Wednesday, August 16, 2006

Satellite Radio Runs Into Static

I have never been a true believer in satellite radio, whether it is Sirius or XM. I do not oppose it, mind you. Like any true-hearted free-market conservative I welcome the competition, particularly in the radio market. What I have objected to is the idea that satellite radio was the next ‘big thing’ and would leave everything else in the dust. So far things have failed to pan out that way. For example, Sirius Satellite Radio in their latest earnings announcement lost more in this recent quarter then they did the same quarter one year ago. But as Business Week’s February 2006 article points out, this is nothing new for the company. And while both satellite radio companies are continuing to bleed money – Sirius, for example, paying exorbitant amounts for shock-jock Howard Stern and the NFL – by driving up costs and earning very little in return for their tremendous investment, Sirius seems to be the one in more dire straits. A number of Sirius’s current subscribers signed onto a one-year trial period. Needless to say Sirius believes that many of them will not be renewing their subscription. I have always wondered what the big deal was about satellite radio. I just could not imagine paying for something that was already free to begin with (normal radio) or paying a little more to invest in an iPod which I could then use to more freely listen to the songs I wanted to listen to. And now with podcasts it is much easier to listen to talk radio programs whenever you want. I agree with Jeff Wagner that there is certainly a market niche for satellite radio and that it won’t be going away any time soon, or ever for that matter, but I am not part of that niche.