Posted by admin on 2009 Jun 8

The Future of Radio part 3

The Death of Satellite radio
History is filled with great ideas that have been made obsolete by technology.
Being an eternal music lover, I remember having more cassette tapes than i could keep track of. For most people in third world countries who couldn’t afford to buy LPs, blank tapes were a cheap way to share music and to keep a copy of music we couldn’t afford to buy. As we all know, Cassettes and even CDs have been now made almost obsolete by MP3s.

Satellite radio seemed like a great idea at the time it was created: Launch a bunch of dedicated satellites, transmitting exclusive, advertisement-free radio programming, and use the subscription model to earn revenue and make a profit.
Unfortunately, the creators and investors in satellite radio never saw the freight train of technology coming down their tracks.
Internet radio, the iphone, and iphone apps like the Pandora player allow anyone with a phone data connection, to listen to music and internet radio programming anywhere in the planet, anytime, for FREE!. How can you beat that combination?
It is just a matter of time before other iphone net radio players are created and you can listen to any of the thousands of internet radio stations and podcasts around the world using your cell phone.
Despite this, there are a few who still believe that satellite radio is a viable medium.
Let’s do a little comparison:

Satellite radio:
1 – Requires the purchase of a dedicated tuner, much like old FM radio technology.
2 – Is not truly portable, you can only listen to satellite streams only if you are in front of your computer or if you have a satellite receiver. (you can actually buy an ipod-styled “portable” satellite radio for a mere $270 (!), subscription not included)
3 – Doesn’t scale Geographically. The service is only available to US consumers.
4 – Uses the same human radio programming model as FM radio. It doesn’t offer the music discovery services and social networking of computer programmed internet radio.
5 – Is not readily accessible to indie artists and labels, just like most mainstream FM radio stations.
6 – It is losing customers every month
7 – It has never, ever made a dime of profit, despite their subscription model.

Compare that, to the the features of the iphone + Pandora player combo:
1 – No need to purchase dedicated hardware. Use existing iPhone and wireless data service to listen for free. All competing phones in the future will have similar services to the iphone.
2 – Portable. Listen to internet radio streams, anywhere where there is wireless coverage.
3 – Worldwide coverage. Users outside the USA with an iphone can tune in.
4 – Uses superior music programming model. Leverages social networking.
5 – Indie friendly. Accessible to any music producer / label.
6 – Rising in popularity every month
7 – Profitable. Pandora expects to make a profit in 2010.

It is clear as daylight: Satellite Radio is dead. Satellite Radio has been made obsolete by a combination of the iphone and internet radio stations, despite the ramblings of some music biz “experts”.
I don’t expect the Satellite radio format to completely dissappear. It will become a niche medium with a few million devoted users, while Internet radio explodes in popularity and features all around the world.

A few related articles:
The Future of Radio Part 1
The Future of Radio Part 2

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