I was reading an article in the Washington Times when this quote from iBiquity's CEO Bob Struble jumped out at me:
"Five years from now, you won't walk into a Best Buy and say, 'I want an HD Radio." You'll just say, 'I want a radio' — because that will be the standard."
Uhm, yeah. Here's a reality check for everyone in the industry, including satellite radio: people don't walk into a Best Buy and buy a radio. They don't. Radios come with your car. Radios just happen to be part of your alarm clock. Nobody walks into a store looking to buy a radio.
The "tabletop radio" segment, which consists mostly of alarm clocks, isn't something that people buy on a whim. College kids buy "tabletop radios" because they need to wake up after a night of hard partying (and guess what, a cellphone works just as well). They don't buy a radio because by-golly they need to have a radio. That AM/FM functionality is just there by default. Oh, and that alarm clock they're looking at now had better have an iPod charger included.
Now this might come as a surprise to everyone, because we all at one point in time decided to buy "a radio." But you didn't buy a satellite radio. You bought Howard Stern. Or Opie and Anthony. Or NASCAR. Or the MLB. Or the wide range of music that you can't get anywhere else. You bought the convenience of hearing this content wherever you are. The radio you purchased was only the vehicle - it provided the functions you needed to access that content you wanted.
So here's the newsflash to Bob Struble and all the other suits getting ready to yuck-it-up at the NAB Radio Show this week... in five years? No one is going to be saying "I want a radio" when they walk into Best Buy.
Damn right! That was a great article!
Excellent point, Ryan. Too bad XM didnt figure that out sooner, its not so much the technology, Content is King!
I totally agree. Every radio I own is actually used for something other than AM/FM. My stereo receiver is for watching movies, TV, and XM. My alarm clock is for waking up to the iPod. And my old CD player boom box was purchased in 1992 for listening to CD's. In fact, the only radio I have for radio is an old one sitting in my garage that was left behind by a former roommate, which I use to listen to NPR on Saturday mornings while I work on a car.
The only radio i listen to is local AM sports talk, thats it. The only other time i am thinking about radio is when i'm cursing it out for interfering with my s50's fm modulator. Maybe the NAB and the power that be, for sake of fairness and competition, will free up one or two nationwide frequiencies for FM modulators. I'm sure they'll read this and get right on it.
Well, the future of audio broadcasting will be either on satellite (where any program can be heard nationwide) or via the internet (worldwide). I think it is safe to say the days of static and the like are long gone for those of us who manage to follow the new technologies.
Best post ever Ryan. Way to go!
I was talking about HD radio vs. satellite last night with a friend who did a lot of design work on HD radios (stuff that was intended to sell in retail/online stores).
The way I look at it, the only advantage of HD radio over 'regular' radio is that you can have multiple streams with different content on it. If you're in you car, you have to either buy a new head unit (mine supports HD Radio as an add-on), have it come with the car (i.e. buy a new car), or find some way of wedging HD content through a standard radio. That last solution could be as easy as having a low-cost repeater that receives HD radio signals and then rebroadcasts locally so you can listen to all the channels, but keep your existing head unit.
Too bad the NAB screwed that plan when they complained to the FCC about the radios for Sirius and XM.
Me? I'll stick with my Sirius. I can already get all the extra channels I want.
Excellent - you are one of the few to acknowlede this point. Struble, as usual, is so full of shit! HD Radio stillborn from lack of consumer interet:
http://hdradiofarce.blogspot.com/
Ryan,
I appreciate the article and for the most part agree. But when it comes to SDARS & high end radios we do indeed buy the radio. I have had several PnP's that were cheap and a means to accessing content. I bought them for O&A and music but I bought an Inno on day one not for the content, I already had that, but for the advanced feature set of the radio itself. Same with the Stiletto. I had a cheap PnP but specifically wanted to buy the new radio for its features. I don't think this applies to AM/FM but currently the additional abilities of high-end SDARS radios do drive people to "buy a radio".
Excellent post Ryan. I have a $500 "radio" in my living room in the form of a Home Theater receiver. I don't even have an FM antenna hooked up to it. Anytime AM/FM radio is advertised as a feature I always laugh. My wife and I bought a boombox recently for the FM tuner, but that was so we could use our MyFi at the beach/BBQs. It's such an advanced piece of technology it even has a tape deck in it.
XM/Sirius need to get the receivers and service in people's hands. I imagine they have a ton of Roadies, Sportscasters, etc in their warehouse collecting dust. Start an online ad campaign, give those receivers away for free, no questions asked. Give them 3 months of service. If nothing else, you save money on storage.
And after 3 months with one of those old units, I'm sure they'd want to buy a new one.
@Bandwagon03: I'm not sure I agree with you there. That's inferring that XM's content isn't high quality, which isn't the case. XM's content is absolutely spectacular and I think they're getting better.
@Tim: You absolutely got it. Radios are part of things, not the item of focus.
pfreak-
I bought an inno for the features too, but you know what those features are? The ability to record the content coming from XM. I could have bought a tape recorder or an mp3 recorder that taps into fm but I didnt. I wanted to record the content XM streams and the newer radio let me do that more efficiently than my airware.
so while I did indeed buy a radio for the hardware, I wouldnt have done it without XM being around, so technically i bought xm with some good features.
