Satellite Radio and the Hype Cycle - Orbitcast

Satellite Radio and the Hype Cycle

| 24 Comments
I've been giving a lot of thought lately about how Satellite Radio has matured as a technology and media phenomenon.

Sure, we've heard all the talk about how the industry has grown faster than satellite TV, cellular and even CD players - but that all seems unreasonable with all the bad news surrounding Sirius XM Radio Inc.

The question I have is whether all the bad news - while very much real - is also being greatly exaggerated.

Enter the Hype Cycle.


Hype Cycle

It was only a few years ago that Satellite Radio could do no wrong. Both Sirius and XM were signing on talent at a dizzying rate. Debt made no difference. Contract prices? Who cares! This was the future of radio, and subscribers were coming on at a maddening pace.

There was a drunken exuberance in those days.

That exuberance extended until mid-2006 when both companies had to shut down retail shipments thanks to overpowered FM transmitters. That was the first bump in the road. But the merger announcement allowed the hype to continue.

But as time continued, and the merger proceedings continued on and on (and on). Finally, when the merger was approved, everyone had already had enough. Satellite Radio was no longer a darling technology. It wasn't that they could do no wrong... now Sirius XM could do no right.

So what does this have to do with the Hype Cycle? A lot actually.

The graph you see above is a classic Hype Cycle, as characterized by research group Gartner. (Background: I was formerally employed at JupiterResearch, which is now part of Forrester Research. And Gartner isn't a small research shop, they're one of the most respected research firms out there with some amazing intelligence behind their walls.)

The Hype Cycle is comprised of 5 main areas:

  • Technology trigger. A breakthrough event (like a product launch) that generates significant press and industry interest. For satellite radio, I would argue that the signing of Howard Stern was this trigger.
  • Peak of inflated expectations. A phase of overenthusiasm and unrealistic projections during which a flurry of publicized activity surrounds the medium.
  • Trough of disillusionment. The point at which the technology becomes unfashionable and the press abandons the topic, because the technology did not live up to its overinflated expectations.
  • Slope of enlightenment. Focused experimentation and solid hard work lead to a true understanding of the technology's applicability, risks and benefits. Commercial off-the-shelf  tools become available to ease the development process.
  • Plateau of productivity. The technology becomes engrained within the common culture while the kinks continue to get worked out.

According to Gartner, the final height of that plateau will vary according to whether the technology is broadly applicable or only benefits a niche market.

So out of those five-phases, which do you think we're in right now?

My guess is the "trough of disillusionment" came to mind. Investors are disillusioned. Many subscribers are disillusioned. Many employees are disillusioned. The expectations, and the hard work of the past, all seem for nought. The only press the company gets now is negative press. It feeds upon itself.

But if Gartner's Hype Cycle holds true, then things will normalize in time. We'll learn how to make a viable business model out of this thing - in a way that satisfies both subscribers and accountants alike.

Of course it won't be easy, and I'm definitely not saying it's a guarantee. But mapping Satellite Radio to the Hype Cycle helps put it all in context. What are your thoughts?


Mastering the Hype Cycle Want to learn more? Check out "Mastering the Hype Cycle: How to Adopt the Right Innovation at the Right Time" by Gartner analysts Jackie Fenn and Mark Raskino.

It's a really facinating book on the research methodology surrounding the Hype Cycle.

24 Comments

I think it's in the going to die phase.

It's detractors... are in the "I would die and say almost anything negative" for 20 MILLION subs' phase.

Trough of disillusionment..
Making us pay for online is pushing us in to the arms of companies like Slacker and Pandora. And you know what, I kinda like them better; they don't play the same songs over and over. I mean really come on now Sirius; You need to go back to music programming of XM (read: endlist DEEP playlists). Reggae, GD, jam, jazz, it doesn't matter, they keep to a small list of tunes and thats it...
On the first day of the 'NEW' programming; I heard the same hour and a half show twice on the GD channel. Nice - 3 hours of repeats on the very first day (and out of litereally millions of hours of GD recordings and live stuff)..
Sirius, you seem to have no idea what you are doing...(compared to the music programming coming out of XM before the merger)..
Good Luck with that!!

I would say the "Kamikaze dive of utter self-destruction" phase

Rut-roh, someone's on damage control. 2008 sub numbers lower than estimated?

