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Music Media

Satellite Radio in Fiscal Trouble 326

Posted by michael
from the stairway-to-heaven dept.
prostoalex writes "It looks like Sirius Satellite Radio is going through its worse times. From the same article XM Satellite does not seem to be doing well either, even with 200K customers. Will it signify the end of the satellite radio?"
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Satellite Radio in Fiscal Trouble

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  • Yeah (Score:3, Funny)

    by GigsVT (208848) on Wednesday October 23, 2002 @07:20AM (#4511622) Journal
    Under the new plan, which is subject to regulatory and shareholder approval, current holders of Sirius common stock will together hold 8 percent of the new common stock.

    Uh, yeah, I know I'd vote for that. :)
    • by ergo98 (9391)
      When the alternative is that creditors seize the assets and the stock basically is worth nothing, most shareholders will go along with that.
    • Re:Yeah (Score:5, Informative)

      by ackthpt (218170) on Wednesday October 23, 2002 @07:32AM (#4511677) Homepage Journal
      Under the new plan, which is subject to regulatory and shareholder approval, current holders of Sirius common stock will together hold 8 percent of the new common stock.

      Uh, yeah, I know I'd vote for that. :)

      Well, Sirius has backing to get them through next year if this happens, whereas a vote against it means they exit in early 2003, which I've never understood. I've seen debtholders refuse to sell or accept a lower price, only to see what they had become utterly worthless because the sum of the assets was worth less than the whole.

      Personally, I'd like Sirius to keep going, since I signed up this summer and it's great, I scarcely listen to the local radio stations anymore, since commercial free really does spoil you (with the exception of Sirius' own occasional plugs for what's going on other channels)

      With luck, enough new cars will sell to help boost the numbers. I think XM indicated they need 2 million to break even and Sirius about 4 million, but don't quote me on that. It's a lean market and people are pinching pennies.

      The real barrier to satellite radio isn't your subscription, it's the cost of the special receiver and antenna, which can be about $300 combined, though I know there's a $75 rebate out there for something from Sirius and/or Kenwood.

      • Re:Yeah (Score:3, Interesting)

        by Shadow99_1 (86250)
        Well Delphi's New SkyFi (sorry don't know a direct link)goes a long way to reducing costs... The receiver is only $169.99 (retail) with the car mount... meaning with a basic antenna it's about $200 to get started with XM radio...

        I have a existing XM receiver/antenna/car mount & it pales in comparison to the Delphi SkyFi... Oh & you can get a home audio mount that lets you take the receiver in to your house to use with your home stereo system....
      • Actually, new car sales aren't helping, as everyone I know has opted not to get satellite radio. Yep, I know it's cool and all, it just comes down to "how many things do you need on a subscription plan".

        Personally, radio in my car was just one too many. Apparently I'm not the only one who feels that way.

        Actually, I usually customize the hell out of my stereo and don't buy anything from the dealer. So, I easily spend $1000 on a car stereo, but just don't want the subscription.

        Just my 2 cents (which I'll keep, thank you very much).

      • Re:Yeah (Score:3, Interesting)

        by Technician (215283)
        The other problems are most people listen to the radio while on the road for traffic info. Many good radios have ARI (automatic road information) so if the station you are listening to doesn't have the latest road information, the ARI will kick in and give it to you. I have not seen any of the SAT radio supporting this. It may have it and I haven't noticed it bacause I am not shopping for it. The feature if it has it is not mentioned in any of the advertisements for the service. I did ask a dealer if one subscription could cover a second receiver the same way cable TV works. The answer was no, but you can get this neat easly transportable (by thieves) unit to take between the house and car. No thanks. I would want the car unit firmly bolted in. No I do not want two subscriptions.
        If I was stuck with one subscription, I would put the reciever in the house and use it as a replacement for Napster. Then use the CD's (cutting out songs I don't like) in my in dash MP3 player with ARI. But due to the cost and the down economy, I have opted out. I can get music off a cable system without buying yet another box with a subscription.
  • by jrwillis (306262) on Wednesday October 23, 2002 @07:22AM (#4511634) Homepage
    Will it signify the end of the satellite radio?
    As someone whose has XM I really hope that they pull through. It's one of the best services I've seen in a long time and just about the only way to get some good blues and jazz in your car outside of cd's. I'd pay twice as much for the service just to keep it alive.
    • by OrangeSpyderMan (589635) on Wednesday October 23, 2002 @07:23AM (#4511638)
      I'd pay twice as much for the service just to keep it alive.

      Not wanting to speak on their behalf, but I'm fairly sure that if you offer they'll accept :-)
      • by swordboy (472941) on Wednesday October 23, 2002 @08:23AM (#4511961) Journal
        I'd pay twice as much for the service just to keep it alive.

        Don't worry about satellite radio as the providers have some large pockets to draw upon - the auto makers. Next year, GM will offer the service as standard equipment on some of the vehicles - with a free year of service. If only a small percentage renew, then the satellite providers will be listening to satellite disco. If a significant percentage renew, then you are looking at a threat to FM.

        On that note, with all these satellite head units running around in the new autos, it would make financial sense to provide some publically funded stations free-of-charge. That would be the largest opportunity.

        $0.02
        • Don't worry about satellite radio as the providers have some large pockets to draw upon - the auto makers.

          Um....well, the auto makers may have big pockets, but they have a deal to put receivers in their cars, one assumes they got the year's programming for free, and the receivers at a cheaper rate...not a deal to give XM and all money.

          Next year, GM will offer the service as standard equipment on some of the vehicles - with a free year of service. If only a small percentage renew, then the satellite providers will be listening to satellite disco. If a significant percentage renew, then you are looking at a threat to FM.

          Yes, but there is no money in the short term, or even the medium term. Let's see, starting sometime next year XM gives free service so lots of people with new GM cars. That doesn't cost XM very much money (they might have product support costs, but they should be low, right?). For a year after that they have no extra money from those people. Then, after over a year they can start getting an idea about how many people keep the subscription.

          Think about that.

          We are still over a year from them getting money from the GM deal, and more importantly over a year from finding out how much money they will get from the GM deal. Do they have money to make it that long without going into bankruptcy?

          On that note, with all these satellite head units running around in the new autos, it would make financial sense to provide some publically funded stations free-of-charge. That would be the largest opportunity.

          How does that makes sense (to XM, not the listening public!)? It wouldn't make money for XM, and it would make the XM subscription slightly less valuable in as much as people that like the publicly funded stations would then have something they could listen to "whenever" without paying XM for anything!

    • I'd pay twice as much for the service just to keep it alive.

      Ssshhh! ;-) But, yeah I agree with you. I have Sirius and 100 channels was a bit overwhelming at first, but now I've grown into it and it's the best thing that ever happened to radio. I really do hope it survives.

      In 4 weeks I'll be in the middle of the Mohave Desert, listening to jazz, swing, the BBC, etc. where I got bugger all last year.

    • Don't worry, this article is forgetting an important point, OEM contracts.

      Currently XM and Sirius are almost exclusively available as high-end aftermarket add-ons. Obviously this isn't conducive to helping the satellite radio companies reach their break-even points (if memory serves me correctly from other articles I've read, the break even point is either 500,000 or 1,000,000 customers).

      Sirius is partnered with Ford (Ford, Lincoln, Mercury, Land Rover, Jaguar, Aston Martin, Mazda, Volvo), Audi, BMW, DaimlerChrylser (Mercedes, Chrysler, Dodge, Plymouth, Jeep), and Nissan (Infiniti and Nissan). XM also has an impressive partnership list, including GM and more.

      Once these OEMs start selling cars with satellite equipped radios from the showroom, sales are going to skyrocket.

  • too damn expensive (Score:3, Insightful)

    by wayward_son (146338) on Wednesday October 23, 2002 @07:22AM (#4511635)
    Sure satellite radio seems nice, but everything's too expensive to be worth the trouble. $299+ for the receiver, then another $10/mo for the service. Not a good business model when your competiton is free.
    • by Kierthos (225954)
      Exactly. Or if you already have a nice music collection on tape/CD/mp3 player for your car. Music without commercials? I can do that already. Music all along a typical "theme" like Rap or Hard Rock? I can do that too. And I can guarentee that I will like all the songs I play, as opposed to shelling out for this system and still having to flip channels to find something I like.

      Kierthos
      • by GLX (514482) on Wednesday October 23, 2002 @07:27AM (#4511653) Homepage
        But you're forgetting about the exposure to new music factor... Sure, we can all program what we like to listen to in the car - burn some CD's and we're set...

