Tuesday, August 08, 2006

Why Satellite Radio Will Fail

On October 4, 1957 the Soviet Union launched Sputnik into orbit and the Space Race was on. Fueled by Cold War hysteria, claiming the high ground in space became the top American priority over the next twenty years. The Cold War may be over but a new battle for space is on. Last January Sirius Satellite Radio upped the stakes in an on-going battle by launching Howard Stern into orbit to take on rival XM Radio.

See, space is supposed to do for radio what cable did for television. But now, six years into the voyage, satellite radio seems to be losing its escape velocity. Both XM and Sirius stock have been falling like stage-three booster rockets. In other words, Houston, we have a problem--satellite radio represents an antiquated way of doing business. Comparing itself with cable television in the early 80s doesn’t help.

Times have changed over the last 25 years. Today, if you want to listen to music, you download it off iTunes and put it on your iPod. You play the iPod on your radio on your way to work, and you take your iPod into your office when you get there. You can listen to any song you’ve downloaded any time you want. Sure, you have to pay for them but you get what you want when you want which is exactly the point.

And, if you don’t like paying, there are plenty of free ways to get what you want when you want. Yahoo Radio lets you create your own station, ranking songs, artists and albums. It will even attempt to sprinkle in some new artists based on your previous picks.

Music is just the tip of the media iceberg. Almost any type of content is available for download to watch or listen to. From audio books to off-the-cuff podcasts. There’s no reason why you shouldn’t be able to take your pick and enjoy what you want. On satellite or terrestrial radio you have to listen to what someone else thinks you’ll like, and that misses the point.

Who watches the nightly news anymore? Polls show more and more people are getting their news on-line. What started with 24 hour news shows like CNN has crossed onto the internet. Today you can go to places like digg.com or del.ico.us and find your own news, or read what others have voted as worthy. You can participate in the process and post news you’ve found, and vote on stories you’ve enjoyed. You’re the editor of your own news channel. You can set up Google News to alert you when ever a news story appears that matches your interests. You can then download the news you want onto your portable media player and listen to it when ever you want.

The internet makes all kinds of media possible on a very narrow and specific scale. Odds are there’s a podcast, blog, band, and movie for every desire. And if you can’t find what you’re looking for you can always contribute to the community yourself.

This movement of customer-dictated service will continue into the future. In the early 80s the term was “broadcasting” which cast a wide, thin net in order to catch as many people’s attention as possible. You were at the mercy of entertainment moguls to tell you what you wanted to see and hear. Today, the term is “narrowcasting” which is targeted at a very small amount of people. Have a thing for animals and vegetarianism? Then check out vegansamaritan.com. Want the latest tech updates? Visit boingboing.com. Do you like off the wall video clips? YTMND.com is just for you.

It’s a consumer-rich approach, which wins approval simply through the democratic process. 25 years ago you had to get corporate approval to release your creation to a wide audience. In-turn people had to watch what a few people determined was interesting. There was a bottle neck right between the creative forces and you. But today, you can go on myspace.com where indie bands like Boxkar are available to millions of people. You can post your video clips on youtube.com and create your own channel. And all of it can be downloaded onto portable media devices and engaged any time you want.

Cable TV too will die out. Someday you’ll just log into your personalized station and tell it what you want to watch by name or genre. No more skipping through 200 channels when all you really need is one. The people who catch on to this shift the fastest will be the winners.

Satellite radio uses technology from the 50s and a business model from the 80s. Why should you pay Sirius owner Mel Karmazin to guess what you want to hear when there are services that allow you to be explicit about it? It’s just not “long-tail” enough or “2.0” enough. That is to say it’s not specific, or communal enough. Plus, to get on-board with Satellite you pay $12.95 a month then you have to buy the equipment to run it. That’s so 1984, man. Don't look now, Big Brother is quickly dying out.

Satellite radio does have channels which might make it worth buying. Where else can you get an array of real-time sports broadcasts? XM has 23 channels just for the sportsophile in you. So, if you need sports, where real-time is most of the fun, Satellite might be for you. Otherwise, I think you can get your music, news, and talk elsewhere.

Democracy's love child is Capitalism, where people can vote with their dollars based on what they need. But now it is truly democratic where anything you can think of can be found or created for someone else to find. The leverage of creation and choice is being taken out of the boardrooms and into the hands of more and more people. Ultimately I don’t see how an idea like satellite radio fits in with this. Maybe in the future it will allow you to create your own station, catered to your specific needs, but until then it seems like glorified cable, and we’ve been there and done that.

digg story


Love said...

Very insightful and informative and excellent article.

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