Eagle-Tribune "Help "Desk"
Sunday, February 13, 2005
By Al Gordon
Columnist
Pay a monthly fee to listen to radio? How silly is that? You wouldn't pay to get TV programs, would you? Oh, wait ...
Satellite radio is a technology that is on the cusp of going mainstream. Last year, XM Radio, the market leader, jumped to 3.2 million subscribers from 1.3 million the year before while No. 2 Sirius Radio went to 1.1 million from 260,000, according to the companies' statements. XM says it is aiming for 5.5 million subscribers by the end of this year, while Sirius's target is 2.5 million.
That is still a minimal foothold compared with the 223 million listeners claimed for broadcast radio by the National Association of Broadcasters. More to the point, XM and Sirius are losing money while broadcast is highly profitable. Not as profitable as in years past, perhaps, but still comfortably in the black.
But the rate of growth, combined with everything from new satellite radio units to the current regulatory climate, potentially may change the whole ballgame.
Literally change the ballgame, in fact. Sirius struck a deal with the NFL to broadcast pro football in the just-ended season while XM signed up Major League Baseball and will be on the air with those games this spring. The two companies also have lined up other professional and college sports. Thus, Patriots and Red Sox fans now can tune in their games anywhere in the country.
The satellite channels both offer dozens of commercial-free music channels that cater to virtually every definable genre. This is one of the areas where broadcast radio is deficient -- as major national conglomerates have taken over local stations, local flavor and diversity in content are in short supply. XM and Sirius play music that you don't readily find on the air and also throw in some unusual mixes. I am fond, for example, of XM's eclectic "Fine Tuning" channel where you might hear classical one minute and rock the next.
The biggest changes in satellite programming in the past year, though, have been in the realm of talk, where Big Names who have been squeezed out of the broadcast world now have found a home. At the highbrow level, that has meant Bob Edwards, longtime NPR morning host, now does a talk show on XM.
Highbrow, however, isn't the cornerstone of the new satellite world. The showpiece development has been the arrival of well-known radio "shock jocks" -- Opie & Anthony on XM; Howard Stern with Sirius. No strangers to controversy -- or to Federal Communications Commission complaints -- these performers have decided that their days on tightly regulated airwaves are numbered and have moved to the less regulated satellite world. This is now a big part of the satellite radio business model. The companies believe that, as a XM spokesman put it, with racier, edgier content than broadcast radio they will woo audiences the way HBO does on cable TV.
New equipment also figures into the mix. In preparing this piece, I looked at Sirius's "Sportster" a $100 unit that, with the proper adapter kit, can be played at home, in the car, or as a "boombox." The home and car adapters cost $50 the boombox is $100. This piece was designed to complement Sirius's NFL broadcasts by giving the user alerts when their favorite team's games are on.
For XM I tested the Delphi $350 "MyFi," the first Walkman/iPod-like satellite receiver to hit the market (several more will be out later this year). The lofty pricetag reflects the fact that the unit ships with car and home kits included along with a dizzying array of antennas, stands, mounts and clips. It also includes a built-in recorder so you will have tunes when you are out of satellite range.
A word on that last point: in metropolitan areas the services supplement their satellite signals with ground-based transmitters, but otherwise you must have line-of-sight contact with their satellites. So if you are in a tunnel, for instance, no signal. Sound quality of satellite radio's digital signal is better than broadcast, not as good as CD.
Although home use is on the upswing, the backbone of satellite radio is car installations. Formerly it was usually an add-on, but now it increasingly is coming as a factory option from the automakers. Here XM has had an edge because Honda and GM both own a piece of the company and have been aggressive about offering it in their vehicles. Sirius has deals with Ford, DaimlerChrysler and BMW. Toyota, Nissan and VW offer customers a choice of either service.
What's the difference between XM and Sirius? About three bucks a month. XM is $10 per month; Sirius $13. All other things being equal, the choice there is pretty obvious. Things aren't necessarily equal, though. If NFL is more important to you than MLB or if you can't live without Howard Stern, or if your car offers only Sirius, you might lean that way. My tastes, though, run to XM and to saving three bucks.
Al Gordon is a Massachusetts-based media and political consultant who also writes about technology. You can read more of his articles at www.tnpcnewsletter.com/al and e-mail him at eagle@algordon.com.