Speaking of content and distribution Ryan, here is an interesting question for you. In 2 or 3 years when every single cell phone used in this country has MP3 player functionality why would anyone buy an iPod? If you can get the exact same function on a cellphone with no extra cost why pay for an iPod? It has no content. Its just a device.
Technology and distribution are always changing. Content always find distribution. Get Howard's show on a cell phone Ryan!
@pfreak: You're right, from an experienced user's standpoint, the radio makes a big difference. But again, that's just the vehicle for accessing content. The Inno and Stiletto allow you get the content on-the-go (for me, it's while on the train). They allow you to record and replay the content, etc. They're still a means to an end.
It's just funny to me that someone actually thinks of the scenario when someone will "walk into a Best Buy looking for a radio".... there's a lot of things people will be looking for in 5 years, and RADIO is not one of them.
Ryan:
XM's content is much improved from what it once was. I was just referring to the early days of XM (remember when they proclaimed they were a technology company?). Sirius never shied away from being called a Media company, and especially in the early days, there hardware was lackluster compared to XM's Jaw dropping technology. The point being that Sirius, (I think) bought into "content is King" long before XM even considered it. You are always going to have early adopters and audiophiles, etc, but for Joe Public, it is, and always has been about the content.
>>> Too bad XM didnt figure that out sooner, its not so much the technology, Content is King!
A little off-topic, but this is a funny remark, given that Sirius subscribers overwhelmingly support the merger while XM subscribers overwhelmingly oppose it.
Why is that, anyway?
"A little off-topic, but this is a funny remark, given that Sirius subscribers overwhelmingly support the merger while XM subscribers overwhelmingly oppose it.
Why is that, anyway?"
Easy answer. Relative intelligence levels. Ryan is an exception to that rule. :)
>> Relative intelligence levels.
Very snappy reply, but the question was a serious one.
Siriots are fond of claiming "content is king", but when it comes down to it, they are obviously unhappy with what they're getting. If you read the posts on these message boards, it is clear that Sirius listeners are not happy with the content as it is (LOL, with E Street Radio returning to consume an entire channel, that is just tough to understand) while XM listeners are, for the most part, pleased with the deeper content.
The fact is that Sirius has out spent XM by a mile, and by doing so, they got themselves some dedicated faithfuls who are enthralled with Sirius, but not so much that they want to keep it like it is. XM didn't spend the big bucks on Stern and others, but has focused on better content from the outset, and today, judging from the disparity in merger support, one can only conclude that XM is winning the content war.
I bought XM radio for 69 commercial-free digital music channels, coast-to-coast.
HD radio can't do commercial-free OR coast-to-coast.
"Speaking of content and distribution Ryan, here is an interesting question for you. In 2 or 3 years when every single cell phone used in this country has MP3 player functionality why would anyone buy an iPod? If you can get the exact same function on a cellphone with no extra cost why pay for an iPod? It has no content. Its just a device."
@MUSCLE13: This is exactly why Apple has launched the iPhone. The reality is that MP3 functionality has been embedded in phones for a couple years now, but it's not the the functionality that matters, it's how you interact with the device that makes all the difference. People actually have an emotional connection with their iPods.
Don't underestimate Apple's involvement with the iPhone. Prior to the iPhone, it was generally regarded that Americans want two things from a wireless carrier: 1. Free phones; 2. Cheap service. But the iPhone, with it's ridiculous pricetag, blew that out of the water.
In 3 years? I guarantee that cellphones and digital music players will be merged and commonplace. And I guarantee that Apple will be leading the charge. What Sirius/XM need to do is get their chipset small enough to fit INSIDE a common cellphone. I don't mean the boring XM Radio Mobile and Sirius Mobile offerings (a whole separate post btw), I mean REAL SATELLITE RADIO in a mobile device.
And it cant be only in a cellphones.. satellte radio needs to be embedded EVERYWHERE. Every new electronic device MUST have satrad built-in, because we need to remove the "radio" from "satellite radio" and let people who normally wouldnt be exposed to the services actually experience the product!
@Bandwagon03: You're right, XM focused very much on the distribution side of things. They pushed the techie side because they were appealing to early adopters (and mind you, it worked!). At the same time, I think XM concentrated very well - and continues to do so - on the music side of things. Lee Abrams' creative guidance has made listening to XM truly enlightening and enjoyable.
XM failed on the marketing side. Sirius learned how to harness the power of celebrity names, and push that they are the "content leader" in the segment. NFL was a huge deal because it's a sport that's nearly ubiquitous in this country. The addition of Howard Stern then created that EVENT that brought it all together and created MINDSHARE.
...and MINDSHARE = MARKETSHARE. That's why Sirius is winning in retail and growing at a faster pace.
But I hate to see XM referred to as a the content "underdog" in the comparison, because that's entirely not the case. XM just didn't do a good job of selling itself and of showing off their strengths. People identify with the FAMILIAR, and the celebrity names that Sirius was able to capture allows customers to identify with Sirius over XM.
