XM vs Sirius

David Mitzman | February 18, 2006
Ok so nobody's really brought this up yet so I think it's time we all reign in. Like it or not, sattelite radio is the future of radio. "But I don't feel I should have to pay to listen to radio!!" you say typing in anger, well do you pay for cable?
Which company do you all feel is going to emerge the victor in the sattelite radio wars (even though it's not really a war at this point)? I feel XM will take it all for a few reasons, but mainly;
1) XM is technologically leaps and bounds ahead of Sirius. XM has the MyFi, a portable unit that you can listen to pre-recorded or live broadcasts on. Sirius has the S50 currenlty, a portable unit that has no live listening abilities. You have to dock the unit and then record your shows and listen later. Kind of defeats the purpose of a portable unit, doesn't it?
2) XM has not placed all their eggs in one basket like Sirius has done a la Howie Stern. XM has such an incredible variety of programming to appeal to almost all demographics (Oprah, Opie and Anthony, and countless others). Sure Sirius has it's shows but the fact they've dumped half a billion into 1 person who is well past his prime doesn't show smart business sense.
3) Subscriber base. XM has about 6 million paying subscribers now, Sirius is about half that at 3 million. XM is also broadcasting free to all directv subscribers giving them giant exposure.

Those are 3 of the main reasons I give for XM taking charge here. I know Horowitz is going to retort these, especially with the portable unit statement saying "oh people complain that the XM myfi is horrible blah blah blah" but the fact is that it's a first generation device and it's sattelite, and what's the point of having a portable unit if you can't even listen to a live show? I have an idea! I'll record the NFL game on sunday and listen to it monday and not expect to hear any results or anything. That's a really effective way to listen to the radio.

Kris Weberg | February 18, 2006
I think that the future of radio isn't much of one. I see it being replaced by the likes of podcasts and the "indiefication" of most musical genres that appeal to people above the age of 18. MTV et. al. will popularize the teenybopper stuff.

Talk radio is all that's left for radio, really, and even that's being imitated in various ways by TV.

Why deal with preprogrammed playlists and predictable shock-jock cant if you don't have to?

David Mitzman | February 18, 2006
Well I think there's always going to be a place for radio in any format (music, talk, etc) because not everyone wants to have to go, download a podcast or whatnot, sync it, and bring it with them everywhere. The satisfaction of getting in the car, turning it on and getting 250+ channels of various entertainment is well worth the convenience. You can also plug it in at home into a home dock or a boombox or take it with you with a portable unit (except for Sirius S50).

Kris Weberg | February 19, 2006
I disagree, because I think the general trend in entertainment of all sorts is towards customer control and self-programming.

TiVo, TV on DVD (instead of watching reruns), iPod and podcasting, and so on are all really changing the degree to which anyone has to rely on someone else's channels, someone else's selection mechanism in general.

No, not everyone wants that; some people find it too much of a bother, and some are just media format traditionalists. But the long-range trend is away from centralized media distribution systems reliant on ad revenue like radio and broadcast and towards something closer to direct sales of entertainment products to consumers.

Satellite radio is sort of an intermediate link in the process -- the sheer number of channels, coupled with the use of subscription fees rather than ads, is somewhere between old-school radio and something like a pay-per-song or pay-per-episode structure. In that sense, satellite radio will replace the usual kind.

I just think that within a few generations what I'm talking about will, in turn, almost fully have replaced everything else.

David Mitzman | February 19, 2006
I can't fully disagree with you because the control the end-user has over his/her entertainment experience keeps increasing (a la Tivo, iPod, etc). I think the issue is that we're not seeing full integration of that technology into the cars just yet. There are some devices you can buy that broadcast your mp3 player over radio waves but the quality isn't as good as it should be. You can get direct cable links to hook to your factory head unit but the problem is that it's very expensive (at least $100) and only high-end cars (BMW's and the like) have the option to get that feature built in at factory time. On-demand radio probably won't ever be implemented because you shoudl be driving, not browsing selections deciding what songs to listen to. I don't think sattelite radio is going to be an inbetween trend during the move towards a more consumer-controlled device. I think the variety you can get on the XM or Sirius will make sattelite a long-term player in the game.

Kris Weberg | February 19, 2006
I'm thinking that you'll increasingly see cars with mp3 player docks and so on as factory options. There're a few -- mostly luxury -- models already that do that. And hell, we already have friggin' TVs in cars. (This scares me greatly.)

But to get to your original point, I'm of a mixed opinion about whether Sirius or XM will capture the market. Sirius is banking heavily on Stern, true, but they've also signed a number of other celebrities like Martha Stewart, Eminem, and so on for exclusive content. They're setting themselves up as a purveyor of particular celebrities' output; they also have exclusive sports broadcast rights on satellite for NFL and NBA.