        But, if we stop listening to FM radio because everything on there is commercial-laden crap, then the terrorists have already won! er, then we're not as exposed to new and upcoming music (XM has a *lot* of indie stuff, as well as stuff that'll never get signed) - I've never heard so much Wilco in one place.
        • by mjh (57755) <mark@ho r n clan.com> on Wednesday October 23, 2002 @07:49AM (#4511747) Homepage Journal
          XM has a *lot* of indie stuff, as well as stuff that'll never get signed

          That may be the case, but it's probably not a good enough biz model to sustain them. What they ought to think about doing is providing a large commercial-laden offering for free, and a "premium" offering for money. That way the business is sustained by a large enough revenue stream (advertising) and those who want the indie stuff can still get it, but it costs them more. 200k customers may seem like a lot, but think about the amount of money they must be paying to run the service.

          • I see two things wrong with that thought, one, you have commercial-laden airwaves, it's indistinguishable from FM radio as it is, and secondly, unless you get it in a new car with the receiver already installed, it's not free, it's 300 bucks for the receiver.

            I have a friend of mine who has it, he seems to like it, but I'm very content with burning CD's off of music that my friends play, if I like it, I rip it.
            • by mjh (57755)
              Indistinguishable? How about being able to listen to the same station while you drive across the country. Heck across the state... unless, of course, you live in Rhode Island, and you can already do that. For the rest of us, especially those of us who love sports, that is a *VERY* nice feature. I can't tell you how frustrating it is to be in between big cities and not be able to pick up the football game. I want satelite radio for that feature alone... and I'm willing to pay for it by listening to advertisements. I'm not willing to pay cash for it on a monthly basis.
            • by mjh (57755)
              Oops... you said *TWO* things.

              As far as the $300 for the receiver, if the satelite providers really had a good understanding of what their target customers *could* be, then they'd do it differently. What they need to recognize is that they can now make nationwide radio stations. Which means that they can market to advertisers nationwide radio coverage. Radio can't say that right now. TV can, and look at how much advertisers are willing to pay for it.

              If that's the case, subsidize the radios. Make them for whatever they cost, and sell them for $50. If you sell them cheap enough, everyone will get them. If everyone gets them, then they can market to their real customers: advertisers.

              But that's just my $.02. I think the satellite providers are really screwing up their oppurtunity. If only I had a half billion (or so) so that I could start up MJH Sat Radio...
              • by CheechBG (247105)
                yeah, yeah. Grab your lawyer and sue me if you like. ;-)

                I understand the concept of a "nationwide radio station." That, in and of itself, would be nice. However, I *STILL* wouldn't pay even $50 with your subsidized receiver to listen to 10 minutes of commercials in a 30 minute bloc of music, if the advertisers catch on like they do in prime-time TV.

                200 bucks can get me a internal CD burner (good for other things), a 50 pack of blank CD's, and a internal MP3 car deck. I ow have a few days worth of uninterruptible music, and 49 more CD's to add stuff to, with no additional costs incurred monthly.
        • by Kierthos (225954)
          New and upcoming music... what is this that you speak of?

          I'm serious. Out of the stations I can receive, I have:

          1) Classic rock. Pretty good, but the most recent stuff they play is early-mid 80s.

          2) Pop music. Needless to say, I do not care to hear the latest Britney/Christina/N'SYNC/whatever songs.

          3) Rap/R&B station. I can listen to this for about 15 minutes usually before hearing yet another artist teaming up with Ja Rule. *click*

          4) Classical music. I wouldn't mind this, but at the times I listen to it, they seem to be on a Chopin or Berlioz piece, and again, I can't stand them. (What can I say, I prefer Wagner.)

          That's pretty much it. I have friends who will loan me CDs or mix tapes of new stuff, and I will listen to those if I am in the mood for something new.

          Kierthos
          • by GLX (514482)
            I'm sorry, I may have mis-phrased what I said above. I meant that that's what we get from XM - exposure to new stuff - and that FM is commercial laden crap (Britney, NSync) that gives us nothing new or interesting..

            My bad.

    • by ackthpt (218170) on Wednesday October 23, 2002 @07:39AM (#4511696) Homepage Journal
      Not a good business model when your competiton is free.

      Free? Maybe public broadcasting or community radio, but commercial radio? Nothing like hearing your music interupted by ads for zit creme, Bud, soda, etc. Maybe you've gotten accustomed to it, but man, lemme tell ya, it ain't free!

      Now imagine what a piss-poor business model selling people TV over a wire and STILL including commercials and THEN charging for premium channels.

    • by tswinzig (210999)
      Sure satellite radio seems nice, but everything's too expensive to be worth the trouble. $299+ for the receiver, then another $10/mo for the service. Not a good business model when your competiton is free.

      It's a good business model when you have things your "competitor" doesn't... like ad-free stations, digital quality, hundreds of stations to choose from, many things you can't normally get in most areas, and the ability to drive for long distances without losing the same station. If I drove more than I do, I'd get XM in an instant.
    • Especially when, after reading XM's list of stations and realizing that they have maybe one station that I would listen to, but only if I was in the mood for it.

      As it is now, I only listen to Quinn [warroom.com] when I'm driving to work. Other than that, my car came with a six disk changer in the dash.

    • by McFly69 (603543)
      I totally agree with you. If the upfront costs were just $399 and no monthly fees then I would serious consider it. With monthly fees, lets say $10, there receiver should be leased or given to you for free (under 2 year contract or something). the onyl way I would pay $399 for the receiver and a $10 service fee is it was portable (like an over sized cd player). This would give me the ability to hook it up to my home receiver and carry it around as a diskman. Perhaps even throw ina compact flash card port in there to save your favorite song when playing.

      Just my personal thoughts. Any comments?
      • by mlong (160620)
        I agree...the upfront cost is a major turnoff, even with their rebates.

        My biggest gripe is that they (presumbably) knew about each other and yet didn't try to make a standard. So for example, my Kenwood head unit is Sirrius ready but if I wanted XM my head unit would not work with it (I'd have to have a seperate display, buttons, etc.). I have yet to see any car radios that support both Sirrius and XM and for me, I'd like to have a choice.

        Another gripe is the antennas. Right now (at least for Sirrius) there is mainly just one antenna made by several companies. I'd prefer a little choice here too...like stealth antennas, antennas you could put on the inside of the rear window, etc. I know visibility, etc. is a concern but I think they could solve any issues there.

        And speaking of visibility, I wonder how these radios perform in a thunder storm?

    • Yes but they are already showing signs that they will follow the tracks already laid by Directv. For satellite radio there will come a time when you can shop out your choice of free or very inexpensive systems or pay premium for better high-end stuff... just like DTV. Not to mention the auto manufacturers picking them up with OEM availability.

      IMO Sirius got their legs blown off by their late launch. I wouldn't be surprised to see them in bankruptcy inside of 6 months. XM already has the early adopters and continues to gain market share.

      My prediction is that when Sirius goes bust that one of the major media players (Clear Channel, AOHell-Time-Warner, etc) will swoop in and buy for pennies on the $. Of course shit-canning the existing stock swapping shenanigan and busting the original investors.

      Haven't I read this story before???

      Oh yeah... I have XM and love it. Very robust choice of audio entertainment without the hassle of manuevering CDs or MP3s.
    • Not a good business model when your competiton is free.

      I dunno... It seems to work for Microsoft.

  • by viking099 (70446) on Wednesday October 23, 2002 @07:22AM (#4511636)
    Maybe people are feeling the squeeze on their wallets from all the market problems we've been having, and are unwilling to commit to something that seems to be almost 100% luxury.
    I know that if I were concerned about my retirement fund, I'd be cutting back where I could to put more money there.
    When this thing came out, many people didn't say "can't" or "shouldn't" when it came to luxury purchases. Now, though, people are keeping their wallets in their pockets a bit more.
    • I think people have always had a problem with periodic and continuous billings, and it took many years for people to get accustomed to it for services like electricity (well, I suppose a better saying was in the years since that was the norm, people have started to think that everything is free). i.e. If the satellite maker sold only $500 receivers, but had no monthly fees, I'd bet they'd have far more customers. People hate being hen pecked, even when in the long run it saves them money or saves them from long term investing in troubled companies.
  • Wait.... (Score:5, Insightful)

    by Kierthos (225954) on Wednesday October 23, 2002 @07:23AM (#4511637) Homepage
    You mean satellite radio ever began? I mean, sure, I've seen commercials for it, but I know of no-one who has it, and I know so many tech-geeks who go out and buy the latest and greatest just because it's new (well, okay, not so often in this economy), and yet none of them have it.

