iPods In Autos; What's This Mean For Satellite Radio?
Monday, August 7, 2006 at 1:22 PM
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Late last week Apple announced that they've partnered up with GM, Ford and Mazda (which is... uhm... Ford) to allow for "seamless integration" of the iPod into their vehicles. In fact, the number was thrown out that more than 70 percent of new 2007 model vehicles sold in the United States will have iPod compatability.What sort of impact will this have on Satellite Radio? If you read into this ominous article - it spells certain death - but I'm not so sure about that.
Let's backtrack for a bit. None of this should come as a surprise for anyone. With millions upon millions of iPods sold, and 75 percent marketshare, there's no doubt in anyone's mind that this was bound to happen. Honestly, if this was a surprise, then you need a new crystal ball. iPods have become ubiquitous with digital music, and digital music is the evolution from CDs. The fact that some cars still offered cassette players simply became an easy solution to integrate the iPod with the vehicle for many people.
And actually comparing this "iPod integration" is with the cassette adapter isn't too far off. Ford's plans are to add a standard 3.5mm audio-input jacks into nearly half of its lineup starting this fall - as standard equipement. It's the optional equipment, like Ford's "TripTunes Advanced" (at a whopping $200, plus installation) and GM's "Personal Audio Link" (which runs $160, plus installation) that allow for the "seamless integration" of the iPod.
Spin spin spin.
In all probability, this could be a benefit for the satellite radio industry. Now your plug-and-play receivers don't even NEED to have any FM-transmitters setup, because there's a crystal-clear audio-input jack at your disposal (NAB take notice). With satellite radio receivers built from the ground-up for vehicle integration - what with easy-to-read displays, and driver-friendly controls (areas that the iPod is NOT strong in) - this could work out to HELP the industry instead of hurt it.
Now, it's not all roses of course. iPods are everywhere, and soon all the content stored on your iPod will be easier to hear in your car. This does provide a few roadblocks for satellite radio in terms of public perception. One - it's harder to justify the additional expense of satellite when a customer has already invested in their iPod (both with hardware and in content). So when they're in the showroom and thinking about what options they want, *perception* comes into play very quickly. Second - even if they do have the satellite radio option in their new vehicle, this creates an additional distraction to usurp listening time.
These two issues are *very important* to both XM and SIRIUS, because they depend very heavily on users experiencing satellite radio. Most people look at satellite radio as a luxury, not a necessity. So when it's offered to them for free for 3-months or a year, they'll take it. And only once they experience it, they love it and "can't imagine living without it." It's getting people to experience satellite radio that is the number one objective. Once they do, the service sells itself.
One solution is to get away from being standard-equipment in vehicles, and get into being standard-equipment. Once you eliminate the hardware/installation costs, no one will turn down a free no-contract trial subscription. No one. Another solution is to bump up the satellite radio services offering. XM NavTraffic and SIRIUS Traffic are key services that give users more than just "radio" - especially as GPS navigation systems become more of a necessity for drivers (again, another piece of hardware that people "can't live without"). XM ParkingLink again is on the right path. All eventually evolving into satellite "radio" estabilishing "The Connected Car."
A 3.5mm audio-jack which is the equivalent to a cassette player is not a threat. But have no doubt that the iPod is.
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Comments
An iPod is essentially a glorified CD changer - granted it's a CD changer which contains hundreds of CDs. If all people wanted was to listen to the music they own, what's the point of radio in the first place? I don't think this drastically affects satellite radio at all.
Posted by: waterwagen ? | August 7, 2006 1:42 PM
Brilliant post. Good way to put some potentially devastating news in a more clear light.
Posted by: Rob | August 7, 2006 2:20 PM
Just on the road and saw a guy with an iPod on his dash. He was fumbling with it for a good minute at the light. XM is way easier to use then that thing. Fancy people dont have time to discover, download and transfer their music like us XM'ers.
