IMO, what the article is s saying is that satrad has to start thinking more about advertising. I agree. For satrad to absolutely come into its own and be a 100% success it has to be supported by advertising. AM-FM would have never made it had the listeners had to pay to listen. Forget about comparing satrad subscriptions to cable television. Initially, the main reason people went with cable was picture quality and not having to fool around with bunny ears or roof antennas. With the exception of HBO, etc. cable has always had advertising and then you pay extra for movie channels. Satrad must go the advertising route if it is to be profitable like investors want it to be. Google is a total financial success, not because it's a great search engine, but because of the advertising. That's where the BIG MONEY is.
If there's money in razor blades then give them the razor - Gillette.

I think before we get too excited, it is important to keep in mind that almost everyone who has an mp3-enabled phone has listened to at least one mp3. That does not mean that we go around using it as a significant source of entertainment. Similarly, watching "at least one" youtube video daily doesn't either.

It isn't to discount the importance of the cellphone as an "entertainment device", but a more telling statistic for those interested in satellite radio (one which is notably absent), would be, "What percentage of cellphone owners listen to content via their cellphones while driving or commuting.

Since we apparently don't have those particular statistics, we don't know to what extent sat radio might be affected by the use of cellphones as an "entertainment device".

It would be interesting to know how much of that "entertainment" is people texting -- an obsession with many, but one that hardly suggests "entertainment" in the traditional sense.

Importantly, the study was made based on INTERNET respondents, which means the results are essentially meaningless with respect to the populations of the age brackets as a whole.

"Note to Sirius and XM: If you want to ride this wave - stop thinking of your mobile services as a revenue generators, and start thinking of them as a lead generators. The key to adoption, is exposure."

I like this quote Ryan. Even though the key to adoption is CONTENT, I still like the quote.

About 5% of radio listening is done in the portable mode. This goes back to transistor radios, to boomboxes, to the walkman, to the discman. About 70% of radio listening is done in the car. So the car is key. Since these percentages aren't likely to change the way to attack that 5% portable audience is through the cellphone. Fully operable sat radio/ cellphones, because all portable music and entertainment will move from the iPod to the cellphone. Thats inevitable. Much like isp's went from AOL to cable and dsl.

Everybody has a cellphone and portable music inevitably goes there. Sat Radio should go there too. But most likely portable is only going to stay at about about 5% of radio listening.

The above was my comment Ryan. As if you couldn't guess.

Typically, Stack focuses on what is, as opposed to what will be. With the rapidly growing penetration of web enabled smartphones, from Blackberrys, Nokias to IPhones, ALL kinds of media will find their way into this distribution mode in a way few would have imagined only two years ago. I'm not sure if SatRad has a big role to play here, and how this market could be finessed, but rest assured it will be a big media market with many players and many technological changes to come, including 4G, and open software platforms, to name two examples.

BTW, Stack, it is against the law to use a cell phone while driving where I live. However, if it is music or talk content we're talking about, any portable device can be plugged into the Aux input many cars have, much as I do with my Inno/Helix device. I would concur with the anonymous poster that SatRad will be consumed mostly in cars, and home audio devices second.

>> Much like isp's went from AOL to cable and dsl.

The media guru is now telling us "ISPs went from AOL to cable"? LOL.

For satellite radio, exposure is what drives adoption. Yes, ultimately the listener falls in love with the content, but if they're never exposed to it, then they never have a chance to fall in love with it. (Think of your spouse/significant-other: it's his/her qualities that ultimately creates the attraction, but you need to meet them first.)

The majority of subscribers come from OEM trial users who convert into self-paying subs.

What would have happened if XM/Sirius required that consumers pay $6/month to hear a crippled service BEFORE they subscribe to the full $13/mo service? Adoption would drop like a rock, because you're hindering the catalyst that creates the full service subscription. If you hide your content behind a payment-wall, no one will listen.

The same applies to cellphone listening. If American's perceptions of cellphones are moving beyond a communication device, and into a entertainment (or more accurately a "lifestyle") device, then this provides a gateway for more exposure.

Seize the opportunity rather than scrounge around for pennies. That's all I'm saying.

"For satellite radio, exposure is what drives adoption. Yes, ultimately the listener falls in love with the content, but if they're never exposed to it, then they never have a chance to fall in love with it. "

Content drives exposure Ryan. The reason millions signed up for Sirius is basically for Howard. The reason millions signed up for XM is basically baseball. Not all, but millions. The reason Sirius' brand awareness numbers skyrocketed past XM's is Howard. Most people never even heard of Sirius before the Howard deal.

After Howard fans heard the rest of Sirius' offering, they said man this is pretty good. Content drew them in and created exposure.

Its like how I met my wife Ryan. My friend said there is this blonde with a killer body in his biology class who loves Howard Stern. I had to check out her content.

Right now Ryan, and you have mentioned this many times, Sirius and XM are both on cellphones. But the content offering that they have on cellphones at this point basically sucks. So basically who cares??

Now if you get Sirius and XM's full content offering on a cellphone then you get people interested.