    I can think of a lot of reasons why it wouldn't be doing so well though... how much does it cost to put a satellite into orbit or "rent" one of the ones already up there? And how much are they charging customers per month for the service?

    200,000 customers? In a major metropolitan area, like New York City, one radio station can have that many listeners. It sounds like a lot, but it isn't.

    Kierthos
    • Re:Wait.... (Score:3, Insightful)

      by GLX (514482)
      True, but 200,000 customers = $2,000,000 a month in revenue + the additional ad revenue from the channels that have advertisements (and the ability to target your advertising to a niche market is worth a lot more on print/radio/tv advertisements) - I would be suprised if a channel like Z-100 in NYC makes much more than that a month.
      • Re:Wait.... (Score:5, Insightful)

        by phil reed (626) on Wednesday October 23, 2002 @07:34AM (#4511683) Homepage
        The problem with the satellite radio model is the huge up-front costs -- nearly a billion dollars to get the satellites up, ground stations established, and then repeaters in major metropolitian areas to help out when you don't have a good view of the sky. So, these two companies get this far, then this recession hits and people try not to spend too much. It's no wonder they are hurting.
        • Re:Wait.... (Score:3, Informative)

          by jjo (62046)
          The huge up-front expenses are not really the problem for XM and Sirius, since they are now sunk costs. As Sirius stockholders are now finding out to their chagrin, such sunk costs can we wiped away with the stroke of a pen. These costs would be a big deal for anyone who wanted to build yet another new satellite radio network, but I don't think that's going to be a problem any time soon.

          To just stay in business (as opposed to saving the shareholders' investments), all the satellite radio companies have to do is cover their operating expenses, although that seems difficult enough so far.
        • Reminds me of the days when our companies were ordering $700 chairs for us to sit in and other ".com era" items.

          That didn't work out either.

      • Re:Wait.... (Score:2, Insightful)

        by Kierthos (225954)
        Okay, I won't knock the $2 mil a month in revenue, but it's not net profit. They still have to pay their staff out of it (and yes, I know, so does the radio station), and meet any other expenses. And while radio stations have a decent number of expenses (but I'll bet you'd be surprised how much free shit they get), they aren't having to pay to keep a satellite up.

        Something goes wrong with Z-100's main antenna, they can at least get a technician or twelve physically to the location and start figuring out what went wrong. Something goes wrong with a satellite, and you have to schedule with NASA to get that fixed.

        On the plus side, they aren't bound to a specific geographic location. Outside of stations changing their formats and a lot of people finding new radio stations because of that, I daresay a lot (most?) radio stations have fairly stable listener bases. If XM Satellite can stay a going concern long enough, they can continue, even with a slow-growing customer base. But I'd say they need some more customers, fast so they can even have the option of slow growth.

        Kierthos
  • Costs vs Benefits (Score:5, Insightful)

    by jarrettwold2002 (601633) on Wednesday October 23, 2002 @07:27AM (#4511649)
    I won't be getting satellite radio anytime soon. Balance what you get vs what you already have. You can purchase car mp3 kits that give you the music, you want, instantly. No service interruption from tunnels and hills, no advertisements. You edit what you want and the order you want it in.
    My music interests go from Deicide to the Donnie Darko cover of Tears for Fears Mad World. You can't put that range of music in a single station, let alone pacify the n'sync listening masses.
    With an iPod you can take you're entire music collection anywhere. Literally. Think about that for a moment. A decade ago you had fourty five minutes to a side. It's mind blowing.
    Much technology lately seems to be a sketch pad, and some of the ideas that should have been crumpled up end up making it onto the drawing board. Others are conversely getting thrown away courtesy of legal battles and patent suits.
    The latest and greatest isn't worth buying if I already have something better. Until the industry come out of the innovation rut it's been stuck in, I won't be purchasing anything new. It's sad when the majority of slick new stuff comes from three companies. Tivo, Sonic Blue and Apple.
    • by Anonymous Coward
      But how do you find out about new music? I like my music collection, but I don't fool mysef into thinking that I've already discovered everything that's good. To everyone who's saying local digital broadcasts will take this market - Clear Channel already owns all the radio towers in my area. I don't think digital clarity will make their content sound any more original.

      Having said that, I'm holding off on sat radio until the receivers aren't proprietary.
  • by standards (461431) on Wednesday October 23, 2002 @07:32AM (#4511675)
    1. I mostly listen to the radio when I'm in my car. Since I live in a big city, I'm rarely in my car.

    2. And when I am in my car, I listen to traffic, weather, or my own music collection or local radio.

    3. The exception is long distance trips. Perhaps one multi-hour drive a month.

    4. At home, I have a big music collection. Stuff I actually bought over the years. (Don't blame MP3s in my case). I also have digital TV, with it's music channels. Plus a collection of reasonable local radio stations (and many more unreasonable ones)

    So! Someone has to remind me why I should spend $$$ for this service. I can see why some people would spring for it. Just not me.

    Damn, it's snowing... there goes summer...
    • by techno-at-nni.com (236771) on Wednesday October 23, 2002 @08:30AM (#4512003)
      1. I live in country, no large GOOD radio stations.. And since I'm in the country I'm always in my car

      2) I have a 30 minute commute, listen to traffic for 5 mins then have 25 more minutes to listen to good (and honest to god) NEW music without having some idiot rattle on and on about what they are playing..

      3) Since I'm in the country all my friends live atleast 30 mins to 1 hour away.. not exactly long trips but the XM radio makes them go alot quicker.

      4) I have a fairly large music collection myself at home and yes, even some MP3's I downloaded.. Secondly I don't have digital cable because I'm really thinking it's a complete rip off.. Something along the lines of 50 Bucks for the same old crap on normal cable BUT with music channels (I get the music channels on XM for a lot less).

      There yah go.. This here hick boy really enjoys listening to the music I want to when I want to.. I can tune in on 3 different types of trance/techno music and also listen to Alternative with a quick flip of the button.. It's all relative and I suggest keeping a slightly more open mind.. never know when you'll get fired and have to move out in the good ol' country...
  • by chicagothad (227885) on Wednesday October 23, 2002 @07:33AM (#4511678)
    The FCC just announce standards for Digital Radio: fcc.gov [fcc.gov]

    If "clear signal" is one of the key benefits of satelite radio, I would call this a major killer of the industry. Can you say "I-R-I-D-I-U-M"? I plan to be operating XM Radio in 6 months after I pick it up on EBay for $50.
  • Not the end... (Score:3, Insightful)

    by Hays (409837) on Wednesday October 23, 2002 @07:34AM (#4511682)
    I'm pretty sure with all of the deals these companies have signed with auto makers, all the customers they already have, and most importantly the millions of dollars in satellites overhead, they wouldn't just let them crash into the ocean because their revenues are starting out low.

    Even a massive project like Iridium eventually found a buyer. Even if both of these companies go bankrupt it would be an attractive purchase for some investor.
  • Yeah, whatever. (Score:5, Insightful)

    by jridley (9305) on Wednesday October 23, 2002 @07:36AM (#4511687)
    I am personally kind of surprised that they were even able to get online. Sure there's a market for coast-to-coast single channel coverage, but how much of the market can truck drivers cover?

    Most people spend 99%+ of their time driving within 50 miles of home, where one radio station will cover them. Anyone who's all that picky about what they listen to will probably want to listen to CDs anyway. Personally I'm probably going to get a car MP3 player (I was waiting for an OGG player but I'm tired of waiting).

    I spend $120 a year but I send it to public radio.
    • Re:Yeah, whatever. (Score:5, Insightful)

      by Asprin (545477) <(moc.oohay) (ta) (dlonrasg)> on Wednesday October 23, 2002 @08:15AM (#4511904) Homepage Journal

      Ummmm, I agree that this whole coast-to-coast coverage thing is completely overrated, but I have a different tack on it. To wit:

      Most people spend 99%+ of their time driving within 50 miles of home, where one radio station will cover them. Anyone who's all that picky about what they listen to will probably want to listen to CDs anyway. Personally I'm probably going to get a car MP3 player (I was waiting for an OGG player but I'm tired of waiting).

      Yeah - and one of the cool things about going on vacation every year is that I get to listen to all the radio stations from other towns along the way -- It's *great* to hear something different once in a while. I also like to go out to McDonald's for dinner while I'm at the beach - can't get a flavor like that at home!

