Did the iPhone kill satellite radio?

Did the iPhone kill satellite radio?

Summary: A Slashdot post notes the sad state of affairs at satellite radio's Sirius XM and that it's starting to look like a "failed" company.why would anyone want to pay for proprietary hardware and a limited selection of a few hundred stations all controlled by one company?

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http://www.iphonebuzz.com/wp-content/uploads/2008/04/satellite-iphone.jpgA Slashdot post notes the sad state of affairs at satellite radio's Sirius XM and that it's starting to look like a "failed" company.

why would anyone want to pay for proprietary hardware and a limited selection of a few hundred stations all controlled by one company?

Since merging a year ago the combined Sirius/XM's stock has dropped from $4 per share to around 20 cents (a 97% decline), it is losing subscribers and has written off $4.8 billion dollars in stock.

To make matters worse neither Sirius nor XM have released an iPhone application, despite promises from a XM Satellite Radio executive in June 2008. The only alternative is to jailbreak your device and use uSirius.

The iPhone and the advent of free Web streaming via FStream, Pandora, Last.fm, etc. may be the final nail in the coffin for satellite radio's pay-for-bandwidth business model.

I'm still a subscriber to Sirius because I periodically listen to Howard Stern on the desktop thanks to Starlight. However, I didn't get Sirius factory installed in our last vehicle because it was part of a cost prohibitive package of options and I don't like external/third party adapters.

When my current annual subscription expires, It's going to be hard to justify paying $13 per month for something that I can get everywhere else for free.

Can anything save satellite radio?

Topics: Mobility, Hardware, iPhone, Networking

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17 comments
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  • A new business plan

    ....might be able to save Satellite radio. Because of the requirement of internet accessibility, satellite radio still has an advantage in certain environments (cars, for example) where AT&T's Edge network is the only way for a user to access the system.

    Also, the iPhone doesn't permit Pandora (or any other app except Apple's) from running in the background, so it is virtually impossible to multitask while listening to streaming radio.

    Satellite radio companies need to reduce their prices at the very minimum, and come up with ways to take advantage of the weaknesses of internet radio on the iPhone.
    steeldestroyer
    • Doesn't require internet

      Satellite radio DOES NOT require an internet connection to work.

      It requires an antennae. It comes with the unit, you stick it on your car, and away you go. You can access their online stations from the computer if you want. But it is not necessary. There is no reason to access those stations in the car. There are actually fewer online stations than there are regular stations, so why would you want to do that anyway? I'm not generally in the market of making my life more difficult in order to get less.

      And it's cheap. Really cheap. About $10 a month for something like 300 radio stations, an extra $3 for the online stations that keep me sane 8 hours a day, all of which can be listened to anywhere in the world. Even the receivers are dirt cheap. Mine was $50 four or five years ago. Still works great. But they updated their system, and I'm supposed to get a new one...on them...which I'll do eventually, but this one still works, so why bother?

      If they go under, it'll suck because I'll have nothing to listen to at work. But it's a load cheaper than any iPod/iTunes arrangement. 300 24/7 channels for $10....or 10 songs for 10 bucks. Not tough to see which is the better deal on that one.
      laura.b
      • Internet?

        Pandora and Flycast don't have to have internet either, they
        can run off a a 3G/2G network and you have an infinite
        number of custom radio stations available and it costs
        nothing and has absolutely nothing to do with any
        iPod/iTunes arrangement.

        Infinite channels, 24/7 for $0. Now which is the better deal?
        Synthmeister
        • Related to the article

          Thanks for the info.

          What does that have to do with whether or not the iPhone is killing satelite radio? Did I just miss the relevance of your post to the original article, or did you intentionally leave it out?

          But, if you want to argue this point...
          What part of "satellite radio DOES NOT require internet" made you think that a service that DOES require it (3G/2G is a data, ie internet, service) is a suitable replacement? NO INTERNET NECESSARY. No phone plan necessary. No data plan necessary. No data-transferring services that one would get hooked up to a phone/computer. NONE. You subscribe to the stations like you do TV. The antennae picks it up directly from the satellite, no matter where you are, and there are no areas where service is not available like a cell phone data plan or a city with no citywide-WiFi. It has nothing to do with the internet at all, in any of its forms. So, instead of paying $0 for the service and $40 for the data plan, you pay $10 for the service, and nothing for anything else. My math's pretty good, how's yours?
          laura.b
  • They are a product of their own demise...