Still, those who experience the product, love it. 50% of OEMs convert to satellite radio. 50%?!?! That's 1 out of every 2 people with satellite radio installed in their cars. That's a RIDICULOUS conversion rate! And that goes back to the EMBEDDING SATELLITE EVERYWHERE thought...
/rant
(Side note, I really need to improve the comment functionality on the blog... replying with these "@" symbols all over the place is archaic.)
@StackPointer
As a Sirius fan, I was going to write out an explanation on why I think the merger could be good for both companies. But why should I bother? Neither of us are going to convert the other.
However, you obvious hate for Sirius has always baffled me. It comes seething out of you on every post you make. I suspect you are a pest that is terrified at the thought of your precious bbboys being silenced post merger. But I could be wrong about that. Either way, I respect your opinion.
Muscle. Maybe Apple should get into the phone business then.
Ryan:
Yes, that is kind of what i was getting at, i am not disputing that XM is a good service, or that Sirius is BETTER, just saying that with the signing of the "Big Names" that put Sirius on the map. Granted Sirius is still paying a dear price for that, but, like it or not, retail has changed for them dramatically.
Sidenote: You probably dont want to do this, but why not "disable" qoutes and have all comments be put in the forum?
>>> I suspect you are a pest that is terrified at the thought of your precious bbboys being silenced post merger.
Your criticism notwithstanding, the question is still unanswered. Why is it that Sirius listeners want XM content but XM listeners don't seem interested in getting SIRI's content?
In 3 years? I guarantee that cellphones and digital music players will be merged and commonplace. And I guarantee that Apple will be leading the charge. What Sirius/XM need to do is get their chipset small enough to fit INSIDE a common cellphone. I don't mean the boring XM Radio Mobile and Sirius Mobile offerings (a whole separate post btw), I mean REAL SATELLITE RADIO in a mobile device
Agreed on all counts except Apple will be one of many players in the field. They will not dominate cellphone/music devices. In fact they are already late to that game. They may be big but they won't dominate the way they did with iPods.
@ robdbx (Hey Ryan, this @! thing is kinda catchy)
Stack's upset the Satellite Sisters got canned. Give him time to grieve.
@ Ryan
Isn't XM still leading the way in terms of overall subscribers? Also, if XM works towards embedding itself everywhere, XM needs to ease up on the one subscription per tuner setup. Sirius as well. The Family Plans are great, but if I want XM in my car, living room, alarm clock, kitchen, garage, cell phone, boombox, etc I don't want to pay a fee for each device. There has to be a solution to this. The Mini Tuner is nice, but anything that requires more than pushing power button on the device loses the basic consumer.
I see it the other way Stack. I looked at the post merger offerings of both and I don't want XM's content either.
Bose sells a ton of AM-FM radios at $350-$500 each. When you buy a Bose radio it is for the quality of the sound and nothing else. They put an alarm clock in it, but as the radio is placed in an office or living room, the alarm feature is never used. Great sound!
I guess that Bose is waiting for the dual format radio before commiting to satrad.
Actually I just bought a Tivoli Model One tabletop radio and I love it. I'ts beautiful in design and function, but I must admit I don't listen it to it that much because of commericals. And ballgames are on XM too.... I know they make Siruis Tivoli radio, but If I wanted to listen to Sirius I might as well just listen to the radio cause they both only play "hits."
This talk of the radio in the cellphone is horrible. I hope it never happens. MP3 files have ruined music. No one knows what good hi-fidelity music sounds like anymore. All this compressed music coming out a tin can speaker stinks. SatRad could do more in this front by increasing bandwith. I would really like to have better sounding music than another SEC football channel.
You actually bring up a good point. I bought a Cambridge Soundworks 88CD desktop radio specifically to listen to the radio. I wanted something smaller than a stereo but with great sound. And I wanted it for only for FM radio (this was before I got into SDARS). I guess it's a small market but I also looked at Tivoli specifically for FM too.
Mark S., I hear you, you could do those things but the fact is the device is what makes it so desirable. It breaks the songs up for you. Allows you delete any unwanted songs/promos, create playlists, schedule recordings, record even when the song is just about to end. It does a lot that a tape deck doesn't and it's all integrated into the radio. If you just want content you can get that from a $30 PnP. You pay the premium for an Inno because you want the radio and what it can do. There was a lot of opinions when the 1.05 firmware upgrades took away full functionality of FM Mod. You can always add on an aftermarket FM Mod but it's not as good a solution as having it in the radio already just like using a tapedeck or mp3 recorder works but are not ideal solutions. If you were okay with those options, you woudn't need to spend the premium on a top end receiver in the first place.
Actually, now that I think about it, if HD radio was really that great, and in a market like DC I could get feeds for 10 stations, at 6 subchannels a piece for a total of 60 stations, then I would buy an inno-like radio for $200 that picked up HD.
Allowing me to record HD radio staions with tags, and delete the commercials instantly that I didnt want would be worth the purchase price. I doubt the NAB would allow something like this to exist on a "free" service though.