      Seriously, though, it really used to be kinda fun hearing radio from other parts of the universe when driving at night on vacation -- especially sportstalk and talk radio. But that was before the dark times.... before the ClearChannel...

      By virtue of the ClearChannel fiat, doesn't broadcast radio enjoy coast-to-coast coverage now?
    • Re:Yeah, whatever. (Score:4, Insightful)

      by Shadow99_1 (86250) <.moc.liamg. .ta. .99wodahseht.> on Wednesday October 23, 2002 @09:17AM (#4512312)
      First I'd like to say that I work at a store that sells XM radio... I also got a discount on my XM hardware due to that...

      Lots of truck drivers have XM... lots of them... In fact the car audio shop in my store has done at least a dozen installs to big rigs over the last year... Yes to some that may not seem like much, but we aren't on any big truck routes so they are mostly going out of their way to get XM radio... Not to mention I've heard more than one truck driver mention that XM is the hottest thign going in the trucking community...

      This also benefits people like my parents. My parents have never ever flown on a plane, if they go on vacation it's by car... & it's really hard to find good stations on a trip through multiple states. Especially when going by interstates to your destination because you may only be in range of a station for maybe an hour, probably less. And the incredible load of garbage stations is huge as well.

      XM (& Sirrius) provide a way around those problems and the sound quality is better than most radio stations provide as well...

      Now onto the 99%+ comment... sure most people may nevego more than 50 miles away from their home towns even, but who says they have good music stations...? My local options are all owned by one company (who in turn are owned by clear channel) & the rock stations are as follows: clasic rock (60-70's), 'modern' rock (80-90's, & top 20 rock tunes only & their are 4 of these stations take your pick), Top 20 station (which plays rap, R&B, & occasionally rock), & one 'soft' rock station that was supposed to be hard rock, but they decided their audience didn't want that... So in case you missed it my radio options suck... I grabbed XM radio the first chance I got, though it's already cheaper now to get it then it was when I bought it over 6 months ago...

      I used to do CD's & in fact I created over 50 of them for use in my car... But it got so frickin' repetitive I couldn't take it anymore. Not to mention I can actually hear things I've never heard before on XM (Club music, Electronica, heck christian rock even...) all in high quality sound that is at least the equal of CD's... I thought about getting a car MP3 player, but they are more expensive up front & again I only hear what I have already heard a thousand times... Maybe you can stand that, but I couldn't...
  • bad business (Score:3, Insightful)

    by interstellar_donkey (200782) <(pathighgate) (at) (hotmail.com)> on Wednesday October 23, 2002 @07:38AM (#4511691) Homepage Journal
    The sat radio services have been live for what, less then two years? It seems disturbing that a venture of this size wouldn't have had a longer term plan.

    Sat radio is a great idea, and an idea that I have held off embrasing due to too many uncertianties. Why they chose to go with propritary hardware for their services is beyond me. $200-400 for the setup, and if the service goes out of business, you can't just call up the compitition to reprogram the radio.

    This can, and should be able to work in the long run; It's just that good of an idea.
    • Re:bad business (Score:2, Interesting)

      by ackthpt (218170)
      The sat radio services have been live for what, less then two years? It seems disturbing that a venture of this size wouldn't have had a longer term plan.

      Recall, it was another idea conceived while the bubble was growing. Assuming they survive the downturn, and I really do hope they do, they should do fine. Imagine GM, Ford or Chrysler gearing up assembly lines for bigger cars with bigger engines, just as the arab states realized they could gouge for petroleum (~1973) A shock to the system, but it didn't kill them, even while Honda and Toyota were eating their lunch.

    • I think the plan was in 1999: "Holy shit! Money's falling from the trees! Let's pick some up now and we'll just get more later."

      Then there wasn't more later. Most tech startups were like this. They get some money at first, then they expect to get more as they go along. It's just that more isn't always to be had these days.
  • by Daeslin (95666) on Wednesday October 23, 2002 @07:39AM (#4511694) Homepage
    Nah, they'll probably do the same thing as satellite phones. Declare bankrupcy, ditch their debt, and then take off. Heck, WorldCom's doing it and other bankrupt telecoms, why not everyone else?

    People used to joke that new startups were following the following model:

    1) Create a website

    2) ?

    3) Profit!

    But I posit that the today's companies have revised that to:

    1) Create something unprofitable

    2) Run up massive debt to pay for massive capital costs

    3) Declare bankrupcy

    4) Profit!

  • Satellite Radio and XM will basically become options on luxury cars so that those companies can get paid up-front for service. The manufacteurer will then pass off the cost to the consumer, and most likely the monthly fee will disappear. Or, they maybe just make it standard in luxury vehicles. The possabilities for markets for their products are there. I just don't see them using those markets.
  • What? (Score:2, Funny)

    by secondsun (195377)


    I thought all satellites had radios since sputnik.

    Oh wait, you mean satellite RADIO... thats out?
  • by randomErr (172078) <ervin@kosch.gmail@com> on Wednesday October 23, 2002 @07:42AM (#4511711) Homepage Journal
    AP has a story [thehometownchannel.com] published Oct. 21st about how local station(already has a huge market share) can now broadcast digital radio. Why buy a subscription for a satellite radio signal instead of catching a free local stream?

    Another thing, most people listen to the radio for local weather and traffic conditions. Satellite radio doesn't supple that need.

    Here's the AP story:
    Digital Radio May Give Shot In Arm To AM, FM
    Some Stations Will Broadcast With CD-Quality Sound

    A few months from now you'll be able to hear AM and FM broadcasts like you've never heard them before.

    Some stations will broadcast digital signals with CD-quality sound.

    Dennis Wharton with the industry trade group, the National Association of Broadcasters, said stations are already buying the equipment needed to transmit these signals.

    He said it'll mean local radio won't become a second-class communications service. Wharton said digital radio will allow stations to compete on an equal footing with cable and satellite-delivered radio services.

    In order to hear digital AM and FM broadcasts, you'll need a special radio. But you'll still be able to hear analog broadcasts on the radios you have now.
    • yeah right (Score:3, Interesting)

      by tswinzig (210999)
      1. The quality sucks (96kbps... yummy)
      2. You're still limited to the formats of your local stations, which means limited choice and lots of commercials.

      The only thing they've added is shitty digital sound... how exactly is that going to kill satellite radio?
  • Where's the value? (Score:3, Insightful)

    by Mattcelt (454751) on Wednesday October 23, 2002 @07:44AM (#4511719)
    What does XM offer that traditional radio doesn't?

    Let's see, no subscription - no wait, I have to pay a per-month fee. Traditional radio is free.

    I don't have to listen to ads? No, wait, I am paying for my airtime to listen to people trying to sell me stuff. Same as t-radio.

    Quality of music? I must be able to listen to indie artists and hard-to-find cutting edge stuff, right? Gee, that doesn't seem to be the case either.

    Static free? Hmm, most of the time my FM is static free, too.

    So I'm just not seeing the value of paying $300+ for a receiver and $120/yr for the service. The cost-to-benefit ratio is just to high.

    If they got rid of *all* the ads, I would probably do it in a heartbeat. But I'm not paying to have someone push product on me. (Note that I don't have cable TV either...)

    Matt
  • that it would fail.

    Why?

    Recall Iridium, the satellite mobile telephone service that failed?

    Well, Sirius is only offering to bring audio noise 1-way down from the satellite. No full duplex!

    If duplex lost, simplex can't hope to win!

    • Well, Sirius is only offering to bring audio noise 1-way down from the satellite. No full duplex!

      If duplex lost, simplex can't hope to win!


      Nice reasoning. Maybe you missed the point that radio is inherently one way communication!!! Its a broadcast.

      Similar reasoning would argue that all broadcast television stations are doomed to failure because they're simplex.
  • by dpbsmith (263124) on Wednesday October 23, 2002 @07:47AM (#4511739) Homepage
    I don't know about anything else, but the attempt to shift everything from a "purchase" to "rental" model bothers me enormously.

    I don't mind in the least paying $300 or $400 for a nifty gadget.

    I have VERY HIGH SALES RESISTANCE to anything that carries a "monthly" fee for anything. My nifty gadgets OFTEN last for, say, 100 months (a bit over 8 years) and I am quite capable of multiplying a monthly fee by 100.

    When I buy a $20,000 car, I'm quite agreeable to considering a $300 or $500 add-on.

    But a MONTHLY fee? Forget about it.

