Video: Is satellite radio the "wrong" business model?

What type of architecture are they suggesting as a lower cost means of reaching the entire country?

If they know something, I sure wish they'd tell the people who deploy EV-DO data networks.

Fact is, "radio" does not have the impact it did back in the 60s/70s/80s - "radio" has been trumpted by other technologies. Satrad will always be in the "red", until it goes bankrupt.

Shouldn't the guy at least know which company highered Stern to claim an understanding of what is going on in the industry. And shouldn't the other guy at least know the useful life of a satellite, and the accurate cost, before he says it costs too much to run the satellites. They didn't come accross like experts to me. And Warren Buffets comments about the airline industry have nothing to to with Satellite Radio.

Satellite Radio will be standard equipment on all cars some day and the economies of scale will kick in.

These arguments are flawed, do they think cable doesn't make any money? how about all of the various internet providers? what about brick and morter distributors of content like movie theaters?

Sure, content providers will continue to win a large portion of the profits, but distributors have always taken their share and will continue to do so. The business model may change - i.e. ad supported free satellite radio instead of subscription based - but the network upkeep costs for a few satellites pale in comparison with the massive infrastructure costs of regional and national cable TV networks.

I think Sirius will need to fight to remain the chosen distributor for this content, particularly as mobile internet capable devices become faster, but I think the satellite radio network can remain viable if hardware markets are opened up to competition, and Sirius capability is included in consumer devices like cell phones, car stereo's, iPods etc...thereby multiplying the number of potential subscribers (or, if ad supported satellite radio wins out, the number of listeners).

Radio has been "dying" since the 50's. Everyone spells doom for it, but the reality is that it's still a very desirable service. It's not as glamorous as TV, and never will be. But neither is indoor plumbing...

Yes, video is good to have, but for the last half-century, radio was just about to croak. That message will never stop. Yet radio will continue.

Well I have to take the stance that they said the same thing about satellite tv as well as cable tv before that.. the problem with satellite radio is the people who manage it have driven it into the ground.. they over spent their budget (if they had a budget) and now both companies have to look at their bottom line and hope the merger goes through unconditionally, otherwise this past 16 months will be looked at as what caused the death of satellite radio, plain and simple.. they could have both grown with subs easily twice the number they each had when the merger was announced.. but the merger has nearly killed a struggling industry, and now the economy will drive the final nail into it...

Obviously none of those guys subscribe. If they did they would see that the value of the service. I for one have never tuned into Howard Stern or Opra becuase thats not why I subscribe. Therefore that "content" didn't drive me to Sirius. I subscribe for the music and news stations. I would be willing to bet that none of those panelists have ever worked a job that requires major windsheild time.

Sirius is the traveling salesmans companion. I love it.

The main question is: is satellite radio a doomed business model as the speakers seem to think?

YES!

Sat radio is a suckers game, it's proven more and more true everyday

You'll never know.

Oprah you obviously are not a subscriber.

I used to think the same way until i subscribed.... I have not listened to a minute of terrestrial radio since i first plugged in my sat radio.

I took a road trip across the northern US. Sirius was amazing! truck drivers agree - they all subscribe.

there is only one technology that can cover 100% of the us. most if not all of the nay sayers have not experienced the product. they do not take into consideration the huge market there is for satrad. just because you dont want it doesnt mean no one does.

and.... if its a doomed business, why does every senator, special interest group and the NAB pay so much attention to it?

satrad is the best thing to ever happen to radio. it will have its day. sadly I think that the government and NAB wants to steal it and ruin it like they have everything else they touch, but for now, it's pretty awesome.

These people clearly do not understand the business model, they are paid to run off at the mouth and profess to be experts.
They are a perfect example of the pump and dump folks at wall street.
What a bunch of clowns.

Satellite radio rules!!!!! I would be willing to bet all these negative idiots all work for the NAB. And i'll bet they all have satellite in there vehicles. SIRIUS will dominate the auto industry. Remember it took 15 yrs to get FM IN ALL THESE VEHICLES. Be patient shareholders your in a phenominal tech. I had the opportunity to listem to FM for the first time in almost 5 yrs, i can't believe how shitty its gotten . You can't drive anywhere without losing reception. SUCKS!!!!! Shareholders don't give up on this service!!!

"highered"? Jon, you stink....

Hey blind, ignorant, fanboy trevor......

The business model does suck and they are 100% correct in saying what they are saying. Whats the sense of technology which doesn't pay for itself? Do you think Sirius and xm have not been trying for years now to make money? Where is this "huge market" and how come this "huge market" hasn't voted with their wallets? Step back trevor, yeah satradio is cool and all but breaking agreements, becoming a MONOPOLY, is all a quick cash grab by satradio management before the whole industry implodes. NO trevor these guys know what they are talking about, and Oprah the HNIC knows what I'm talking about. Mel's half brained "merge" aka MONOPOLY scheme backfired and is causing the end of satradio sooner than later. Satradio business model doesn't work, satradio can not charge enough for radio and have enough sub's at high prices, and satradio sure doesn't have enough consumers who want to be subs and pay for radio. The panel is correct, and Sirius and xm's bottom lines also prove the panel is correct.

