Has the satellite radio bloom faded?
July 27, 2006 by Mike Wendland
Sure looks that way after XM Satellite Radio posted its latest results.
They show losses of $231.7 million or 87 cents per share in the three months ending June 30, versus a loss of $148.8 million or 70 cents per share in the comparable period a year ago.
But much of that was expected as absorbed charges for restructuring its debt.
What is more alarming to investors is that instead of 8.5 million to 9 million customers the company had been predicting by year’s end, it now expects between 7.7 million and 8.2 million.
Whether that is because of slowing auto sales and a jumpy economy or a dwindling appeal of its services is not yet clear.
I’m shopping for a new car and XM comes free for three months. I’ll take it, of course. But after that, I’ll be hard-pressed to pay $12 a month for sat radio. Not with gas prices now well over $3 a gallon. I bet I’m far from alone.
As both an XM subscriber (two units) and a cable TV subscriber, I get much more enjoyment from my XM Radio. EVERY Major League baseball game, many college football games, and ALL of my favorite music makes it a great value. My second radio is just 6.99 a month. If cable TV (or Dish TV) is so great at $50 and up per month, why wouldn’t XM be a great value at $12 per month? With the portable receivers, you’re not locked into just listening to it in your car. You can literally take it anywhere!
Many of the satellite channels are programmed by solid radio folks who have been kicked out or frustrated by the lack of showmanship on terrestrial stations. The slow down in subscribers is probably part of the brewing economic problems. Land based media has become uncreative and over studied in my opinion. However, I doubt their demise is imminent. Usually a bunch of crazy people come along every twenty years and shake things up. This time they will be on satellite.
I owned a satellite radio for a little over two years. I loved it for the musical variety and sports programming.
Since starting a 160 mile daily commute four years ago, I had become very disenchanted with local radio. I tend a little left of center politically, and radio is either tilting far right, or has continuous gross-out chatter. Even supposedly respected stations have shrill voices like Paul W Smith ruining what is otherwise good radio.
Anyway, my Sirius radio quit working about two months ago, and I didn’t bother replacing it. Gas prices are eating me alive, and I have gotten into books on tape, CD’s and WCBN, a college radio station in Ann Arbor. I was also kind of mad at Sirius for selling out to Howard Stern.
If I go back to satellite, it will be XM for the baseball.
XM had the chance to get Howard Stern…they didn’t….Sirius wins by a mile. I see your article fails to mention Sirius, or the impact Stern has had. Fair and balanced, eh Mike?
I got Sirius because of Howard Stern. I also listen to the music channels and NFL radio. I honestly can not listen to terrestrial radio any longer. It is such a bore with the same music and numerous commercials. I love my Sirius.
Yeah, well…if they don’t rape ‘n’ rip the cosnumer a new one by putting ADVERTISING on the sat like cable did–remember cable’s pitch in the early 80s…no commercials???–maybe they’ve got a future. Personally, I pretty stopped listening to commercial CRAP radio years ago and listen to public or CDs, tapes etc. They oughta give the damned radios away with a subscrip, or sell ‘em for cost. And come on Mike…every new medium has had a slow curve upramp before it takes off. I just can’t see satellie radio not making it in the long run. I think the kicker would be if they put it in every new car FREE and got the price down to $$7.95 a month and three bucks for every additional radio. And make the thinhs pop out of the dash like an iPod so you can satelite with headphones anywhere. Yeah, I’m a consultant. Unpaid and underappreciated. In other words, I’m a lousy consumer.
I have been an XM subscriber for nearly four years. I wouldn’t give it up for the world. The quality has gone down since they crammed more channels in the line up, but I still would rather listen to that than commercial after commercial after commercial on my local FM stations. $12 for radio that I can listen to in my car or online is worth it to me.
I am a former Xm subscriber. I got my radio and service in March of this year. I listend to it for a month and then decided that after hearing the same songs by the same groups every other day it was time to cancel.
I ended up with 2 months free, the last 4 weeks every Saturday around 10am I head the same song by the same band…time to cancel altogether. Which I did. I sold my radio to a co-worker and he’s never been happier.
As for me, I just did what I originally planned, I hooked my iPod into my Blazer radio and now I’ve got 15,000 songs at MY command.
For less than the cost of a single CD every month–if you can afford that in the first place, of course–I think satellite radio is a bargain.
Though the account is in my name, I bought a Sirius receiver for my senior-citizen mother a year ago. She loves to listen to music but had become very frustrated that there was no longer any music on the Detroit airwaves that appealed to her tastes (big band, pop standards, show tunes, 24-hr.classical). I chose Sirius specifically because the Starmate had bigger keys and looked like it would be easiest for her (and me) to operate.
I pre-programmed her favorite types of music channels into the receiver, showed her how to use it, and she has been happy ever since. I set it up at first to play wirelessly through her own AM/FM boombox in one location, but she likes it so much that I just bought her two Sirius boomboxes so she can easily move just the receiver upstairs or downstairs as she pleases. This is probably the best gift I have given her in the last 20 years and I would recommend it as a great idea for others who would like to share the gift of commercial-free music choice with someone for a pretty reasonable fee; especially if you prepay.