    Give-away-the-razor-and-make-money-on-the-blades is one thing. Sure, inkjet consumables are a ripoff, but at least the thing doesn't eat money when I'm not using it. But if someone tried to sell me a printer for $150, plus $20 per ink cartridge, PLUS $5.99 PER MONTH, I would behave badly.

    Perhaps I'm not the only consumer who can multiply by 100 in my head.
    • I don't know about anything else, but the attempt to shift everything from a "purchase" to "rental" model bothers me enormously.

      That's great and all, but this argument does not apply to satellite radio. You are not renting anything. You are paying for a SERVICE.

      I pay a guy $20 a month to mow my lawn. I could do it myself for free, but I like the service.
    • No one will pay per-month charges for things they already get free over the air. That's why cable and satellite TV are destined to fail.
    • Do you pay for your utilities? How can you stand the monthly bill for those? And, on top of that, those bills fluctuate in price! One month, my electricity bill will be $30, the next it's over $40! What a rip-off! They're my electronics, I bought them, so I don't want to have to pay an additional monthly fee to use them!

      And what about cable? If I'm out of town for 3 weeks out of the month, I still have to pay full price, even if nobody was watching the TV! It's a rip-off, I tell you!

    • I used to think this way about inkjets too (they don't eat money when I'm not using it), but then I discovered that if I leave an inkjet unused for too long, the ink nozzles gum up, rendering the ink cartridge and all its overpriced ink completely useless. So the cost is more like $150 for the printer, then $20 per month because the cartridge has to be replaced every time it gums up. I've since sworn never to buy another inkjet. Laser toner doesn't do this.
  • by no soup for you (607826) <jesse.wolgamott@gmail . c om> on Wednesday October 23, 2002 @07:55AM (#4511776) Homepage

    ok, so XM is expensive, that's true. And all things being equal, it's very tough to make it up on volume when you're loosing money on each transaction. I currently have XM, and to be honest, I don't know if I'd buy it again, but I do love having it

    That being said, here are three reasons to get it:

    1. XM Unsigned - radio play for independent, nonsigned bands
    2. Commercial Free - XM has a mix of commercial free stations with 24 hour music, and commercial stations (VH1, MTV, etc)
    3. Seeing the name of the band and song you're listening to is very cool

    So, reasons not to get it?

    1. You might be throwing money away on technology that doesn't see a long life (of course, some people got $100 back on their DIVX players)
    2. $10.95 per month, per device
    3. $500 setup - new cd player, new receiver, new antennae
    4. It gets bad press on ./ (only kind of kidding)
  • by upstateguy (90019) on Wednesday October 23, 2002 @07:56AM (#4511777)
    According to the recent New Yorker article on Willie Nelson, he loves satellite radio which lets him listen to a few of his musical inspirations (in cluding Frank Sinatra). But how many of us really are on long drives in tour buses with drivers?

    I'd like to see them offer programming from other countries. Give me a feed from the Australian Broadcast Company, or the BBC, even plug in the Voice of America stations (if they allow that now) to hear what we're telling other nations about ourselves. Let Grandma listen to radio from the 'old country'. I love listening to radio stations on the net now and I think to have *that* in your car to listen to would be more a great selling point.

    • And has been offered since the early days of XM and Sirius both. It's the biggest reason why I will be getting XM.

      As for the others, there's no market -- BBC is the gold standard in (English-language) international news media, everyone else trails behind. And VoA still is not allowed to broadcast to the U.S. -- there's a good reason for that, the government isn't allowed to (overtly) propagandize to U.S. citizens. XM runs several international music channels programmed in non-English languages; I couldn't tell you whether they also contain foreign-language news.
  • by mbone (558574) on Wednesday October 23, 2002 @07:56AM (#4511782)
    There is, IMHO, no chance for Sirius & XM to survive as presently organized. XM needs over one million subscribers to break even - they have 200,000. Sirius has similar needs, but not nearly as many subscribers. Does this mean that things are hopeless ? No. Their orbital assets are real, and have real value. Just like in the case of Iridium, the initial investors will take a bath (those that didn't cash out) and the reborn companies will be able to make a profit.

    Remember, in the Satellite world, bankruptcy can be part of the business model!
  • Good Riddance, I Say (Score:5, Informative)

    by Caoch93 (611965) on Wednesday October 23, 2002 @07:59AM (#4511796)

    I bought an XM radio kit with some of my signing bonus last year. Since I was going to commute one hour each way down the interstate, I justified the cost to myself as a nice way to have better programming for my commute. The station guide seemed interesting enough...I could get BBC radio, CNN, CNet, a channel of standup comedy, selections of music that interest me, and so on. The $10 each month seemed very reasonable for commercial-free options that I'd enjoy.

    So, I bought the kit and I installed everything as per the manual. I activated my account. I got everything in order. I started listening that night. It was really cool to be able to get a continuous mix of house techno and, with the spin of the dial, CNet news. I loved that, if I wanted a laugh in the morning, I could listen to comedians with talent instead of shock-jocks with carnival barker voices. Everything was all well and good...

    ...until the first time I actually tried to drive any actual distance with the thing. My commute is on an often-used 60-mile corridor in Florida from Tampa to Sarasota, and I couldn't get a signal for more than a few parts of it. So, I called XM technical support. The support lady was nice and said she'd file a trouble ticket. It was a very new system at the time, so I gave them the benefit of the doubt.

    And then two weeks went by, and I still couldn't keep a signal over my commute. I also started noting that I couldn't keep a signal in-town all that well. I also made a couple drives through the major metro areas of central Florida and could not keep a signal. This started becoming frustrating. It was about this time, though, that I noticed the programming wasn't all that good. The comedy channels just played the same handful of routines by trite comedians over and over again. The 80's station wasn't really covering what I wanted to hear, either. Slowly, the stations I was enjoying just became boring.

    After letting XM take two weeks to try and resolve their issues, I called again, only to be told by the support rep that there were not any such problems and that everything was my fault. I explained my configuration to her and she agreed I hadn't done anything wrong. I told her that XM had been given a month of opportunity to communicate with me and hadn't done so, and so I needed to cancel my account. She then asked me to hold the phone for a minute. When she came back, she reported that there was indeed a problem in my area and, if I could just sit tight a little bit longer, it'd be fixed.

    By this point, I'd given XM a month, and I needed to return the radio soon or I wouldn't be able to get a refund from Best Buy. I cancelled my account and took the radio out of my car. I was a little disappointed that I lost my alternative to crappy commercial radio, filled with advertisements, music I hated, shock DJs, and insipid conservative commentary on the news stations. Then I discovered I really rather enjoyed the one alternative I had left- NPR. I started listening to Morning Edition and All Things Considered over my commute, both of which are pleasant and informative shows, and both of which are provided commercial-free.

    So, I save my $10 every month and, every third month or so, I use the money to treat myself to a new audiobook or a couple of CDs when I want an alternative to NPR. I really have to say, if you're going to get XM just to have an alternative to standard radio, see if there aren't some local or public stations you like first. Here in Tampa, we have something like two NPR stations and a local, commercial-free station that runs some excellent world news, commentary, and music you'd never find even on XM.

    • by foo fighter (151863) on Wednesday October 23, 2002 @08:28AM (#4511990) Homepage
      I just want to say that if you really like NPR you should consider giving that $10 a month to the public radio station you listen to instead of XM.

      $120 a year isn't much to most upwardly mobile middle class Americans, and I believe public radio is worth at least that.

      I listen almost exclusively to North Dakota Public Radio. Even here in ND the radio market is saturated with Clear Channel crap. I've found NDPR, to be informative, entertaining, and to have regional content that the now Clear Channel stations no longer carry.
    • Both Sirius and XM use S band (2.4 GigaHertz or 12 cm wavelength), which translates to line of sight only.

      The joke in the Satellite biz is that XM is a nationwide chain of repeaters with some satellite fill in. There is a lot of truth to this - both of the XM satellites are in equatorial orbits, and so are always fairly low in the South over most of the US - any Southern blockage, and you need a repeater.

      XM has spent hundreds of millions of dollars on the ground repeaters, and the last time they raised cash, it was to buidl more. It sounds like they have some way to go.

      The Sirius system is technically superior, and uses three satellites in inclined orbits, so that one is always high in the sky over the USA.