I predict that 1/4 of Sirius programming will be free to the public and ad supported.
This will be announced within 8 months of merger.

Ryan... remember that you heard this news here first!

Trevor, Trevor, Trevor,

Do you realize what you said??

"there is only one technology that can cover 100% of the us."

You know. That is exactly what the NAB says. The SDARS companies compete against each other. Because they are in a market segment that consists of only 2 competitors that can provide complete unique high quality nationwide service. No other form of media or technology provides this service, (as you pointed out). That is why it is considered a "Merger to Monopoly"

You have just make NAB's case!

You remind me of that paid shill for SDARS from the League of Rural Voters. You remember that guy. He wrote a big letter to the FCC supporting the merger because he stated that rural america needs Satellite Radio because much of Rural America exists in a "Digital Divide" where Satellite Radio was so instrumental in helping to bridging the "Digital Divide" that dogged Rural America.

Then after it was brought to his attention that he had actually made the case why a merger should not be granted. Because SDARS lacked any real competition in Rural America He wrote a second letter a couple of weeks later "clarifying" his position and suddenly claimed that there was no Digital Divide in Rural America and that Rural Americans had a many, many choices for audio entertainment requirements, and that SDARS was only a small fraction of the communication services available to Rural Americans.

From a Digital Divide to a vibrant highly competitive market in just 2 weeks... LOL!!!

You have made a fantastic case as to why SDARS is a unique market that in reality does not compete with Terrestrial Radio..

Congratulations.

And so it goes,
PCSTEL

Trevor, Trevor, Trevor, - You make a lot of sense. Don't listen to PCSMELL, because his viewpoint is obviosly slanted. He buys into the whole NAB propaganda bullshit. What is this obcession with there having to be two satellite radio companies? Is the world going to end? Will it really affect peoples lives? Of course it won't! People are worried about a lot of things, and there being one satellite provider is something most people couldn't care less about. I think 4.20 a gallon for gas might be a little higher on the priority ladder. Wondering if the company they work for is going to go out of business might be on there minds more than the ominous threat of one satellite company. Watching the country go down the toilet while President Bush wanders around in a coma might demand more attention than the potential "merge" monopoly. By the way, if someone can prove to me that this is a monopoly, I will gladly have a three way with Bea Arthur and Tyne Daley. There is so much competition that even if the merger is approved there is no guarantee that these companies will ultimately be successful. I have never seen so many people get so bent out of shape over something so insignificant in my life! So some hillbilly in Montana gets Sirius and actually has something to be entertained by other than shoveling manure and milking Bessie at 5 AM. Doesn't bother me too much. It is great that finally there is a service that covers 100% of the US, but guess what all of you NAB fanboys -- it doesn't cover the head of a pin if you don't subscribe to it! You will always have a huge majority of people who will never give satellite radio a chance and can't wait to tune into your limited playlist, lame ass morning DJ's, and propaganda laced talk shows. There is an endless supply of stupid, unsophisticated idiots out there that love terrestrial radio. They love the nine songs that they hear over and over, and they love the crazy antics of all the Howard Stern neverwillbe's they here each day. I've maintained all along that satellite is a niche market; it appeals to people who really dig music, variety, and the luxury of not having to listen to the obnoxios comercials for ten minutes at a time, every 20 minutes! The average dope out there is perfectly happy enduring the mediocrity and monotony of traditional crap radio. This entire mess is being caused by spineless, greedy opportunist who think only about how their corrupt lives can be enhanced. The hell with what is good for the majority, I'm gonna get mine, baby! The alternative to satellite radio is so horrible that I pray to God our government fails in this attempt to destroy these two companies. If a little common sense would prevail, this merger would be approved in a heartbeat. Eight years of no sense under Bush makes my suggestion nothing more than a pipe dream.

First Warrior states:

"There is so much competition that even if the merger is approved there is no guarantee that these companies will ultimately be successful."

Then he turns around and opines...

"The alternative to satellite radio is so horrible that I pray to God our government fails in this attempt to destroy these two companies."

First there is sooooo much competition, then all of a sudden the alternatives are so horrible.

This guy is quite a "flip-flopper".

"By the way, if someone can prove to me that this is a monopoly, I will gladly have a three way with Bea Arthur and Tyne Daley. "

Depends on how broad you want to base the "market definition"

Is the market the Entire Audio Entertainment Market?

Or is it those companies that can uniquely provide complete CONUS coverage while providing unattended diverse and unique audio programming in high quality digital audio services?

If it is the first, there is no monopoly.

If it is the second, there is most surely a monopoly.

It really comes down to "special interest groups" like SDARS stockholders and investors that are willing to sell their "personal integrity" for a shot to make a couple of bucks off of a successful merger.

Sorry to hear that your "personal integrity" is for sale for such a small price.