I know I can add another receiver for myself for a nominal fee, but I do not feel a need to have it it in my car right now, and so far I am satisfied with just being able to listen to the music channels online–I don’t care about Howard Stern.
I’ve had XM for more than 2 years now and am perfectly happy to pay for it. Song variety: with dozens of music channels to choose from, several in each “type” or genre of music, I don’t have to hear the same song at the same time unless I want to. I pre-paid 2 years in advance to get a lower rate than the month-to-month price, also.
And on cross-country trips, it’s wonderful, particularly when you are travelling through rural places where terrestrial radio offers a choice of country, western, bluegrass, screaming preachers, and the farm report — or worse, only screaming preachers and the farm report.
I’m just back from a 2300-mile multi-state trip and alternated between XM and my iPod for in-car entertainment for better than 90% of the trip (exception: listening to the syndicated Bob and Tom Show on KSHE from St. Louis last Friday morning as I drove through that area). Wouldn’t trade the XM for anything: it works the same in Death Valley as it does in Southfield.
Have been XM for 3 years. Additional talk radio flavors make it different than terrestrial. Comedy Channels make long drives short. I am considering adding a Sirius to get NFL and other non common channels (Singers/Standards - beautiful music you can’t get anywhere else)
What is the fascincation with XM? Sirius put them on their current path by adding Howard Stern. Period. Sirius continues to provide 65 music channels without commercials, and another 60 channels, including NFL, NASCAR, NHL, NBA, etc., etc. I receive XM as part of my DirectTV package, and I can’t believe they’ve lasted this long.
I’ve had Sirius for 2 1/2 years now and I love it. I would not trade it for the world. $12 a month to not have to listen to commerical radio, thats a bargin. If you can’t afford $12 a month, then you have other issues. I love the NFL, Stern, ESPN and Raw Dog. Thats just good radio. Its not going away, XM might, but Sirius is not.
I have had Sirius radio for two years and its great. I recently bought a new GMC Yukon with XM free for 3 months and it does not compare to Sirius. After having both I can see why XM is slipping. My goal now is to convert my XM to Sirius in the Yukon.
I am a Sirius subscriber for 2 years now. I bought it as soon as I heard Stern was headed there. I have been nothing but thrilled with the service. I work 12 hour shifts in my car and can’t stand terrestrial radio. The commercials and same songs over and over drive me nuts. I listen mostly to Outlaw Country, Hard Attack (metal station), and of course Howard Stern. A friend of mine has XM and loves that as well. He’s a little disappointed Sirius stole NASCAR away from them but he still has MLB. Sirius is hitting and passing all their subscriber goals while XM is falling short. Sirius has much better programming while XM seems to have better equipment. I’ll go with content over pretty controls every time. I just downgraded my cable TV service as I would rather pay for the radio I listen to than channels I don’t watch.
Are you an active person? I am a very active person and get immense use out of my newly acquired portable XM satellite radio player. It has one of my best investments in years. Not only has it opened up my eyes to a world of music, but I often find myself rather listening to it then wanting to watch cable television. The last poster said he would rather pay for the radio he listens to than the channels he does not watch. I agree completely.
XM radio might of had a bad year but what company that offers non-life essential products has not had a bad year in the economy of today?
I have both XM and Sirius. I am in my car no less than 15 hours per week. I got XM about 4 years ago and Sirius last July. I listen to both of them equally. I get all the major sports, plus a lot of great shows. I have recordable radios for both providers, so I can setup to listen to anything that I might miss.
I was out of town visiting family and had to listen to terrestrial radio in their car. I wanted to pull my hair out. I counted 41 commercials in a 40 minute period. How is that entertainment?
You could not pay me to go back to terrestrial radio.
I agree with many of the posters here in regard to Sirius, particularly the one who questioned your ommission in even mentioning it. I purchased Sirius in January specifically for Howard Stern. Bought the lifetime deal and when you do the math, it is a great deal. It just kills most of you media types that Howard succeeds in whatever he does; witness the fact that since he’s gone to Sirius, the number of new subscribers has exceeded their expectations. Sirius is kicking XM’s behind and as much you hate to admit it, it’s because of Stern. I also subscribe to Howard On Demand. I’d be interested in those numbers (subscribers) to his channel. The guy’s a money maker and has legions of fans and Sirius was smart enough to recognize it. Over that five year deal, they’ll more than get back what they’re paying him.
Mike was probably sitting bashing cable when it first came out. He was probably sitting on a horse mocking those driving around in those dang-blanged motor buggies when cars came out as well. Sirius offers the majority of sports and fantastic music lineup. I am happy to pay my 12.95 a month for the service I get.