Posted by: tussel ? | August 7, 2006 2:42 PM
I would love to have seamless iPod integration in addition to my XM. Sometimes, I want to hear a specific CD, and plugging my iPod in would be nice. I still listen to CDs (usually of artists I discovered on XM), but mainly it's XM.
I wish auto manufacturers would include an aux input. It would cost them pennies and they could jack up the stereo price by $50 and we wouldn't flinch, since the upgrades are always insanely priced.
However, someone not exposed to XM or Sirius may be less inclined to jump in if they can easily play their iPods. Personally, I think that it's just a new challenge that XM and Sirius have to face -- like the do with HD Radio.
They both need to market smartly (if either really markets at all!).
Posted by: iband | August 7, 2006 3:35 PM
What did I listen to on my weekend trip to Pennsylvania and back? Glorious XM radio or podcasts on my iPod?
Why the answer is obvious Podcasts, except for the Ron and Fez replay.
Posted by: THEM ? | August 7, 2006 4:13 PM
iPod listeners are a different audience than satellite listeners all together but alot of people are both. Myself included. If all you want to do is listen to random music and/or handpick your selections, then iPod is the way to go. If you don't want to listen to the same old thing all the time and you want variety in types of programming without having to do work, then satellite is the only way. I don't think the iPod will kill satellite radio because they are in two different places.
BUT I still think both satellite companies need to focus more on home units. I'm shocked to see that there still aren't any good indoor repeaters out on the market. I can't get satellite reception inside at all. I have no choice but to use my iPod at home. Sure I can stream but I want my radio to be in a room without having to carry my laptop there.
Posted by: Frank Z ? | August 7, 2006 4:49 PM
My impression for future satellite radio is that they are going for an 'ipodish' unit that you can transfer tons of mp3's from your computer. the s50 does this but it has a fraction of the memory. if the portables had a shit load of memory, you have the best of both worlds.
Can you listen to a live football game on ipod?
Posted by: FaFaFluFly ? | August 7, 2006 10:13 PM
Well there's other points as well coming from a podcasters point of view. There are currently about the same number of people subscribing to podcasts as there subscribing to satellite and some analysts feel that podcasting may represent one of the biggest hurtles for the satellite industry because it allows for new content as often as the user wants to refresh... which also leads to the rumors of the wifi ports being built into Microsofts new Ipod wannabe and the rumors that Apple will be adding that into the Ipod. Right now not such a big deal... But I live in Toronto, a city that is about to be blanketed with Wifi access, and it's not the only one.. All of a sudden these devices can potentially pick up streaming internet radio as well refreshing their stored content wherever they are.
I'm not saying this is going to result in the death of satellite by any means, but it does present some real issues for them in the future
Posted by: RobOnt ? | August 8, 2006 11:18 AM
I'm not even sure the iPod will compete with Satellite Radio. If you pay $13/month for either/or satellite radio service, you get to hear something like, oh say, unlimited songs? On the other hand, at a buck-a-song onto an iPod, the same amount of satellite radio on an iPod would be nearly $10,000 a month. If you want to hear the same songs over and over until you buy some more, get an iPod.
Posted by: realwx ? | August 8, 2006 4:35 PM
I signed up for Sirius specifically to listen to Howard Stern. However, since he's begun taking a week off every other damned week, I've begun listening to podcasts on my iPod in the car and I'm now listening to podcasts instead of Sirius. I applaud the move towards better iPod connectivity. Oh, and by the way Howard, keep taking time off and people will forget about you just like a significant number of "Sopranos" fans forgot about the Sopranos after their 2+ year hiatus.
Posted by: Rob | August 8, 2006 6:46 PM
Another nail in the satrad coffin.
Posted by: Plowboy | August 8, 2006 10:39 PM
realwx: Yes. Because no one ever puts their own ripped music from their years worth of CDs onto the iPod they only buy it from the iTunes Music Store.
Posted by: James | August 10, 2006 1:02 AM