Satellite radio has been receiving a barrage of uppercuts to the chin on Wall Street lately, and largely for good reasons.
Mel Karmazin has explained the combination of factors which are complicating satellite’s business model. Oddly, neither XM nor Sirius has yet made the necessary steps to meet these factors, let alone counter them.
If anything is clear to me it’s this: Premium content should be supported by advertising, not subscription. Further, that premium content should be available to all and not constrained to those who venture out to the Best Buy and jump through the inconvenient hoops of purchasing and installing a satellite radio.
Don’t put the content behind a moat and some towering castle walls.
Or, at least, don’t put all of the content there. Or don’t put all forms of the content there (I’m leaving a lot between the lines for those of you who can read it).
Satellite radio is so good at doing what traditional radio does less and less of: Creating quality content (of course, I’m talking primarily about non-music content).
It is my observation that the folks in satellite radio know what they need to do and are still not doing it because they are paralyzed by relative inaction until such time as the merger is consummated.
But the trials and tribulations of the FCC are no excuse for failing to do right by your business.
Trends wait for no one. And consumers are much more concerned about themselves than about the timing of a mega-merger.
For example, why does satellite continue to struggle at retail? Why not simply (all but) abandon retail? After all, one out of every two (or so) new car buyers who have satellite radio as standard equipment subscribe to the service when their free trial expires.
One out of two!
Do you think one out of two folks who sample that cheese and crackers at the Costco table end up buying it? No, not nearly!
The signs are all around you, satellite radio.
If you have top-drawer content, distribute it to everyone everywhere.
(Paramount didn’t release Iron Man in a handful of theaters. Nor did they require you to buy new viewing screens in order to watch it).
And if consumers will primarily pay for satellite when the radio “comes for free and easy” in their new car, then that’s where your premium market is.
If I were Howard Stern, I would be pissed.
And not at the FCC.