And XM is starting to do the same, with their big Oprah signing. That seems to be the trend with Satellite radio, and I'd predict that it'll produce no clear winner so much as an endless competition over exclusive content from "branded" celebrities. It also means that third-party providers will have a harder time jumping in, as the big two satellite radio companies will be scrambling to lock up attractive material before the other guy does.

That doesn't really play into the whole "variety of material" narrative, though; in some ways, it makes varity harder, since an exclusive-contract basis for competition means that you've only got material from the guys you've signed. What happens when the companies start bidding for exclusive satellite rights to particular record company back catalogues? (I'd imagine that no music distributor is gonna be mad enough to lock up new stuff and kill its exposure profile.)

Scott Horowitz | February 19, 2006
I've been away for the last few days, so I haven't had a chance to respond, and I know Mitz planted this just for me. This is my score card.

1) Sports
XM - exclusive with NHL, MLB, some college f
Sirius - exclusive with NFL,NBA, and NASCAR, and some college

I think Sirius is the winner here. Not trying to be biased, but NFL and NASCAR are the 2 most watched sports in the country. Granted, this is a very biased field (depending on which sport you like), personally I'm a big baseball fan, yet I have Sirius. I think the attraction of NFL and NASCAR is more powerful than even if XM had NBA also

2) Music
I think it's pretty even here. Sirius has better hard rock, XM has a 40s channel, for example. I think it is pretty much a draw.

3) Talk Radio
Sirius has Stern and Martha Stewart. XM has Opie and Anthony and Oprah. There are others ( I personally love the Maxim Channel talk shows on Sirius). I think Stern is the biggest draw to any radio. He has had the largest national audience in radio for close to 20 years. He took a 12 million listener hit to come to satellite, and Sirius subscriptions have risen from 600,000 to 3.2 Million since he announced. O&A is a more select audience, and a more juvenile version of Stern (IMHO). Oprah might be a big draw, possibly bigger than Martha Stewart, but I find satellite radio to be more of a man's domain right now (I'm not being sexist, I will defend my accusation if anyone asks)

4) Equipment
XM is the clear winner here, much better equipment. But, I think with services like this, content is the main winner. Case and Point, I think Cingular has the best cell phones out right now, Verizon possibly is the last in technology (being CDMA and having phones that came out for Cingular over a year ago). I have Verizon because in my area they are the best service. I have the cheapest Sirius receiver you can get, and I am a gadget guy. I didn't want to spend a lot of money, but I wanted Stern.

Mitz made the claim that Sirius put all their money behind Stern. In terms of cash, I don't think the deal was that insane, most of the money he received is in stock options. The amount of exposure Sirius got from signing him is insane. I see ads, but in the month of December, Stern was everywhere promoting the hell out of Sirius. You cannot buy a sportster replay anywhere. The s50 is the only unit you can really find here, and Mel Karmazan (Sirius CEO) is promising a portable unit this summer. There are many problems with portable satellite receivers, the biggest being reception, and Sirius said they did not want to release one that had the reception problems that the XM MyFi has.

That's about it, when Mitz responds I'll write more. I think this may be my longest TC post, Scott, can you find out.

select max(length(post)) from tragic_comedy
where user = 'Scott Horowitz'?

-Scott

David Mitzman | February 19, 2006
Of course Horowitz you have some points but you make it sound like Stern attributed to 2.5 of the 3 million subscribers they have now. No freakin' way. I'm sorry but that's "Stern Math" at it's worst. If you want to play that game, I could just as easily say that O&A are responsible for over 4 million XM subscribers, not counting the Directv listeners they have. Of course the Stern exposure is insane but they are putting everything behind him and it's a bad idea. The man is at the end of his career and the only supporting show he has is Bubba the Love Sponge. Ferrall (another talk show that was on a 'trial basis' with Sirius) is already gone. O&A have Ron & Fez as supporting broadcasters and they're working to bring in other talent.

I just think that XM is playing more for variety whereas Sirius is banking on one talent to carry the company. As for the sports argument, totally valid but I don't see how people could listen to Nascar at all. Doesn't seem like a sport you'd want to listen to as opposed to baseball or football.

Until Sirius closes the subscriber gap (which right now is still at 2:1 in XM's favor), I will contend that XM will stay on top of this game (and with Oprah and Ellen on their network exclusively, it'll be hard to overcome that gap).

Scott Horowitz | February 21, 2006
I'll give Stern 1.5 Million listeners. And I'll tell you why. He had a national audience of 15 million. Assume 10% moved with him (which is a safe estimate), that's 1.5 million.