      The good side of this is that blockage is reduced. The bad side is that the satellites move around in the sky, so the blockage will vary as a function of time of day. This leads to a hard juggling act - is it worth putting up a new repeater if the signal is only blocked from 3 to 4 PM ?
  • I see this as the major fault of the DR plan. Why would I pay for a service that uses advertisements to suppliment income? By the way, I don't use cable for the same reason. I believe if you pay for a service, you should exclusively get what you pay for and no extra baggage. If the service has ads, then the service should be free or public. I think a better plan for DR would be to incorporate multimedia broadcasting. You know, like what 224.0.0.0 nets were reserved for (but not used anymore). I think it'd be great to have an on board computer that gets continuous weather updates and news reports (like what I have on my pager, but more detail). So you could get updated weather maps and news with some live video. Yes, maybe not today, but the service definitely has promise. Just drop all that ad crap. I won't pay for ads!
  • by loveandpeace (520766) on Wednesday October 23, 2002 @08:03AM (#4511815) Homepage Journal
    Maybe it's time for satellite radio to adopt the Spring and Fall Fund Drives that plague avid listeners of public radio.
  • I forecasted this was going to happen about a year ago here on Slashdot. It was so clear then to me.

    Simple economics. They need 400k subscribers on day 1. They need millions of subscribers within a year. They're off by an order of magnitude.

    I have first hand knowlege and experience of how these things get off the ground in the first place.

    Basically, the marketing is done too much by engineers and scientists.

    I contributed to this by co-developing a very sophisticated software application that analysed terrain data from US Geological survey. The results showed that there was a huge potential target market.

    You've got scientists on the one end wanting desperately to build a new bird that does what no other bird does. What they have no clue about is how the consumer couldn't give a damn that incredible technology was involved and hundreds of millions spent to bring some sweet sweet sounds to their automobiles.

    XM is far simpler than some of the other 2 way projects like Satellite telephones (American Mobile Satellite, dba Motient).

    They need to find a way to put a bird up there that not only provides a nice product, it's got to provide a revenue stream in the order of billions.

    400,000 subs is only going to get you about $100M per year. You need to start out getting about $1B per year.

    I say, follow the successful business model of the Internet. What put Internet commerce on the map? Porn. For some reason, porn enthusiats are very willing paying customers.

  • by isdnip (49656) on Wednesday October 23, 2002 @08:10AM (#4511873)
    The FCC adopted the wrong model for satellite radio. The pigopolists pretty much got what they wanted, and are suffering for it.

    For technical reasons, there are only two satellite radio networks, Sirius and XM. Both have capacity for a lot of channels. The FCC decided to use a "market" approach and allow each company to choose details of its own technology, so their radios are incompatible. Imagine how well TV or FM radio might have done if different stations required different receivers! Consumers are locked in. Sure, it's nice work if you can get it, but consumers aren't quite as dumb as the companies wanted them to be.

    Even worse, the duopolists were not charged as common carriers, but as programmers. So XM and Sirius determine what they will carry, and if they don't want something run, it won't run. Sure, they've figured out that they have to offer some kind of musical variety, so they have country & western streams, '70s rock streams, '80s rock streams, sports streams, etc. But the plain fact remains that they control the horizontal, they control the vertical, and a Sirius or XM subscriber won't be exposed to anything that the suits at Sirius or XM don't want them to hear. I guess to them, a stream playing Wilco and an NPR stream are radical enough.

    So if this turkey fails, maybe somebody else will try again. If an operator were less greedy, and leased enough channels to independent programmers, then a workable business might be found.
  • by dave_aiello (9791) on Wednesday October 23, 2002 @08:21AM (#4511939) Homepage
    I am one of those people who listens to AM radio a lot because I like to listen to talk and news radio. There are a number of services on XM that appeal to people with such tastes:
    • BBC World Service
    • Fox News
    • CNN Headline News
    • ABC News and Talk
    • The Weather Channel
    • CNBC
    • CNNfn
    • Bloomberg News
    • CNET Radio
    • C-SPAN Radio
    These are services that you can't get on the radio in 99 percent of the country, unless you use satellite radio. How many people will pay for this? Not many, but, this is probably another vertical market similar to over-the-road truckers.

    I haven't bought an XM receiver because I don't think the service will survive in its present form, and I don't have the disposable income that I had prior to the recession.

    I haven't seen this posted elsewhere in this discussion, but an AM radio station in NYC has already brought HD-Radio on-line [wor710.com]. This is interesting because I don't know of any receiver I can buy the handles this service at the moment. If HD-Radio doesn't add to the programming options we receive, however, no consumer will care about it. Then, IMHO, all it will be is a long-term way for the broadcasters to reduce transmission costs.

  • by Anonymous Coward on Wednesday October 23, 2002 @08:22AM (#4511946)
    as someone who both has XM radio and is an installer in the mobile electronics industry, I'd have to say that XM is going to be around for a while, but Sirius may simply be a transient company.

    The real question here seems to be "what is its attraction?" To answer that I'd have to say that most of the hype is more or less true. To compare choice in music between your local FM station and a satellite station, ask yourself what you hear most on your local FM station.

    I'll use rock stations as a case study. More than likely there'll be one or two rock stations in your area if you live in a major market. I know in philadelphia the only way I can tell the difference between the two rock stations is by the talk shows that they air. Both stations pretty much play the same set of alternative, a little bit of guns and roses, and then a touch of heavy metal thrown in for good measure.

    XM radio has the advantage over this setup simply because one company controls 10 rock stations, so they can coordinate music coverage between the stations and they can specialize in genres of rock. For instance there is one station that only plays alternative, another that plays folk rock, one devoted to heavy metal, and another just for hard rock. There is a channel devoted only to unsigned bands, then another that adopts the format of a university radio station; playing only the newest music and underground rap.

    Local radio stations have to compete with each other and they are only given one channel with which to work. Therefore, they will have a tendency to stay in the middle of the road and go with what the focus groups tell them. That's why your local rock station predominantly plays what most people will like. That's why they sound the same.

    Thinking about satellite radio in terms of local stations is why many people draw such damning conclusions. Its much more like a webcast: stations thrive on specialization and expert knowledge of a genre.

    And as for commercials, you get on average about 1 commercial every 20 minutes. Compare that to 5 in a row every 20 minutes on local radio.
  • by daveman_1 (62809) on Wednesday October 23, 2002 @08:26AM (#4511978) Homepage
    I've been itching to buy one of these as of late because I live in an area with poor analog radio reception. Personally, there are a couple of reasons I've been holding off buying one of these...(hope you're listening sirius/xm)

    First of all, you can only get a receiver for your car! Is this really the only place they expect people to listen to the radio? Sony makes a unit for the XM systems that is car removable, but I have been told that is just the headset and the "base unit" which mounts somewhere like under a car seat is separate.

    Secondly, they need to come up with something better than "just tear out your factory deck". I LIKE my factory deck, and for those who don't know this already, you get better resale on a car that has the factory deck in it. Tearing out a custom unit when it comes time to sell a car is a pain.

    Third, and probably most importantly for the prudent consumer, "Will I make the right choice?" The topic of this thread alone should be enough to convince most that this isn't a device you want to run out and spend $300 on. I want a little bit of a guarantee that my nifty new receiver isn't going to become a useless box less than a year after I buy it because the network is no longer in business.

    Which brings me to point four: "Why can't I have a receiver that works on both Sirius and XM?" Yes, I realize they are competing for the same market segment. I DON'T CARE. I am a consumer. I want some guarantee that if Sirius(the network I'd probably choose due to a choice of programming) ends up in bankruptcy court, I want to know I have the option of getting service with XM. These devices are just too much money to be throwing away. And I want one that works in my car as well as my home.

    Sirius seems to offer a bit higher quality programming than XM. XM seems like a whole lot of the shit that is on television, only now I can listen to it. I can pretty well guarantee that most consumers who are willing to shell out $10 or more a month for this type of service, which is basically radio(something we're accustomed to getting for free), aren't going to willingly listen to a bunch of damn commercials. This is in fact the reason I would choose Sirius over XM. Because they have NPR. No commercials. I get to listen to the news in peace. Commercials are just plain annoying.
    • Well, two of your reasons are wrong.

      Sony, Alpine, and Pioneer all make FM-Modulated XM receivers that will work with your factory deck.

      Sony makes a home piece for XM. Looks just like the car piece (the overgrown radar detector). $299 MSRP. You can buy a "car kit" for $170 or so that is the FM Modulator. So... $470 for both the home and the car.

