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

Well, Bob is back at it again, claiming that internet radio Colossus, Pandora SUCKS because:

1-According to Bob, computer compiled radio is bad, because you have to weed out the “crap” music that gets played along the “good” music. Yep, according to Bob, it is a sin if the Pandora algorithms for whatever reason play something that doesn’t completely suit your fancy. Nevermind most younger listeners have obviously a broader listening palette than Mr. Lefsetz and want to experience something other that the usual recycled list of Top 40 candy songs (Coldplay, Nickelback, etc) he seems to blog about so much. If anyone wants to listen 24 hours of Nickelback, they you don’t need internet radio.. they just need to fill their Ipod with all the albums!
Radio, at best, is a medium of musical discovery, not a medium of static and inane music playback.

I guess the Pandora algorithmic model is nowhere as good as the revolutionary model of physical radio stations where *everyone* loves *every* song in the playlist programmed by your favorite payola-bribed radio personality. This is why land radio is a thriving business and kids can’t get enough of it. LOL
I guess Bob just doesn’t get it: Pandora is not your Classic Rock radio station where they play the same Starway-to-Freebird over and over again. Get over it, Bob, the model of human programmed radio you grew up with is DEAD. DEAD.

2-Bob claims that Pandora sucks because it wants to turn a profit, that it is all about money. LOL!!
I guess it is a sin for Pandora to want to turn a profit. Didn’t Bob know that Pandora gets its bandwidth for free from the Church of Internetology, and their staff of programmers do charity work and eat at the church for free after work? Turning a profit is BAD!!
Oh, those evil capitalists!

Seriously, the moronic mindset of the *free* internet is going to come to a screeching halt once everyone realizes that is costs a lot of MONEY to run websites like YouTube, Facebook, MySpace and a zillion other lesser known social network clones… none of which make a dime of profit a quarter and bleed millions of dollars of VC investment a year. Once all those companies run out of money and the Web 2.0 bubble bursts, people will wake up to find their dream of *free* vanished into thin air.
This is already happening overseas, as a few USA companies are cutting back on bandwidth expenditures and blocking users in Eastern Europe, Africa, China, etc. from using their *free* services.

3-Bob claims Pandora sucks because slacker.com is much better.
hmm i wonder how much is Bob getting paid to advertise the wonders of Coldplay, Nickelback and slacker.com every other day?

Tell us one more time Bob, if Pandora is such crap why does it have millions of users?
Is it because millions don’t know any better and they haven’t checked out your wonderful Pandora copycat slacker.com??
No, millions of people listen to Pandora because it fucking works, ok?
If Pandora was shit, nobody would listen to it.

Pandora will turn a profit next year, whether Bob likes it or not, and it will be internet radio business model to follow:
Pandora = free + commercials
Pandora One = commercial free with subscription
Get over it Bob.
(Disclosure: i have no financial investment in Pandora, Coldplay, Nickelback or any other type of sliced cheese)

There are not absolutes in this world.
Remember all of those who predicted the demise of the vinyl record? well, Best Buy is going to start selling vinyl records in 2009! Same thing with CDs, the decline of CDs sales will eventually slow down and level off, but they will not disappear.

The whole idea that *everyone* and their mother is going to listen to commercials along with their favorite music through Pandora and their iphone and stop buying music is silly. There are plenty of people out there who don’t want to listen to commercials, no matter how targeted, and want to be active participants and decide WHAT music they want to listen to and WHEN instead of being passive musical couch potatoes.

What will happen is the following:
1-Pandora (who will turn a profit next year, thanks to its iphone app) will dominate the music streaming landscape and will become the biggest COMMERCIAL radio station in the planet,

2-The music streaming competition (last.fm, etc) will have to adapt the same business model as Pandora (airing commercials) just to turn a profit and the competition will be fierce.

3-CDs, vinyl records and digital files will still be sold once people realize that pandora, last.fm etc. are nothing more than glorified computerized commercial radio stations and like their physical counterparts they will eventually have the same problems once the big labels start to put pressure and start demanding more money from streaming, start demanding more control over playlists etc.

4-The “free” music streaming model doesn’t work. MySpace is bleeding cash every quarter.If they don’t get a great deal from google when they resign their contract with them, they will start losing money.
Myspace membership is in decline and so are its advertising revenues. Pandora will survive because they will turn a profit the old fashion way: by becoming a commercial radio station. Every other player will eventually have to follow the same model or go under when their cash runs out and the VCs get tired of losing their money.

5-How about the Napster subscription model?
Once the big labels realize the future of music promotion lies in internet music streaming, they will lobby to pass laws to get substancial revenues from streaming. This will put tremendous pressure on all music streaming companies and will kill the subscription model.
For popular music, only the commercial streaming model will survive

If you want to see the future, just look at the past.
The invention of the radio didn’t put performance artists and musicians out of business, it just created more opportunities. Same thing with internet music streaming: it will not kill music ownership, just like FM radio didn’t kill vinyl sales.

P.S. Spotify is not available in the USA, and it has NO HOPE of ever turning a profit, unless they start following the Pandora model which is to air commercials. More here

See this related post can artists giving free music away ever make it?

Everyone knows the real bands are on indies. That’s commercial crap on the majors.

Yep, got that one right. Then a few minutes later, on another post, Bob spends 10000 words extolling the virtues of Coldplay’s free downloadeable live album. Like Coldplay needs any more free press!! their cheesy rock musak is already famous all around the world! (just ask Joe Satriani! LOL)
Instead of helping some unknown indie artist get some exposure, Bob has to sound like a paid advertisement for a major label.

Whose side are you on Bob?

well.. that’s obvious.. the guy used to be a big label lawyer.. what can we expect?? As much as the guy wants everyone to believe he is a critical outsider, he is part of the big label machinery like any of their other minions.

Coldplay? No thanks Bob, i will grab something else instead..

speaking of lawyers. here is the cover from that lawyer-loving band..Napalm Death. The groundbreaking album SCUM