iPhones, FStream and the Death of Satellite Radio 397
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."
WiFi Radio, and I went to Slacker from Sirius (Score:5, Interesting)
WiFi radio? Does Statesman mean internet radio?
Sirius has terrestrial repeaters of their signal in large cities, so even in a building in Denver, for example, a Sirius receiver would get full signal strength from their transmitter on the ground. The transition from satellite to terrestrial is seamless, it is the same signal.
My main problem with Sirius is that even on the "commercial free" channels, the DJ would ... advertise for stuff going on related to Sirius, on other channels. Also, they would repeat songs at least once per day on more than a few channels, which got aggravating if you listened to it all day long.
I recently got rid of my Sirius radios and went with Slacker [slacker.com], getting their G2 portable as well. Big advantages: they will stream internet radio to a Linux computer, something that Sirius will not do. Also, Slacker's selection is much better, and the "Ban" and "Next" buttons are something that you couldn't even dream of with satellite radio. The G2 will download songs over wifi to the 4 or 8 GiB of storage, and it attempts to create an internet radio experience on the go, and it really does succeed.
Flaw in business model (Score:3, Interesting)
The problem with subscription-based radio is that there are so many easy alternatives that provide the user with much more control over their listening environment. I could potentially see people subscribing who live on the road, but for your average driver the plethora of options presented by standard radio, in-dash units that play digital audio files, regular CDs, iPods, and other external digital music players makes the subscription model much less compelling.
I've only known one person who had a satellite radio subscription, and that was relatively short-lived. It just doesn't seem to make much sense to most people.
The new Sirius lineup (Score:4, Interesting)
I remember a few weeks ago when I got the new channel update: I was freaked out. Half of my presets were gone. Not just renamed, but GONE. Yeah, I was pretty upset, and my first reaction was that I was probably going to cancel as soon as Howard Stern's contract is up (I'm a big enough fan that I consider that I'm paying my monthly fee just for his two channels, every other channel I happen to get is just a bonus).
But it didn't take me too long to figure out that my old channels has just been both renamed and renumbered, and my unit wasn't smart enough to track a change in both. Sirius' "Big 80s" was replaced with "80s on 8." Sirius "Left of Center" was replaced with "Sirius-XM U." "Buzzsaw" was replaced with "Boneyard." In short, nothing whatsoever was actually LOST, I just had to do some digging.
Sirius is guilty of failure to communicate the nature of the changes they made - but as near as I can tell they haven't dropped any content. At least, no content that I listen to... but like I said, if they drop EVERY other channel in their entire lineup and then jack up the price, I'll still pay to listen to Howard anywhere I go (a pure internet feed wouldn't cut it during my commute).
Re:Aw... (Score:2, Interesting)
My humble opinions (Score:5, Interesting)
I subscribe to SiriusXM as well as riding the 3G network, and if it's radio you want... hate to tell you guys, but you're going to pay a metric assload less for satellite radio versus 3G internet access.
My XM subscription costs $130 USD per year.
My 3G access (unlimited data with unlimited tethering) is $85 USD per MONTH, which is only the data plan portion of my phone bill.
My opinion on why SiriusXM is tanking? They looked at all their combined radio stations, separated the wheat from the chaff, and gave us the goddamn chaff. The one channel I listen to the most (XM82 The System) was nixed in favor of something called Area, which in comparison, sucks. Even my wife who is not a die-hard electronica fan said that the quality went downhill. They screwed around with Chill, nixed Chrome, and I am quite certain that several other stations have been screwed around with much to the dismay of SirXM's subscribers.
They need to realize that most of us subscribe for literally a handful of stations, and if you screw with them, we get pissed.
Re:Is this serious? (not Sirius) (Score:2, Interesting)
I just came back from a road trip from Dallas to San Antonio and used my iPhone instead of my Sirius receiver.
Pandora worked 100%.
Battery lasted about 5 hours. A little less than the drive. I'll get me an in-car charger next time.
In areas with 3G (Dallas, Austin, San Antonio), I was able to stream radio stations from Europe, no problem. The rest of I35 had edge coverage, which works perfectly fine with Pandora.