    Back in the day (think 2004) satellite radio was AWESOME, we got what we wanted - commercial free music for a small premium (9.99USD). Then XM had this hairbrained idea to add "djs" and compete directly with FM radio (on what basis Im not quite sure) and destroyed it. The "djs" talked and then they ran "special programs" on channels that were supposed to have music. Um..this isnt what I was paying for. They have a lot of channels and they could have moved those "events" elsewhere - but chose not to and force it upon the subscriber base. I leave XM and go to Sirius, Lifes good again - for now. Now lets fast forward to 2008, the Sirus-XM merger, XM stations now dominate what was the Sirius line up and thus bring their inadequacies with it. Correct me if Im wrong but Sirius bought XM right? Why does the Sirius sub base have to take the poor XM channels thrusted upon us? Well I (and apparently many others) screamed at Sirius and they KIND OF corrected the problem, but it still sucks. Thus as a consumer I reduced paying 15.95 down to 9.99 - Sirius mostly music.

    The only thing that will save satellite radio is going back to their original intent, offer internet radio as a VALUE ADD [thats whats going to compete with FM radio] - no extra 2.99 (for Sirius only "cd quality", XM gets it free). Until then, we'll continue to see satellite radio go down the tubes so I definately wont be looking to replace my radio anytime soon because Im not sure how much longer SiriusXM will be around. However, the iPhone has NOTHING to do with the state of satellite radio - poor business models and choices is what is sinking them.
    JT82
  • It was having problems before anyone heard of the iPhone

    Satalite radio was having finacial problems long before anyone ever heard of the iPhone, so let us not heap unearned accolades on the iPhone as some testiment to its 'innovation' or the likes.

    Unlike many other forms of radio, the initial cost of designing, contructing, testing, and then launching a satalite into space puts startup cost well ahead of other forms om communications.

    To then have to purchase additional hardware and purchase a subscription plan also disquaifies a segment of the population from receiving it.

    In the end the math shows that it is quite a costly endevour that has a longer ROI then traditional forms of entertainmanet like satalite television, which can charge much higher subscription rates.
    GuidingLight
    • Plus, we're also now in a period where...

      ...people are looking to cut superfluous expenses from their lives. High capital-startup costs combined with high overhead, a requirement that users purchase additional hardware, and a monthly fee for something that for a critical mass of potential consumers is only marginally better than what is already available for near-free is a tough place to be business wise right now.
      JohnMcGrew@...
  • RE: Did the iPhone kill satellite radio?

    Have you really thunk it through?

    I have an iPhone and now it totally eliminates my desire to continue all my satellite radio subscriptions. Out of four I am down to one and when that expires in Feb they are history.

    My fee was fixed at $7 paid annually per radio but now they want to go up?

    A simple iPod with the free iTunes podcasts can completely replace XM content. Use your head and a search engine nnd find out what is out there.

    It gets a lot better with the iPhone. In addition to the free stuff you can store for where there is no signal. With the iPhone you can tune to thousands upon thousands of radio stations from all over the world for real time streaming of audio just like you get from a satellite channel. Some of those streams are totally free of commercial content.

    Others have the same amount of commercials XM or Sirius does.

    Apple technology is a far better solution for me then I had over the last five years with XM.

    IMHO I am not the only one to realize this and that is why I think satellite radio is doomed.

    BTW another revenue stream for XM wa video to special receivers of live weather and wx data used by EMA and the Red Cross at serious incidents. This was at a cost of over one hundred dollars per month per unit. I get all that data and more for free on the iPhone. Who needs XM?

    The few who do should pay for the service through the nose to keep it alive, the rest of us do not need to shoulder that expense for entertainment or safety should not be forced to do so.

    I don't mind the revenue that was going to XM/Siruis instead now going to Apple and AT&T for giving me more options over a wider area and in more situations.
    vic.healey@...
  • Wow man....IPhools are everywhere.

    I mean folk must love saying IPhone or something. Now the streaming media sites may have helped bring down satellite but what in the world does the IPhone have to do with it. Yes it adds another way of being able to carry your streaming music around but good grief. People do use these sites on their PC's at home and at work.
    storm14k
    • Portability

      The iPhone allows anyone to use all the streaming media
      sites like Pandora & Flycast in a mobile fashion. In other
      words, why pay for yet another gizmo/subscription when you
      can do the same thing with you cell phone.

      You can use Pandora with Blackberrys as well, so why would
      anyone pay extra for Sirius?
      Synthmeister
      • I think you made his point

        [i]You can use Pandora with Blackberrys as well[/i]

        Which is exactly what he said. Streaming content, not specifically the iPhone, creates a problem for satellite radio. Why act like the iPhone even has a dog in this fight that other internet-ready phones don't have as well?
        laura.b
  • RE: Did the iPhone kill satellite radio?

    True. You can certainly listen to MP3's on your PC at home or
    work, but that did not stop Apple from making the iPod into
    a multi-billion dollar business and grab 80% of that market.
    The same thing is happening again, but at satellite radio's
    expense this time.
    veggiedude
  • RE: Did the iPhone kill satellite radio?