And so it goes,
PCSTEL

NO! to "merge" MONOPOLY Sat radio has been working with this flawed business model for years NO! government bailout, NO! quick payday for management and investors before the entire sat radio industry implodes from greed, arrogance, and fanboy ignorance.

NO! to "merge" MONOPOLY

PCSTEL,PCSTEL,PCSTEL, - I don't see where I "filp-flopped"anything, although a staunch fan of the NAB and terrestrial radio like youself would have a hard time not putting your biased spin on what I said. I said that the "alternative" was horrible; I didn't use the plural "alternatives". Thank you for putting words in my mouth. Maybe I should have been more specific; terrestrial radio was what I was referring to as horrible. It is, to my ears, fraught with no selection, radio personalities with no personality, and mindless never ending commercials. The plethora of alternatives I have nothing against, just like I have nothing against satellite radio. The I-Pod has a strangle hold on the mp3 market and has had a much bigger impact on peoples lives,careers,and the future way people will listen to music than satellite radio ever will. Polititicians can't use the I-pod to promote their self serving, corrupt political and personal agendas the way they can with terrestrial radio; hence there is no controversy. Granted, satellite radio IS a unique provider who's coverage is accessable to eveybody, but nobody is forced to listen to it against their will. If you don't pay, it won't play. Anybody with a brain in their head, which would exclude you and all the shills of the NAB, knows damn well that all of the technologies availabe are competing against each other. If I couldn't get music, news, talk and weather from anyplace other thay satellite radio, I would be up in arms. Some monopoly, this satellite radio! Within seconds I can turn on something else, terrestrial radio notwithstanding, and be happier than a pig in shit. Satellite radio does not, in reality, have exclusive control over me like you imagine they do. There are thousands of companies that provide unique services and distinct experiences to people, but they aren't viewed as the apocalypse as is satellite radio. I can stay at the Plaza Hotel in New York, or I can stay at Red Roof Inn. Should the Plaza not be allowed to conduct business because they are unique and appeal to a different clientel? Some people are already predicting the demise of satellite because of present and future music and media distribution technologies. Satellite has approximately 17 million listeners. Terrestrial radio has over 300 million listeners. How do you sleep at night knowing that 4 % of the entire radio universe has satellite radio? You must have to take sedatives. Even if this merger were to pass, do you really think the numbers will change that much? Too many people think radio is radio, and are not discriminating enough to ever listen to satellite radio. The rest simply will not pay for it. It is a niche product, but just because the MAJORITY of people will never have it doesn't mean that a select group that love it should be denied. So you think that satellite radio stockholders and investers are the special interest groups - with no integrity- in this entire mess? Compared to the NAB, the FCC, and the filthy politicians they have paid off to illegally alter due justice to prevail, the satellite stockholders look like squeaky clean pillars of the community!

"I said that the "alternative" was horrible; I didn't use the plural "alternatives".

Well, the pro merger camp claims that there are literally dozens of "alternatives" to SDARs service. So when you claim the "alternative" is horrible? Then how am I to know "which alternative" you are talking about? You seemed to indicate that there was only one alternative, because you noted so in your statement. Now suddenly you want to rewrite that concept when you realize that it sent the wrong message. Kind of like that guy at the League of Rural Voters.

Every thing that the "pro merger" pundits want is available without a merger. If the companies had kept the promises that the agreed to be bound by over a decade ago. You would have a single receiver that is capable of receiving both services. The two companies acted in collusion to prevent the consumer safeguards that the FCC put into place over a decade ago. The fact the the two companies are willing to accept concessions is a direct sign that they believe that the merger is a merger to monopoly. I mean.. Why would they have to offer any concessions if it were not the case?

If the companies refuse to provide those offering absent of a merger, due to lack of validity of the business case, then why would they have to offer them as a sacrifice to begin with?

Providing a company that violates pervious rules with a reward, simply provides the expectation of future rewards for future rules violations.

You Hotel argument has nothing to do with the subject.

There are very few barriers to entry in the hotel market. All you need is a piece of property.

In the case of SDARS. There are only 2 pieces of property (spectrum) available and both are owned by the US Govt, and leased to the respective SDAR companies.

It is the FCC's job to ensure that these two spectrum leases are used to provide competitive services for the benefit of the citizens of the United States.

You can claim that there are other "substitutes" for SDARS, but there are no other "Direct Substitutes". You claim some of the other "substitutes" are horrible, while others provide a "substitute" in one form or another. But, there are only two services that are "direct substitutes" for the coverage, quality, and diversity of the programming options provided. And those two "direct substitutes", now request to merge into a "Single entity".

Imagine if the cell phone companies were allowed to merge into one back when they only consisted of 4% of the total communications market.

Just because I haven't consumed the Kool-Aid or I don't have a financial interest (special interest) in the outcome of the merger doesn't make me a shill for the NAB. Yes, I believe that anyone that has a "financial interest" in these companies are a "special interest group". Do you have a vested "financial interest" in the outcome of this merger????

Because I DON'T!

And so it goes,
PCSTEL