I already gave up my XM receiver in my (other) commute car and use my iPhone instead (have 100% 3G coverage).
So in this family with 2 iPhones and (previously) 1 XM and 1 Sirius receiver, the iPhones are a viable alternative and it looks like the Sirius subscription won't last with us.
Re:Aw... (Score:5, Interesting)
Respectfully, no, it doesn't. I'm able to hear the channel I want during a whole drive across the US and even into parts of Canada. I'm able to get traffic/weather reports as soon as I need them, instead of waiting for every 15 min (or whatever.) I have my favorite channels where I know I'm guaranteed to hear the music I want, when I want it, instead of random shuffles of what I consider to be mostly trite current hits. For example, I love classical music. I have my choice of listening to the style of classical that I want (opera, traditional, etc) instead of a melange of different types on one station. Is there a lot of repetition on the channels? On some? Yes. More now since the merger? Sadly, yeah. But satellite radio competes with free services only in terms of what I listen to. But frankly, it doesn't compete very successfully.
Re:WiFi Radio, and I went to Slacker from Sirius (Score:3, Interesting)
Satellite could implement ban/next by changing the model. They could also fix the problem with drop outs of which I get dozens as I drive around. I'm letting my Sirius expire when the contract is up.
An alternative model would eliminate the existing channels. It would use the much higher bandwidth as a single channel to fill 8GB of local flash cache. Then an app in the radio would reconstruct the channels out of the cache.
Ban/next now become local operations. When you ban a song you knock it out of the cache and the cache then fills with something else. Over time it would learn what you liked. The incoming music would be pattern matched against your ban/like history. Drop outs are gone because the channels play from the cache.
RIAA is the main problem. They consider cached systems like this "copies" and want a much higher royalty.
Satellite radio is doomed, get over it (Score:3, Interesting)
First of all, many of the channels are not ad free anymore. If it's not a real ad from another company, it's Sirius advertising their own services. Sorry, an ad is an ad. I won't pay for a service that is suppose to be ad free but isn't.
Second, in the merger of Sirius and XM, they did away with 5 of the 7 channels I routinely listen to. They also did so with no warning. Good grief, Charlie Brown, at least Sirius XM could have come up with some notice about the changes coming (ever heard of email?). Better, they could have conducted a survey of their customers as to what channels were the favorites and dumped the least favorite channels first. Not sure if my channels would have made the cut but at least it would not have been arbitrary (or based on some out-of-touch business manager's decision).
Third, their customer service has always sucked, and their web site has always been less than friendly. At least in my opinion. Maybe it's a monopoly thing. Not a deal killer but definitely a strike against them.
Fourth, with the XM merger, now they want to charge even more money to access all of their stations (specifically, they have a list of "The Best of XM", which includes Oprah, various sports related channels, and some public radio). It's not like they're not already charging an arm and a leg, so to speak.
Lastly, their REAL competition is access to the internet from any location (car, airport, jogging track, home) by any hardware. And with better reception (mostly, anyway). In fact, I would expect broadcast radio to be following satellite radio in short order for the same reason (ubiquitous internet access coupled with DRM free music and the proliferation of podcasts).
So, as a business model, I don't see them remaining viable past the end of 2010. It may be a self fulfilling prophesy but I will not be renewing my subscriptions for the above reasons/rants/predictions.
Company was flawed from the begining (Score:2, Interesting)
I am a former alumni of the company that became the company that launched XM as a separate venture, then sucked the parent company dry to get XM up and running. The parent was renamed, and now it seems to be redirected to yet one more company. The ad copy in this current iteration reads the same promises that they were making to the market when I was freshly hired in 1996. If these people are still even remotely connected to what XM is today, then it's probably going to end up as more of the same, merger or else. It is sad because their technical people were top notch, all of this mess was because of the business side of the house.
I'll keep my Sirius, thank you. (Score:2, Interesting)
This article is garbage anyway because the author is really just an Apple fanboy preaching from the normal Apple fanboy pulpit about the superiority of the iPhone experience.
Just the same, I'll keep my Nokia E71 because it is a real phone that doesn't require being charged every 6 hours, and I'll keep my Satellite radio because the user experience for music is far, far superior to that of the iPhone.