      I like XM, and I hope it succeeds. Please get your facts straight before howling.
  • Snowballed... (Score:3, Insightful)

    by facelessnumber (613859) <drewNO@SPAMpittman.ws> on Wednesday October 23, 2002 @08:28AM (#4511991) Homepage
    It wouldn't surprise me if their finanical trouble started relatively small and then snowballed. My boss just had XM installed in the Company Pimp Van, but he we originally looking at Sirius. Our city was one of the initial test markets for Sirius, and the store he went into was covered in Sirius promotional propaganda. When he asked about it though, the salesmen wouln't even demo it, saying "Nah, you don't want that. They may be gone in a year - You want XM." I can't help but wonder if their sales reps aren't partially to blame for the decline.
  • XM Radio CEO announced when they first got started that they would need 1 million customers worldwide to break even. That's considered to be a lot of people, but then again, worldwide, it's really not. XM just needs some more time. And somehow I doubt they will have any trouble getting capitol from investors to keep them going as they continue to grow. Lets be honest, XM and Sirius are still really young when considering how long they've actually been offering a product, so it's way too early to rule them out.
  • Sirius is great (Score:2, Interesting)

    by qtopcatz (619863)
    I signed up a couple of weeks ago and have not listened to local radio since. Clear Channel (owns more that 1600 stations) has destroyed local radio by programming the same 50 songs on whatever format they own. In addition almost every station syndicates the same mindless drival morning talk shows. Sirius frees you from this which is the real reason for spending the money to get it. Hopefully more people will realize this is the true reason for getting Satellite Radio. (Sirius would seem to be better than XM)
  • XM versus Sirius (Score:3, Informative)

    by zero_offset (200586) on Wednesday October 23, 2002 @09:03AM (#4512221) Homepage
    This information is from memory, from a few articles that ran in magazines about a year ago -- I want to say either Forbes or Fortune, but I'm not sure, as well as some of my friends' car stereo magazines. Anyway, at the time XM was still pretty new, and Sirius was just beginning to take subscribers.

    First of all, XM is a Sony operation through-and-through. The main reason XM is doing so well is that Sony has pumped a bunch of money into it, knowing up front it'll run at a loss for a long time. On the other hand, Sirius is an independent business with all the attendant risks and concerns. Unfortunately Sony is a giant, monopolistic bastard of a company who pimps cheap junk at ridiculous prices, so you can guess which side I root for in this battle. :)

    Second, there is the satellite problem. Sirius placed a small number of satellites in very high orbit. This means each satellite can cover a relatively wide portion of the Earth's surface. Also, these satellites are in a more stable orbit so they have a longer life expectancy. Launch costs were higher, however. Conversely, Sony opted for low-orbit satellites. This means the launches were cheaper, but the life expectancy is lower, and each satellite has a much smaller area of coverage, meaning Sony had to use significantly larger numbers of satellites.

    Worse yet, the XM satellites are unexpectedly having problems holding their orbit, so they're using fuel at roughly 3X the expected rate. This is one of XM's largest problems. Sony faces having to replace the satellites YEARS earlier than expected. I don't remember the exact figures to replace the satellites, but the price tag was vast -- like $700M or $1B or something equally insane.

    Third, there is the ground station plan. Both systems use a network of repeater stations. These (combined with receiver onboard buffering) ensure you have a steady signal when you drive through an underpass, for example. Amazingly, Sony only has 75 repeater stations in the US, all near major cities. The Sirius plan calls for 2,500 repeaters spread somewhat evenly throughout the country. I don't recall how many Sirius currently has, but it's already much more than XM.

    Fourth, of course, is the question of content. Sirius costs a bit more than XM, but it's also largely commercial-free. Sony charges you a not insigificant amount for XM, and then they sell advertising on almost all their stations anyway.

    Fifth is the availability issue. Since XM is a Sony-funded effort, it was available everywhere almost from Day One. However, Sirius has a ramp-up plan which targets major cities first, then rolls out to everyone else over a 12-18 month period. This may be important to frequent travelers.

    Sixth and finally, speaking of frequent travelers, another post pointed out that people like truckers are a prime target market for satellite radio. Interestingly, there is another important target market mentioned in the articles, but overlooked here so far (I think) -- ships. Merchant ships and cruise ships are potentially a HUGE market for satellite radio. It turns out that XM was very heavily focused on land-based use, and their offshore coverage is largely accidental. Because of this (and XM's use of low-orbit small-footprint satellites) XM coverage doesn't extend very far into the ocean. However, Sirius took that market into consideration when they planned their service, and their coverage extends quite far out to sea. Again, unfortunately, I forget the exact numbers, but the difference was serious, like 20 miles compared to 400 miles.

    It's my opinion that Sirius is the better technology for these reasons and others (even ignoring my intense dislike for Sony), but we all know how often Joe Sixpack pays attention to little details like that.

    Again, that was all from memory based on information I read almost a year ago, so please don't beat me up if I got any of it completely wrong (and please correct me). Hope you found it interesting.

    • Re:XM versus Sirius (Score:2, Informative)

      by neowolf (173735)
      I'm a big proponent of Sirius, because I use it and because I am anti-Clear Channel and they own part of XM.

      I think you had something backwards in your post- Sirius has very little need for ground repeaters because of their high-orbit satellites (they also have more satellites than XM). I believe I read that Sirius has 3 high-orbit satellites, while XM only has 2 low-orbit ones. (These are actually operating, I don't know about "spares".) XM NEEDS lots of ground repeaters because their satellite signal comes from low-orbit satellites near the equator and line-of-site isn't very good, especially in cities or mountain areas. Sirius' satellites, on the other hand, are in moving orbits high above the US, and need very few repeaters because at least one satellite normally has line-of-site to pretty much everywhere. Neither service works all that well (or at all) in tunnels or canyons (although Sirius seems to work fine in the mountains of Colorado), but then again- neither does regular FM radio. I've had Sirius for a little over a month, and the only place I have lost signal for more than half a second has been in a downtown Denver parking garage underneath a skyscraper.

      I agree- Sirius has better technology. Unfortunately they have to catch up to XM, and as has already been said on /.- there are a lot of unhappy XM customers because their coverage just isn't that good. This has left a bad taste in their mouth- and they are unlikely to switch to Sirius because of it. They are also telling their friends that "satellite radio sucks" so they are unlikely to try it. In reality, as you have said, XM is really a nationwide ground-based radio network that uses satellites to fill in. For me- it really isn't satellite radio.
  • by supabeast! (84658) on Wednesday October 23, 2002 @09:04AM (#4512224)
    I recently purchased a car stereo, and noticed that most of the $300+ (USD) head units that handle satellite also play MP3. Satellite radio requires $10/mo service fee, and the purchase of a $150+ reciever.

    Given the choise of spending at least $160 for satellite radio, or to just dump a few hundred tracks onto a couple of CD-Rs, I think I know which option most people will go with
  • I refuse to put that ugly shark fin on my new sports car! Too bad they could not figure out a way to just replace/reuse/recycle the old antenna. Since the shark fin has to be at the highest point of a car, where would you mount such a thing on a Jeep Wrangler or VW Cabriolet anyway?

  • by MarkedMan (523274) on Wednesday October 23, 2002 @09:12AM (#4512275)
    I seriously considered one of these systems. Here are some of the reasons I didn't buy one.

    Conflicting Standards - It is the norm in the electronics industry to come out with multiple formats in the hope of locking the users into your service. This is true of the Satelite radio services. So, once I buy a radio I am stuck with either the service I originally chose, or a large $500 hockey puck.

    Can't Try-Before-Buy - I can't try before I buy, instead I have to shell out 300-500 buck-a-ronis and then pay a monthly fee - all to find out if it is worth having.

    Fear of Bankruptcy - Even if I love my new stations, if my particular service goes belly up, my pre-paid time is lost, my radio turns into the hockey puck, and I am out of luck. In this business climate, it is a very real consideration to me.

    Fear of Declining service - once they have you, they have you. If they need to actually make money, or failing that, loose less, the first thing to go will be the DJ's. And then all you will hear is the same songs over and over, programmed by Mort (you know, the guy who was once an assistant to the Manager for one of those 80's bands that you kinda recognize their song when it comes on the radio, but never really remember their name.)

  • These sattelite radio companies are dead meat. They don't even have competition from digital radio yet and they are struggling.

    Current radio operators will soon roll out digital signals alongside their analog counterparts. This will allow people to upgrade slowly to digital recievers without missing any programming.

    Sirius and XM will be gone in two years.

    -ted
  • Close Call (Score:3, Interesting)

    by kenp2002 (545495) on Wednesday October 23, 2002 @09:28AM (#4512404) Homepage Journal
    I came close to getting SR but when I called I asked a simple question:

    "What guarantee do you have in writing that, while the stations are currently commercial free, ensures that the stations STAY commercial free?"