I would have serious misgivings quoting Gartner on anything, much less calling them "one of the most respected research firms out there".

Based on too many years in the IT industry, my observation is that Gartner simply acts as a buzzword generator for Dilbertesque pointy-haired types obsessed with being on the upper-right-hand side of the Mystical Quadrangle...

there is no reason to try the analize and make excuses why we are listening to the final days of what was once known as the satellite radio fad.

Paying for radio is for newbs and suckers.

Ryan is correct. Sirius is following the hype cycle perfectly. The technology trigger caused the stock to shoot up to $60. People are like sheep, so when a few took profits, everybody headed for the door and the stock tanked. The massive debt taken-on with the merger coupled with the credit fiasco, not to mention Jim Cramer's reckless comments last July sent the stock to 8 cents.

I know the amount of debt is staggering. However, and this is a big however. More than one lender is willing to loan Sirius money. If the loans go through in two weeks, we will enter the slope of enlightenment. With $2 billion in cash coming in every year, they should pull through this.

I hope they do. I like my Sirius setup. I don't have to download anything to anything, or figure out how to use a Slacker. All I have to do is start my car and it's there.

I would say that it's in the "this catastrophe could have been averted if management wasn't so god damn STUPID and would have the good sense and common courtesy to LISTEN to the SUBSCRIBERS phase."

Listening to terrestrial radio is for ignoramuses and suckers.

Nice try, Ryan, but it's useless to try and start an interesting exchange of ideas with the collection of monotonous complainers hanging out here these days. It's hardly worth the trouble to click on comments, since you already know it'll be Steve O, Rando and their fellow lame-o's with the same comment over and over. Talk about repetition!

Bargaining phase. Depression follows, and then acceptance. After that: the undiscovered country, from whose bourn no company returns.

WWD,

You bring up an obvious point that still has not sunk into the feeble minds of white trash, unsophisticated conformist sheep; you don't have to download anything, you don't have to figure out anything - all you have to do is hit the "on" button and you have radio that renders terrestrial obsolete! The case for satellite would be even more convinving if the braintrust of this company wasn't so busy destroying it!

I have never seen such a love/hate affair with any other product or service in my entire life. I hate to generalize, but I have come to the conclusion that most people who hate satellite radio are really narrow minded and extemely naive. They have predetermined opinions and make foregone conclusions about it, without knowing ANYTHING about it.

There has to be something wrong with anybody who listens to terrestrial radio. They are either mentally challenged, or actually retarded. Anybody who listens to it is automatically on my shit list, because they are usually very annoying and dumb. Terrestrial radio should pay people who listen to it - to compensate them for the pain and suffering associated with tolerating such abysmal shit.

>There has to be something wrong with anybody who listens to terrestrial radio. They are either mentally challenged, or actually retarded. Anybody who listens to it is automatically on my shit list, because they are usually very annoying and dumb.

Hmmmm.. Aren't they the ones with an extra $156 after taxes in their pockets every year?? Plus the cost of the radio. Who are the DUMB one's now?

Average American spends 24 minutes a day commuting round trip.
http://usgovinfo.about.com/od/censusandstatistics/a/commutetimes.htm

That's 12 minutes each way, or 1.8 cents a minute to pay to listen to radio.

Listening to FREE Terrestrial Radio. ZERO DOLLARS!! Not having people laugh at you when you tell them that you actually PAY to listen to radio..... PRICELESS!!!

And so it goes,
PCSTEL

Thanks for your very kind words Ryan.

I noticed DAB follow the hype cycle in the first half of this decade in the UK (we don't have satellite radio here). DAB radios now occupy significant shelf space in electrical stores and are penetrating the UK market well. Yet after the initial wave of excitement regarding the digitization of radio, in 2002 I was told by one industry executive that 'everyone knows the acronym stands for dead and buried' i.e. it would never take off.
Sometimes technologies do fall off in the trough and completely disappear, but that's unusual. It is normal for them to find a productive role eventually, but one which doesn't quite rise to the initial hype.

This blog continues to suck more and more everyday. I think it's also in the Trough of Disillusionment. Maybe it should be renamed to Negativecast.

I've never seen such a bitchfest. You want inspiration? Don't visit this, or any other site dealing with satellite radio.

It is over. Look around the user boards sfn, btls the thrill is over. I stream slacker in my car and it works better then Sirius. I have a 45 minute commute and it is nice not to loose signal if I have to stop under a bridge.