    I HAVE HAD SIRIUS FOR ABOUT 3 YRS, (3 RECIEVERS, AND AFTER ONE, THE SUBSCIPTION DROPS TO HALF) AND SEE NO WAY FOR THE I-PHONE TO REPLACE IT. I GET IT ON-LINE(FREE), IN MY VEHICLES, AND ON MY SPRINT PHONE(IT,S AVAILABLE W/ SIMPLY EVERYTHING PLAN AND I THINK $ 3.95 MO.) I DON'T HAVE TO PAY FOR AND DOWNLOAD, AND MANAGE A SONG LIST, AND THE MUSIC IS UN-EDITED(COMERCIAL FREE) AND SOMETIMES NOT YET RELEASED YET,SPORTS(NASCAR W/ IN-CAR AUDIO) AND I CAN SILL TALK ON MY PHONE AT THE SAME TIME
    dougbell
  • not yet for this guy

    You people must all be urbanites. I don't have iphone available here North of Superior. No cell phone will work all along the way either I don't even have free radio through the 750km trip across the big lake via the trans Canada highway. While XMsirius is expensive it is available and a lot safer than changing CDs every 70 minutes or so. By the way why would anyone walk around with an earplug in their ear listening to their telephone? It is painful to think about, ouch.

    Speaking of expense for a moment. Ipnones are expensive and so are subscriptions to XM but people who buy Iphones are inclined to want to keep up with the Jones and so will replace their Iphones every 2 to 3 years in order to get the newest products While the subscription goes on with out replacement hardware.

    This is also a request that the subscription price decrease some cause it is expensive.
    philmint@...
  • One down, two to go

    My wife and I have been with XM for more than 5 years, and in that time, there have been content changes, and now with the merger, there have been more changes. However, the changes are not what are driving our current decision. We have had three units, one in the house, and one in each car as integrated systems. What we have found, for us ? and this by no means speaks for anyone else and their needs ? is that having the unit in our house actually stops us from listening to, and enjoying our own music collection. That, and the opportunity to trim out a recurring expense in an age when every company is looking for ways to lock each of us into recurring monthly expenses.

    We will keep the two car units, they are a life-saver when you drive 70 miles a day in city traffic. I enjoy my iPhone, as does my wife enjoy her iPod, but each of those does not lend it self to spur-of-the-moment listening. XM/Sirius has a station to match my mood. And like others have said, I like my phone to be available while commuting, and having a third-party app running does not meet that requirement.

    There are a host of reasons why satellite radio is struggling, most of which have to do with the very same reasons that terrestrial radio is struggling. Listeners are choosing to plug into their digital media players, and no longer rely on a provider for their audio entertainment. Terrestrial radio has always been based on advertising revenue, like television, newspapers and this very internet news site. Unless the provider can charge enough to cover their expenses, their business model will fail.

    Part two, is in a weaker economy, less money is spent on marketing, so there is less money to grab as a content provider.

    Part three is what is hurting satellite. Their original business model was subscription based. There are very few successful content providers that can cover all their expenses through subscriptions. Most require advertising to pay the bills. In order to recover their operating costs, it is likely that based on their current subscriber levels Sirius/XM should be charging more per unit. But doing so would damage adoption rates needed to become profitable based on subscriptions alone. So, they play a balancing act: Sell subscriptions at a rate they believe will attract more listeners (any attrition comments made here are anecdotal at best) and allow advertising on some of their stations.

    To say a company is going to fail merely based on their current stock price, particularly when there is as much uncertainty in the stock market as there is today is somewhat short-sighted. Investors are saying, with the low stock price, that they do not see much in the way of future earnings potential. That does not, however mean they will be out of business next month, or even next year. There is a lot of money tied up in these ventures, and I am sure they are looking long-term when it comes to any ROI.

    And remember, just because you are tech-savvy, and know where to get the latest and greatest media hook-up, does not mean that your parents, neighbors and grand parents do. Some people just like their technology to work, and not need to be worked on.
    smartpig
  • RE: Did the iPhone kill satellite radio?

    The whole idea of creating a business model around a
    monthly subscription for radio was ridiculous. Why people
    would pay yet another monthly service fee to listen to radio
    stations is beyond me. I can see where this service would be
    valuable to a small niche group like people who spend a lot
    of time
    commuting by car, or travel regularly by (salesman,
    truck drivers) etc., but for the rest of us, this was a fad,
    something new to try, and something we didn't need.
    Masari.Jones
  • Did the iPhone kill satellite radio? Either that or save it

    I think the only thing that saves Sirius/XM is the talk stations. The one thing Pandora will never offer is live human beings saying something topical. Many subscribers adjust the dial to either Opie and Anthony, Howard Stern, Sports or political talk and leave it there. When I want music I listen to Pandora or my Ipod.

    Sirius/XM needs to stop competeing with Ipods and embrace them. Sure it will kill the sales of the actual radio units, but it will increase the subscriber base. They need to create an Iphone app and they need to do it now.
    robb28