I appreciate sat radio's niche (Score:2, Interesting)
Re:My humble opinions (Score:3, Interesting)
BTW, if your subscription is coming up, tell them you want to cancel. They will then offer a $77/yr plan to keep you. They are desperate to keep subscribers right now.
Re:Freedom to bitch. (Score:3, Interesting)
Re:The new Sirius lineup (Score:1, Interesting)
How in the hell do you go from RATM to Ozzy?
That's EXACTLY what clearchannel does around here. Sounds like XM/Sirius have been hiring from clearchannel, and that's exactly what they DON'T need to do.
Canceled (Score:2, Interesting)
I canceled my XM subscription on Nov 24th. I had been paying for 2 radios on a family plan. At first I listened to XM a lot, then over time I listened less and less. I listen to my mp3 collection at home, and local talk radio when I'm in my car.
Toward the end, what really started bugging me, was hearing songs repeated 2 or 3 times in a 4 or 5 hour period. This was on a channel that was supposedly pulling the play list from the last 3 decades. I imagine that, even restricted to a particular genre, 30 years produced more than 4 hours of play worthy songs.
So, in accordance with the service agreement they have online, I canceled my family plan via email. I got an automated email informing me that 1) they got the email and 2) how great XM is and thanks for being a customer.
I waited a few days and checked my account online and didn't see any indication that the status of my account had changed. Then I got another email saying that if I really wanted to cancel I'd have to call customer support. I guess the service agreement page on their website is meaningless since they don't abide by it.
So, I called customer service, and the nice lady who answered asked me for some basic information, got my account information pulled up, and then asked how she could help me. I said, I want to cancel my subscription.
That's when the hard core retention pitch started. Paraphrased:
Why are you cancelling?
I don't listen to it anymore.
What if we give you 3 months of free service?
No thank you, please just cancel the account.
Are you sure you don't want an extra 3 months to think about it?
No, thanks. Please stop with the sales pitch I just want to cancel my subscription.
Now here is where it got interesting:
Do you have a car kit? (I think: Wha?)
Just cancel my account.
Can you give your radios to someone else? (Me to myself again: Wha? -the other neuron kicks in- They must be getting desperate.)
Just cancel my account.
She finally gave up and told me the account was closed and the date my radios would stop working.
If I had an interest in listening to sports, or shock jocks, or more than a handful of music genres, I might have kept XM. But even with a radio sitting within reach from where I type this, I have hardly turned the thing on over the last few months, and I spend a lot of my time sitting right here. Sirius XM has a lot of competition, and in my experience it is just not compelling enough to be part of my entertainment budget.
Frank
Re:Crack Head... (Score:3, Interesting)
Hi, Newman, and welcome so Slashdot.
I'm an XM subscriber. I have been one for many years. With the recent XM/Sirius channel consolidation, the selection of music that I like has been drastically reduced. I expect that I'll be canceling my subscription within the next month. I couldn't care less about whether the subscriber base is growing or shrinking, the stock price, what XM/Sirius wrote off and when, or anything else as long as I can get the programming that I want at a reasonable price. Now that the programming that I like has gone away, there's no compelling reason for me to keep paying for the service. My opinion on this matter has nothing to do with the article at the top of the page. I had already reached my decision all by myself before I read this article, and I've seen several other people here making similar complaints. I wouldn't mind the merger at all if my favorite programming was still available, and I'd really like the merger if more new stuff was added to the programming that I like. However, as another commenter here wrote: "They looked at all their combined radio stations, separated the wheat from the chaff, and gave us the goddamn chaff."
if this article is any indication of the type of reporting this site does, I will not be back to comment again anyways. This is just another example of the crap reporting we are used to in this day and age. No research, no facts, just throw out some stuff and make an article you think will sell.
This site doesn't really provide any reporting; it mainly links to articles published elsewhere and lets people comment on them. It doesn't sell articles.
Anyway, if you have any connection with the folks who make programming decisions at XM/Sirius, please pass along some of the comments here. Maybe folks like me who feel cheated by the recent channel lineup change are in a minority and XM/Sirius won't miss our subscription revenue, but if we're not a minority, then XM/Sirius may have a really blue Christmas this year.