Slow car sales, replaying FM radio, price increase on extra subs, Stern and Bubba telling people to cancel all do not bode well for sirius.

I canceled 2 subs already and my 2 on yearly will probably not be renewed.

In an overpopulated world of depleting resources where we finally "discover" (doh) that unlimited growth and consumption simply cannot happen on a finite planet, it is hard to see how satellite radio will be much of a priority.

Sorry, but I do not think we can spend ourselves out of debt, develop ourselves out of resource depletion, or "green" ourselves out of unsustainability. For us to survive we all must drastically cut our consumption and carbon footprint.

Satellite radio is no exception to this.

Anonymous,

There is nothing on this site more repetitive and monotonous than your incessant whining about "complainers." If you don't like the fact that a whole lot of people are pissed off, then do yourself a favor and stay the fuck off this site. People who have a vested interest in this company are being jerked around, while simultaneously being ignored by management. What do you expect us to do - pretend that everything is hunky dory, and just sit back while this company destroys itself?

If you have something that is so interesting to say, something so fucking profound that the world of satellite radio will come to a screeching halt if you don't declare it, then by all means please share it with all of us. Not only do you complain more than even the most ardent disenters on this site, you hypocrite, but you serve no purpose whatsoever with your asinine comments. Why do you get your frilly pink thong in such a wad over some people who elect to listen to satelliite radio? I would never impose my personal beliefs on you and be so intrusive, so obnoxious, so annoying. What I do, and what fellow subscribers do is non of your business - you spiteful, meddling troll.

When this company starts listening to me and stops treating me like shit, then and only then will I stop posting negative comments. If you can't accept that position, then you can FUCK OFF, you pathetic waste product!

PCSTEL,

If you think everybody is out $156 a year paying for satellite radio, then it just proves how little you know about the different plans available to anyone with the sense to seek out a better deal. For instance, I have had satellite radio for just over 3 years now, and am now listening to it for free. A basic radio without a lot of frills, though perfectly adequate, can be purchased for under $40 - sometimes well under that figure. So you see, not everybody is dumb, as you mistakenly presume.

I couldn't care less about your "average American" statistics. People don't just listen to radio while commuting to work; they listen in the car when driving everywhere else, including long trips to remote areas where totally obsolete, brain damaging terrestrial radio cuts out and goes silent. I cant even count how many times that useless piece of shit AM/FM radio became a fucking karaoke static machine! I have fallen asleep at the wheel and almost killed myself because the damn thing couldn't pick up a signal - because I wandered 30 or 40 mlies from the station. I am unwilling to put up with that kind of unreliability; I don't have to with satellite. It doesn't fade out, and it is a reliable "companion" in the car that can be counted on to entertain - and in my case keep me awake. I never get drowsy in the car anymore; the music is too good, or I'm laughing my ass off, and there are no sleep inducing 22 minutes of heinous commercials to listen to. That useless piece of crap AM/FM radio was almost the death of me, literally.

Listening to FREE terrestrial radio. ZERO ENTERTAINMENT and DANGEROUS !!! Not having your radio go dead as soon as you drive into a rural area, and not being stuffed into a body bag by EMT's.... PRICELESS !!!

PCSTEL,

I didn't even mention the many hours a day that I (and many others) listen to satellite radio in the house, the office, outside, etc. It isn't only confined to the automobile, in case you hadn't heard.You should get the facts straight before you fabricate your convoluted statistics, Mr. know it all.

Steve O:

Hey, I respect you viewpoints and you are entitled to your opinions. I mean, I don't put someone on my "craplist" just because the listen to Satellite Radio.

So you have been a subscriber for 3 years and your service is FREE. Well, that goes a long way in explaining the stock price. I am sure Satellite Radio provides an excellent user experience for those "subscribers" that receive it at ZERO COST. Most people that listen to terrestrial radio have a similar viewpoint. Hey, it's FREE!!

However, I would suggest that the next time you get tired while driving. I believe you should stop your car and maybe get a hotel room and rest.

Blaming your terrestrial car radio for your inability to discern that you are either too tired to drive, or too cheap to get a hotel room is nothing more than someone looking for a scapegoat for their own poor decision making process. You are obviously a very angry person.

