

    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.


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