    This is the response
    "We cannot guarantee at this time that we will remain commercial free."

    After having a lawyer friend make some calls this was the response
    "The commercial free aspect of our service is an introductory program only. We are currently pricing out commercial time and negotiating with prospective sponsors. We do not have any fixed implementation time yet."

    Man, what ever happened to false advertising? Serves these shady bastards right for trying to fleece their customers. I feel really bad for all those who did subscribe.

    In fact answer me this: Why, if I pay for cable TV, are their commercials? I remember early on that cable was virtually commercial free. I also clearly remember when Showtime, Cinemax, and the Movie Channel had zero commercials (HBO didn't have their own station yet. They were more of a production studio. I remember getting HBO's station when it came out, begging my Mom to get it, for one thing... Fraggle Rock, mmm Doozer sticks.... Ahhh...)

    It's kind of like public education, when is enough money enough? Studios keep telling me that it costs too much to make a film. Well first lower salaries... oh wait that solves the problem.

    The problem is that the contemporary marketing methods have no concrete, economic validity anymore. They have brushed aside capitalism in exchange for poorly disguised Socialism and we are paying the price. Capitalism is the idea the in economic terms it is survival of the fittest. True Monopolies, Government bailouts, restrictive cost of entry, and plain criminal racketeering have crippled Capitalism and forced people to embrace Socialism thinking it will solve the problem. This is the same mentality the satellite radio producers were thinking.
  • astroturfing the sky (Score:3, Interesting)

    by spoonyfork (23307) <spoonyfork@gmailRASP.com minus berry> on Wednesday October 23, 2002 @09:32AM (#4512434) Journal
    guerilla marketing

    I work in IT at a Fortune 5 company (woohoo). The coffee cabana's here have been littered with guerilla marketing by people paid to seed interest in this technology for several months now. The spam they leave lying around trying to make it look like people are reading about it on their breaks are almost laughable. It is like those people who are paid to hang out in bars with a new mobile phone or wear designer clothes to "advertise" in stealth mode. The ads for XM are misleading and the local interest is fake. BTW, I don't care how they try to skirt around it: the service is NOT commercial free.

    standard option

    XM and the like have been heavy to push factory installs of these units in demographically selected automobile models. There are groups at the Big Three automakers that are designing marketing plans around these technologies. I imagine it will be along the lines of "first 6 months free!" then you get $10/month'ed to death like every other subscription service that you don't need. The lazy will keep paying it and think they're getting value.

    transmission control

    I think it is interesting how it is billed as satellite radio when in fact the majority of subscribers will be receiving signal not from the satellites but from the repeater towers they had to erect in the major cities to deal with the signal loss caused by tall buildings. San Francisco, Los Angles, New York, Boston, Chicago... they and more only run on the repeaters. Subscribers of satellite TV can tell you what happens to the signal on a stormy day or even a cloudy day. Ask this to your satellite radio provider: does it come with local channels?

    epilogue

    I've discussed this technology with my family and friends and advised them to avoid it like the plague. I did the same thing when those DivX players came out. It is bad news people. Stay away. Stay far away. Invest your money in public radio.

  • productivity (Score:3, Interesting)

    by zogger (617870) on Wednesday October 23, 2002 @09:48AM (#4512569) Homepage Journal
    --cyberfriend of mine told me she and her husband were so impressed with satellite radio when they got it for themselves that they installed it for their drivers on all the trucks in their small trucking company. She said-and I agree- keeping employees happy just makes more sense when it's a minimal cost like this. Long haul truckers cover a lot of turf and regular broadcast stations reception can change wildly sometimes depending on where you are driving, whereas the sat radios work most anywhere's and are very good quality audio. --nice to know there's decent bosses left.
  • by neowolf (173735) on Wednesday October 23, 2002 @10:00AM (#4512686)
    A lot of you are missing the point! There have been too many posts here about the virtues of "digital radio" and how it is going to kill satellite radio.

    Satellite radio is appealing to people who live in cities with crappy local radio, or none at all.

    It is VERY appealing to people in Clear Channel controlled cities that are sick of listening to the same crappy music over and over again with stupid syndicated drive-time radio shows. It is also appealing to people who are sick of hearing 10-minute blocks of commercials on local radio stations.

    It is also VERY appealing to people who live in areas of the country where there is limited or no decent radio service. It is also very appealing to cross-country truck drivers, people with long commutes in areas with bad radio reception, and for recreational use in areas with bad or no radio reception.

    All "digital radio" does is allow you to get the same shitty programming in areas that already have decent radio reception, but with much better quality. In other words- digital radio does almost nothing to compete with satellite radio.

    All digital radio really does is allow the company that is licensing the technology to make a butt-load of money, while it allows the FCC to drool over the possibility that it can eventually get back radio bandwidth by forcing people to go "digital" in 5-10 years (just like they are trying to do with TV now).

    I think in the long run that anything digital is a good idea, and I like the idea of digital radio in the future (although I don't particularly like the current plan for it).

    I don't believe that hailing digital radio as a satellite radio killer in the next couple of years and extolling its virtues as a "free" service is valid. One of the biggest advantages to digital service is it can be much more easily controlled by the source than an analog signal. Sure- it's free now because there is no way to control who listens to it. What happens when all radio is digital? Do you honestly think it will be free then? In the mean-time- how do you think all these "free" radio stations are going to pay to upgrade all their equipement for digital service? Yep- more commercials. A lot of people complain that there are more commercials on TV now than ever before- ever wonder why? Sure, we can chalk a lot of it up to greed, but we also have to look at all these TV stations that are now being forced by the FCC to upgrade all their equipement to digital/HDTV.
  • by Powercntrl (458442) on Wednesday October 23, 2002 @10:56AM (#4513254)
    I never liked the idea of satellite radio from the start? Before you start sniffing for troll aroma, let me say I already HAVE a form of Satellite radio - DirecTV. Since I mainly listen to pop/rap/top-40 stuff, DirectTV's digital audio-only stations play the same songs I listen to on FM, but guess what - I only listened to them maybe once or twice as a novelty.

    Yea, commercial-free radio is neat... But some commercials are actually entertaining, Bennigans for example comes to mind. Yesterday, I heard a commercial for Time Warner Roadrunner service and the spokesperson was mouthing modem tones ("I no longer have to hear those bleeep beep blah pbpbpbpbpbpb dialup sounds") - it was hilarious. Do I like all commercials? No, certainly not - but missing the good ones would really suck.

    I don't know about XM or Sirus, but the local stations all have DJs that put people from the area on the air to give shout outs, talk about things happening in the area and take requests. I don't care if the actual station is run out of a closet in Bumfsck, Alaska, as long as they're still Central Florida-centric, it seems more "personalized". Stations seem to realize that part of getting people to listen is listener participation. Hell, I've even called in a few times to vote for songs and make requests.

    The other major problem with satellite radio is you can only listen to it where the equipment is. Yesterday, I was working on my moped (yes, I have a car too, the moped is NOT the reason for not liking satellite radio) in the garage - there's a boombox in the garage with a FM tuner, a tape player (what the hell are those things again?) and a CD player. I wanted to listen to music and didn't feel like getting up every 74 minutes or so to change CDs - so I put on the radio. If I had a satellite radio service in my car, I'd feel like I'm wasting my money since the majority of the time I listen to music (while working in the garage, mowing the lawn or in front of the computer) I wouldn't be able to use it. If I want to hear high quality commercial free music with just the songs I want - well, I can just bring my hard drive based MP3 player with me...
  • by nadador (3747) on Wednesday October 23, 2002 @10:58AM (#4513270)
    since the last major Apple product launch.

    Satelite radio is too expensive. Says the man next to the $4000 QuakeStation. All kidding aside, there is a wealth of programming on XM and Sirius that isn't available on over-the-air radio. Some of us don't have thousands of dollars invested in music libraries, or we didn't get broadband until Napster was already gone, so we don't have a million CDs and MP3s to entertain us. For some people, the programming is definitely worth the cost. The whole point of the stories is that there might not be enough.

    I love XM. XM Classics played a selection from a Swedish composer yesterday that I'd never heard of . Left to just my CDs and Minidiscs, I never would have heard that, nor known that it existed. I can't listen to a simulcast of CNN in Spanish on my way to work without XM. Hell, I can listen to live NASCAR race coverage on XM. I don't own any country CDs, but I can still listen to a ton of different country music. I can listen to the BBC, or CNET Tech Radio.

    The variety is *so* worth the cost to me. Maybe its not worth it to you. But please, stop freaking out about it.

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