I totally agree with you about NASCAR, hell I don't even see how people can watch it. It's fucking driving, it's not a sport. I am sorry to any hillbillies on the board, but come on. Ferrall actually is not gone, he's going to come back, Stern said this morning. O&A need to build a bigger national audience. They've been in radio for about 10 years.. Stern has been in NY (#1 Radio market in the country) for over 20 years. He's a draw. He pioneered "Shock Jock"ism, which without, O&A would not have a job.

Lori Lancaster | February 21, 2006
[hidden by request]

David Mitzman | February 21, 2006
Stern is not as big of a draw as you really want to believe he is. If he was, Sirius would've overtaken XM in the market already. He announced going to Sirius over a year ago and they're still behind by a 2:1 ratio. I didn't hear anything bout Ferral yet but I'm sure the news will surface soon if he's going to be on the network or not. Stern also went on a self-righteous rant this morning about O&A. It just shows they're really a threat to him that he has to go on his show and attempt to discredit them. They never discredited any legit thing Stern did, they are only pointing out obvious lies and whatnot. Now that he's ranting and raving about them shows what position he is in, which is afraid of losing his audience. If he was really a good shock-jock or whatever, he'd be doing something to counter their popularity, not just bashing them and claiming he has control over their careers (catch a replay from today's show, you'll hear him say something along those lines). Instead he's sitting around and re-recording old bits instead of coming up with new ones. If I were a paying member of the Sirius listening audience, I'd be a little pissed that he's rehashing his old stuff instead of coming up with new material.

Mike Eberhart | February 21, 2006
Plus Stern cashed out a ton of his Sirius stock. He must think that the company isn't going to make it, so he's getting his money now. Howard Stern is a joke.

David Mitzman | February 21, 2006
I agree with you 100% Mike. Stern was ripping on XM's quarterly earnings because they spent a ton on advertising, but that's what business is. That spending will be very clear on their next quarterly earnings report when it shows a growth in revenue.

John E Gunter | February 22, 2006
Yes I pay for cable, but part of that payment is for my ISP as well as the TV. I spend quite a bit more time on the computer than I do the TV so I can see for paying for the cable.

Satellite Radio? I seriously would need some kind of incentive to pay for that and I don't see an internet connection being part of that incentive. Plus, I'm usually driving when in the car, so I'm not going to be using a computer to surf the internet while I drive.

Course the quality of radio or lack there of, is probably why I'm constantly switching stations or listening to a CD.

John

Scott Horowitz | February 22, 2006
And how much do you pay for cable John? Probably over $100/month. For $26/month you can get both XM and Sirius (there are plenty of people doing this actually). If you have a decent commute, it's worth it.

John E Gunter | February 22, 2006
But I'm not interested in paying for radio. I know there are plenty of people who are doing it, otherwise, there wouldn't be a competing market place. But even with my 30 minute drive, I don't stay on one radio station/CD long enough to justify in my mind the $26/month. I just don't see it as worth the money.

As far as my per month bill of cable, if I was the only one watching, I'd be paying the $35/month for the internet connection and then another $15 or so for basic digital. My wife and son are the ones who want the movie channels. If I really wanted to see a movie, I'd be doing either Blockbuster, Hollywood Video, Netflix, etc.

John

Scott Horowitz | February 22, 2006
Fair enough, John. I was playing "sales person" I felt the same way about radio for a bit, but I'm really happy with it. There's nothing but shit on "terrestrial" radio, and this allows you to have more of a choice.

Scott Hardie | March 8, 2006
You all make good points in this debate, but it seems awfully strongly to me that the root of this is that Dave likes Opie & Anthony and Scott likes Howard Stern, and you're each rooting for your favorite show's carrier. It's like two baseball fans arguing the merits of the AL vs. NL when it's really about one man liking an AL team and the other liking an NL team. If I'm being dismissive and especially if I'm wrong, I apologize.

When I was a kid and I loved video games, there was a passionate debate (existing almost entirely in my imagination) about whether Nintendo or Sega was superior. It wasn't enough that you liked one system; you had to scorn the other one and argue with its admirers. When I got older and could afford any system I wanted, I bought them all and realized they all have merits. Is there a point to debating the pros and cons when your true motivation is simple favoritism?

Maybe I'm only being dismissive of your perfectly valid points because I personally don't care about radio (sorry Denise). I listen to it for my terribly long 4-minute commute each day, but for driving of any real length I bring CDs. Talk shows drive me crazy. I endured three minutes of the extremely obnoxious Randi Rhodes only by clenching my fists and taking deep breaths, and I agree with her politics. There's just something about many talk-radio hosts' need to be pushy, arrogant, insulting, and abrasive that I can't stand.