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Will iPods kill Satellite Radio?

The…rumor is that Apple will ship in June or July a new iPhone and a new iPod Touch [which will be able to] broadcast music to any car stereo via FM. (Users simply set their car radios to the "station" that the iPhone or iPod is broadcasting on, and they can play over car speakers whatever the iPhone is playing. The feature would enable only buyers of new iPhones and new iPod touches to play audio in any car with an FM radio.  The second rumor is that both devices will get stereo Bluetooth audio streaming. That would enable anyone with a car sound system that supports Bluetooth to play iPhone and iPod Touch audio wirelessly. Although using this feature would require the right kind of car stereo, it would not require a new iPhone or iPod Touch — current devices will be able to take advantage of it.  It's likely that both of these rumors are true. If so, just about every iPhone and iPod Touch user will be able to easily play music, podcasts, streaming audio and other noise directly but wirelessly from their gadgets.

If you think this is no big deal because it's already easy to hook up your iPod to your car audio system, think again.  Making something work without wires is the kind of magical elixir of simplicity that makes the radio itself so popular.

Changes in the iPhone mean that the best "radio" experience will be via iPhone, and at no additional charge beyond what you're going to pay for the phone and data anyway.

This, the thinking goes will kill satellite radio.  Because satellite radio is radio for a price.  The argument is that satellite needs growth to survive and this will kill growth.  

I disagree.  I think most of the folks who will ever buy satellite radios have already done so.  Period.  No matter what happens in the technosphere.

Satellite radio has fans, however.  Lots.  And many if not most of these fans are fans of the NON-music content.  Indeed, it is this non-music content that provides the competitive advantage for satellite radio. Thus the real challenge of satellite radio is to monetize this content and distribute it without bothering with those pesky satellites.  The real future of satellite radio has to do with leveraging their ability to create and distribute unique content on a mass (or mass of niches) scale.

Indeed, the iPod itself will be one of those distribution vehicles.

And so might your radio station.

Will satellite radio always be a real-time stream of content pushed down from on high with no ability for you to interact with it or customize it?

I happen to know that the answer is "no."

Will you soon be able to customize your satellite radio content without buying a new radio?

I'm not saying.

The unwritten story in this Computerworld piece is isn't what iPod-style radio does to satellite but what it does to the average music-intensive terrestrial radio station which, thanks to belt-tightening and PPM, is stripping away any characteristic distinguishing it from the lowest common denominator of music boxes.

See, what's good for everyone is good for me only if I have no better choice.

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