Interesting facts :)

Thanks for the information :)

"The reason millions signed up for Sirius is basically for Howard. The reason millions signed up for XM is basically baseball. "

@MUSCLE13: That was two years ago. We're now in the 2nd consecutive November where retail sales declined drastically. Last November they dropped -42% year-over-year. This most recent November retail dropped an additional 24% YoY. Retail sales are in the toilet, and people aren't buying Fords because of the availability of Howard, and no is buying a GM because of the MLB.

Both Sirius and XM's subscriber base is driven largely by OEM subscribers, and the catalyst for the conversion is the exposure to trial subscriptions.

"But the content offering that they have on cellphones at this point basically sucks. So basically who cares??"

Exactly. So give it away. Get people exposed to the product, and maybe they'll get hooked. If it sucks, then why charge for it? The revenue is negligible anyway.

That's my point.

>>> The reason millions signed up for XM is basically baseball.

Wait a minute. Media Guru is claiming that millions signed up with for baseball? Did millions sign up with Sirius for NFL, too, I guess? What about the millions who signed up for NCAA games on either service? What about the Millions who signed up for commercial free music? What about the Millions who signed up for Martha or Oprah?

Can you provide one shred of evidence to support this absolutely absurd, obviously false claim? Did you bother to look at the recent Arbitron data?

Please explain on what basis, Media Guru, you make this claim?

"But the content offering that they have on cellphones at this point basically sucks. So basically who cares??"

Exactly. So give it away. Get people exposed to the product, and maybe they'll get hooked. If it sucks, then why charge for it? The revenue is negligible anyway.

That's my point.

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No No No Ryan! And you have said this before as well - Get the whole content offering on a fully operable Sat Radio/cellphone. Get something on a cellphone that is actually intriguing content that people will pay for!

As the repeater system and technology improves to get the chips smaller and reception better it can definitely work. Your guy David Bank even said cellphones in 2009 in a report last year. Ya gotta offer great content or people just won't be interested. There are too many other options out there.

Fee based subscription service may work in the short term, but for long term growth the "real money" is in exposure which is where the advertisers get in and pay for it all. Sirius and XM should stop trying to shake down the listeners for $12.95 a month. They'll pay for it for a short while, but come one money crunch and that's the first thing they drop. Give them the satellite service and use the wider listening audience as an alternate means of making money. Look at AOL, for years they charged $15 a month even though you already had high speed internet. They finally wised up to the fact that other internet providers were prospering without a monthly fee. Those other companies had greater exposure and thus greater advertising dollar revenue. AOL is now free. One could say that XM and Sirius are being penny wise and dollar foolish. They're missing the big picture.

Paul - AOL is one of the biggest business failures in the history of media. They had about a 300 billion market cap at one point. The bottom fell out.

Guys if you want satellite to follow a successful media business model, at least follow the most successful one of all time - Cable Network TV - ie ESPN or MTV networks. Thats content, distribution, subscription, advertising at its FINEST!

How about the New York Times? If you want to talk about a failed media experiment, just point to TimesSelect. Now that it's free, NYT is enjoying a significant increase in traffic, and in turn, revenue.

But I'm not disputing the subscription model (that's an entirely different post). I'm talking about driving subs here.

The reason why there isn't a compelling offering on cellphones has nothing to do with a conscious choice by Sirius or XM. It's contractual restraints with their content providers (so there ya go Muscle, content IS king!). The same applies for their online internet radio offerings. They both are crippled.

And I don't see that going away anytime soon.

So my point is, take a negative and spin it into a positive. Take the OEM model - which is proven to work - and apply it to the growing wireless segment. Offer 6-months free with every cellphone sold, and let people sample the offering. Since it's a separate stream, it would be easy enough to insert marketing messages every hour or whatever, to upsell to the full service, but either way - you're increasing exposure.

Yes, sure, once cellphones + SDARS chips are integrated and there's a market opportunity to sell the full service (even easier upsell). But that's counting on a whole lot of "ifs," "whens," and "buts." I'm talking about now.

That is sort of my point. If AOL had gone free earlier like MSN and Yahoo it perhaps would not have been the failure that it turned out to be. We could hope that Sirius and XM would learn from that and not make the same mistake by waiting until the horse is out of the barn. Subscriptions alone will not foot the bills. It will take a helluva lot of advertising to make satrad a universally accepted medium as the majority of the population just don't see the benefit - yet! The initial exposure has to be free and then, maybe, they'll be willing to shell out for some specific content just like television viewers do for HBO. Even if they stay as subscription service I don't think satrad will go away, but IMO it could fly a whole lot higher if the subscription cord was cut, at least basic service.

"Yes, sure, once cellphones + SDARS chips are integrated and there's a market opportunity to sell the full service (even easier upsell). But that's counting on a whole lot of "ifs," "whens," and "buts." I'm talking about now."

Patience Ryan, Patience. I seriously doubt sat radio gets fully integrated with cellphones and GPS systems in 2008. Probably 2009. My opinion is 2008 Xmas season we will see A La Carte radios and interoperable radios. So I think we have a lot to look forward to in retail for 2008 and 2009!

Happy New Year and get this merger approved Ryan! I am counting on you! Talk to ya in a couple of days.

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