Perhaps your angry at other Americans who somehow haven't figured out how to get SDARS for FREE like you have. So instead of getting fantastic coast to coast radio for FREE, they would have to pay $13 a month through typical legal channels and chose not to do so.

I have listened to Terrestrial Radio all my life and have never once considered it DANGEROUS to my life.

Part of growing up is learning to take responsibility for your own decisions. Don't blame a radio for your lack of self-oversight regarding your ability to judge your impairment to drive a car. You are not only putting your own life in jeopardy. You are putting potential innocent bystanders in harms way also.

Do your loved ones a favor.. Next time.. At least pull off the road and take a nap.

And so it goes,
PCSTEL

If I remember correctly, everyone thought Apple Computer was going out of business in the late 1990s. Look at Apple Inc. today.

I predict Sirius XM will have make a huge rebound by 2010.

PCSTEL,

You don't have to put anybody on your crap list because they listen to satellite radio; your condescending remarks and your obnoxious air of superiority don't exactly hide your intolerance and repulsion for anybody who subscribes or invests in satellite radio.

I actually agree with much of what you post on this and other sites. It isn't what you say that makes you come off as a perturbing nebbish, it's the way you say it; always rude, always insulting, and always with the intent to ridicule and disrespect anybody who dissagrees with you.

Although I like to embelish my comments at times ( you take everything way too literally, Mr. Maturity), I am not an unreasonable or irrational person. You seem incapable of making any comment that doesn't reek of sarcasm and disparagement. I may obviously be an angry person - I won't deny that I am frustrated and bitter at times. Look around PCSTEL, and you just may notice that there are plenty of angry people around these days. Hopefully, someday, I will be a happy go lucky barrell of laughs like you are. I may have my faults, and I am far from perfect, but at least I'm not a sniveling wise ass who's main agenda is to discredit and belittle some fellow poster at every oportunity. By the way, I appreciate all the advice and concern you have for my safety. You are correct - I shouldn't blame a radio for my poor decision making. As a matter of fact, that AM/FM radio is so useless, and provides so little entertainment to anybody but the most ignorant bottom feeders out
there, that it ironically motivates people to pursue other music delivery options. No wonder Sirius/Xm doesn't advertise their product; they don't have to! Terrestrial sucks so bad that it's driving millions of people away, and it is actually an asset to satellite. I might turn it on, listen for a while, vomit, and then buy another subscription. I won't get another Lifetime sub though, because I'm already hurting the company and the stock price. I paid $500 for the subscription, hundreds of dollars on the radio and accessories, and have persuaded family members and friends to subscribe. I talk the product up, with no compensation whatsoever, and do it with enthusiasm. I have no ulterior motive - I just enjoy the service, and many people have thanked me for recommending it. I have a feeling this company would love to have more freeloaders like me.

Part of growing up is learning to become tolerant of other peoples ideas and opinions. Part of growing up is learning to be courteous and polite. Much of what you say makes sense to me, and many of your predictions have come to pass.... so far. This thing is not over yet, even though the situation is dire. This company is trying to survive right now, and they have made a number of very unpopular decisions. Terrestrial has made horrible decisions too, and because I am a music lover and a commercial hater, I was compelled to abandon it for something that I felt would meet my expectations. Terrestrial is woefully inadequate in meeting my radio expectations. Sirius/Xm does a much better job in my opinion, and I enjoy it. It was stupid of me to say that terrestrial listeners are on my shit list - I apologize to any of them that I offended, and I respect their desire to listen to whatever makes them happy.

Believing in this company, and investing in it, may ultimately prove to be a monumental mistake. I didn't have a crystal ball when I made certain decisions, and many people, including myself, are paying a dear price for letting emotions get involved. It was my decision, and I will accept however the outcome plays out.

It is nobodies business what I do with my money, and it is nobodies business how I invest my money. It's non of my business what anyone else does, either. I would never meddle in anybodies financial affairs. To begrudge me for listening, buying or investing in satellite radio is the height of ignorance and is an encroachment on my freedom of choice. I am the one who has to deal with the consequences of my decisions - not you PCSTEL or anyone else.

To all the sat rad lovers out there, who own and listen and invest in satellite radio - I say keep going on Orbitcast and the other sat rad sites and continue to demand that management pay attention to your wishes. To everybody else who visits the site, I say go buy a radio and a subscription. Otherwise... FUCK OFF !!!


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