I drive a truck for a living and have had my XM subscription for two years. I wouldnt go back to terrestrial radio if they paid me. Ill probably end up switching to sirius as XM’s programming has went down the toilet. They’ve raised their rates, put commercials on many music channels, and lost NASCAR to sirius. No wonder they’re at a loss this year
This is a somewhat narrow view of Satellite radio. The reason for XM’s difficulties stem from their mis-management of the FCC regulatory compliance their products, their head bashing fight with the RIAA on their products recording the music they broadcast, their reliance on bundling their service with GM cars as the major component to their subscriber acquisition, and allowing Clear Channel (one of their major stock holders) to force advertising into their broadcast thus eliminating commercial-free music as their major advantage over terristrial radio. The majority of satellite radio news over the last year or so has been one bungling mis-step after another made by XM and the resulting disillusionment by XM’s investors and subscribers. No wonder they can’t meet their subscriber guidance.
Sirius on the other hand has always relied on their aftermarket sales to fuel their acquisition of new subscribers. Aftermarket sales are derived from people who have done their research and made a decision to go out and plop down their hard earned money on a product and subscribe to the service because they believe they are getting the best deal for their money. As opposed to having aquired a satellite radio receiver because it was included when they bought their new car. A satellite radio system for which they had no alternative choice. Sirius consistantly made, and exceeded, their subscriber number by providing a wider range of products & product features, and by providing compelling content that subscribers are willing to pay for. They made the commitment to go out and get the media content their subscribers wanted. And they delivered with Howard Stern, Marta Steward, the NFL, NBA, Nascar, Playboy, Cosmo, and every imaginable musical Genre. And they never increased the price of the subscription for the content they offered. No premium subscription required. No second rate content like Opie & Andy. No wonder Sirius is doing so well.
The satellite radio boom hasn’t faded. It’s still there and going strong. It’s just not with XM any more.
I have XM for 1 reason and 1 reason only, MLB. I moved to Atlanta a few years ago and its the only way I can listen to the Tigers. If MLB moves to Sirius then so will I.
Why use results of second place player XM when judging the state of satellite radio? Sirius has been doing MUCH better than XM and may even take over XM soon.
I love my Sirius especially since they started streaming Stern on the internet.
I have been a Sirius subscriber for the last 3 years and have never been happier. It is a decision I look back on and thank myself for doing. Every afternoon I looked forward to listening to the NFL Channel. Now that Stern is on Sirius and streaming through the internet I can’t tell you how much more pleased I am. In fact I am listening to Stern now as I type this.
To say satellite radio is losing it’s luster because XM can’t make their promised sub and profit numbers does a MAJOR disservice to Sirius.
I am on my fourth car with XM radio and I can’t imagine living without it. With the exception of WJR or WWJ for the morning commute, it is XM for the rest of the day and night…I spend over $100.00 for cable TV and Internet and spend at least as much time in my car as I do at home.
Reading through the comments, I see some common themes in satellite radio fans: sports seems to be a big draw, commercial-free is important, and Howard Stern’s immature humor is also a relevant draw to the medium.
So if none of the above is particularly important to you, or you have other ways to get your fix, satellite is unlikely to get your money.
I have relatively recently discovered podcasts, and I cannot see myself ever needing to consider satellite radio. Talk about just the content you want to hear! I subscribe to a number of podcasts on technology and other topics I am interested in (not sports in the least), and I can listen to them as I wish, and I incur no monthly charges (the broadband I would have anyway and is a business expense).
My entire music collection is at my fingertips,if that’s my mood, and I can still turn on the radio for top of the hour news. And, I am also not interrupted by interference or drop outs when I drive through a tunnel.
When I get out of the car, the iPod easily fits in the smallest pocket, rather than either being a big clunk to haul with me (sat radio) or leave in the car to attract thieves.
If I try to imagine 10 years down the road (no pun intended), I see wireless devices (using WLANs, not satellite-based) like iPods which are two-way interactive, an ability I estimate will never get ‘easy’ with satellite). I see the content all you guys are concerned with being delivered via fiber to wireless transmitters forming a sort of mesh cloud over the entire surface, similar to cellular networks now, but so cheap to implement even in rural areas, that satellite will seem kludgy and limited by comparison.
And don’t get me started on how crappy satellite can be in bad weather– something even current day land-based wireless technology is virtually immune to, imagine in the future.
So, I agree– I see a cloudy future for satellite-based content.
I have had XM for several months now and have mixed feelings about it. I love the variety of music although it is somewhat repetitive. The monthly fee hurts a bit. I am not happy with the audio quality as opposed to CDs but I have not heard a Sirius unit to compare.
I think I will keep it for a while but I am starting to tire of it.
I would never subscribe to pay radio for Howard Stern. I used to be a big fan but he is so out of touch with his listeners. He has gotten far worse the last several years since his divorce. How many of us cruise around in limos, date models, and weekend at the Hamptons? I would rather listen to a funny poor guy than a funny rich guy anyday.
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