Wednesday, February 21, 2007

Quoted - The Boston Globe

I have a pretty cool job. I'm a senior analyst for a technology research firm, which means I get to write all about the technologies that companies use to stay ahead and stay alive.

Sometimes, those technologies and the companies that create and use them end up making the news. When that happens, I often get asked by journalists to share my analytical thoughts on what this means and why it matters. Sometimes the call comes from a significant media outlet. Yesterday's call came from the Boston Globe, and the resulting article is in today's paper. Here's the link:
A matter of competition: Approval of Sirius-XM deal will turn on how FCC sees radio marketplace
The byline is Hiawatha Bray, and the piece is published in the business section. The story is all about the proposed deal between satellite radio providers Sirius and XM. I apparently had a lot to say. Here are some snippets:
Carmi Levy, senior research analyst at Info-Tech Research Group in London, Ontario, Canada, believes the companies must join forces to survive. Both companies have lost billions and neither has turned a profit.

"Left on their own," said Levy, "both of these companies are likely to implode."

One satellite radio firm, even a monopoly, is better than none, he added. "I have a funny feeling that even if the FCC frowned on this, it will have no choice," Levy said.


Even if the merger goes through, Levy isn't sure satellite radio has a future. He said XM and Sirius have not fared as well as cable companies in convincing people to pay for better programming .


Levy thinks that whether or not Sirius and XM merge, they'll need new sources of revenue. For instance, they could market their offerings to earthbound radio stations for broadcast on their new HD radio channels.
Your turn: Two things actually...
  • I'd like to hear your thoughts on satellite radio. Despite subscribers' rabid faith in the service, I'm not convinced the majority of the population will ever warm to the prospect of paying for radio. I believe if the business model was so strong, the two companies wouldn't have faltered so badly (losing $7 billion combined over the last 8 years) that they'd have to join forces.
  • If you live in the Boston region and have a copy of today's Globe, I'll be forever thankful if you could scan the article and e-mail it to me.
Update - Feb. 22: The article has been picked up in the International Herald Tribune, using the original sub-head as the headline: Approval of Sirius-XM deal will turn on how FCC sees radio market. Also see this blog entry about my being quoted in the New York Times.


Anonymous said...

"In-Stat: Digital Radio Set to Take Off"

"In 2006, 73 percent of respondents to an In-Stat U.S. consumer survey were aware of HD Radio on some level."

"Sirius, XM, and HD: Consumer interest reality check" (Alexaholic)

"While interest in satellite radio is diminishing, interest in HD shows no signs of a pulse."

This just confirms, the lack of interest for HD Radio, on Google Trends:

HD Radio/IBOC is dead.

Gyrobo said...

I can't wait to hear your thoughts on blueRay vs. HDDVD.

srp said...

I wouldn't pay for it.
With iPods plugged into the car radio and around the necks of 80% or so of the public it seems... why would anyone pay for radio WITH COMMERCIALS! My daughter's father gave her XM for Christmas a couple of years ago. She used it as a novelty for a few months and then it sat. He renewed the subscription and we used it on two trips.... with the grandparents so it was tuned to the 40's station, the radio serials station, or the news. We could have put a CD in the player with fewer wires and much less difficulty.

I don't think it's worth it at all.

Anonymous said...

When I bought a new car in 2003 it came with a free subscription to XM radio (3 months or so as I recall). It was kind of cool being able to tune in to a station that carried only the music I was in the mood for with no commercials, so I subscribed for a few months. But in the end I decided it wasn't worth it. I could always pop in a CD if I wanted a particular type of music. So, in my opinion, no, it's not worth paying for.

persia said...

It sure is a tough choice for the FCC. They had already refused to allow one company to hold the only two satellite radio licences, so they would be going back on that decision. And it is tough to argue for a monopoly. If both companies were about to go bankrupt, well okay then maybe.

As for satellite radio itself, I think it is a great idea for the car. It's got two big advantages over other options: commercial-free and installed.

Regular radio is horrible, with maybe a few big companies controlling the majority of stations, playing the same garbage over and over again, if you can even hear any music because it is mostly commercials, commercials, and more commercials. I don't even bother with it any more. And if HD Radio just means better quality sound (sorry, I don't know much about HD Radio), then that doesn't fix the problem at all. I won't want to listen to Noah Tepperman talking about sofas any more in HD than I do in SD.

The convenience of radio being in the car is important. Let's face it, just hitting a knob is much easier than buying (ahem) MP3s and burning CDs / copying to media cards / MP3 players and interfacing to the car system.

Maybe if there were commercial-free (or at least minimal) stations with decent non-formula music we'd be all set.

If you spend a lot of time in the car, satellite radio might be worth it. Does that give enough of a customer base for it to survive? Only time will tell.

As for out of the car, no way. Portable players have the market for people on the move. And when I'm sitting at the computer (for waaaay too many hours each day), nothing beats the control I get from my Launchcast station. It is tailored to exactly what I personally want, with the ability to pause, skip, rate songs (which determines what gets played), and it even figures out new songs that I would be likely to like based on my ratings, etc.

Frankie said...

I paid (a few years ago) for a rather expensive XM model (2go) and two months of prepaid service for my significant other. Mainly because I knew he was SO into baseball and wouldn't miss one single MLB game.

Turns out it was a rather insignificant purchase.

The radio sits in a closet, unused. Been there for about six months.

The novelty totally wore off.

Unknown said...

I won't pay for it. I'm into music and can take it all with me for next to nothing on either my mp3 player or on DVD discs with mp3's on it. Never a commercial and never any Bob Seger.

Anonymous said...

your observations are right on target...i was given a portable, stick-on-your-windshield-run-wires-over-your-dashboard-rather-unsightly-get-in-the-way-Satellite-radio-package for my birthday last yr. Initially, it was "cool", and like a previous post said, kind of fun. I even paid for extra air-time, on top of the time that came with the unit. After 8 months, tho, I have mostly gone back to listening to CD's....or to the sound of quiet.

I agree with you, that "paying for radio" is a concept that just doesn't make sense for most people. Even "rich people".

Yours was an insightful and well-written piece. Will see if I can put my hands on the NYT article for you, as I think my son gets the NYT on-line.

Carli N. Wendell said...

I don't listen to radio at all, and I don't even have a car, so satellite radio is of no interest to me. I hear it's really big in California and other places where people drive a lot. It's money I'd rather spend elsewhere (itunes, Netflix, digital cable, etc.) I can't see how they'll ever make money. And I was really annoyed last year when Howard Stern railed against his fans who didn't follow him to pay-radio. Sorry, Howard, but you're not that high on everyone's priority list.

Snaggle Tooth said...

Sorry I don't get the paper, hope you got ahold of one- Perhaps a phone call or email could get the Globe to send you a copy-

Unknown said...

I have never even heard satellite radio so I'm the last person to comment on it, but my opinion is that it's an exclusive product designed for a certain ecomonic standard, and if you don't fit within that standard (that would be me) they don't care about you at all. I think it sucks that you have to PAY for radio/tv, etc. And that because you have to pay for the services, it becomes exclusionary to those that don't have extra income. So let them implode and maybe regular free commercial radio will improve. I don't listen that that, either, except for NPR.

Oh, and our recycling bin is empty but I will ask a friend for the globe article. they NEVER throw out newspapers.