Thai Teens Want Their Parents' Love... Or A Cell Phone

Why Would Satellite Radio Seek To Emulate Traditional Radio?

from the ads-from-above dept

Thu, Apr 13th 2006 9:42am — Joseph Weisenthal

Back in March, Clear Channel won an arbitration ruling allowing it to run ads on music stations it supplies to XM. XM made it clear at the time that they regretted the ruling, and had no plans to extend commercials to any of their core music channels. Still, BusinessWeek now speculates that the satellite radio operator is on the verge of adding commercials to more of its channels, making the keen observation that XM no longer uses the slogan "100% commercial free music". Think that could have anything to do with the Clear Channel ruling rather than being some hidden signal of a future strategy? It also quotes a Gartner analyst who expects satellite radio to evolve and become similar to terrestrial radio over the next 5-10 years, but the analyst gives no reason XM would voluntarily give up their key differentiating factor. Certainly, the terrestrial broadcasters would like to see it evolve this way, hence Clear Channel's desire to pollute XM's stations with commercials. There are still plenty of questions hanging over the satellite radio providers and their business models -- not the least of which the cost of running their satellites. But to think they'd so easily do away with one of their biggest competitive differentiators from terrestrial radio is short-sighted.

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38 Comments

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Aaron, 13 Apr 2006 @ 10:37am

Once upon a time the commercial-free aspect was a selling point for cable TV as well. Now there's no difference between broadcast networks and non-premium cable channels. Still, cable TV is doing pretty well.

If XM is going to go down the same route, though, they'll have to come up with exclusive content that people are willing to pay for. Music probably can't offer that. It's already all 'syndicated.'
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deep space 9mm, 13 Apr 2006 @ 10:51am

my name is El p, I produce and I rap too..
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Anonymous Coward, 13 Apr 2006 @ 11:00am

Re: exclusive content to sat-radio
supposedly Howard Stern was supposed to be "good" content exclusive to sat-radio, but from the sounds of it, not many people were willing to pay just to listen to Howard Stern's antics, even undisturbed by commercials, on sat-radio...
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MW, 13 Apr 2006 @ 11:13am

Re: And?
And your point is?
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James, 13 Apr 2006 @ 11:13am

The issue is that, if you have listened to terrestrial radio of late, all programming seems to be ads of some sort. At least with television, there is 17 minutes of programming for half-hour time slots. I purchased satellite radio after realizing that in my 20 minute commute to work, all of the airplay is commericals.
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m0rd3r, 13 Apr 2006 @ 11:14am

Clear Channel
I had been considering getting some form of satelite radio. Now that Clear Channel is involved with XM I know I wont be subscribing to that particular service. I have no doubt that over time Clear Channel will ruin XM and its only a matter of time before Sirius strikes a similar deal "to stay competetive."

Clear Channel ruins everything it touches. We used to have a really good Hard Rock radio station in my area till Clear Channel bought it and started playing repeats of the same crap every day. Then after ratings for the station plummeted (gee wonder why) they turned it into a latin mariachi station. Screw Clear Channel.
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Sirius listener, 13 Apr 2006 @ 11:15am

Re: Re: exclusive content to sat-radio
I think that 4 million new listeners signed up in less than 6 month is a pretty good indication that people are willing to pay for a "good" content.
I personally signed up for Howard Stern's antics.
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TK, 13 Apr 2006 @ 11:21am

clear channel invested
The reason this came about was because Clear Channel was an investor in XM early on when they thought satellite radio would be a niche thing, and not a competitor with Clear Channel. Part of this investment included the fact that Clear Channel was allowed to program some of XM's channels.

Now that XM is actually competing with Clear Channel for listeners, Clear Channel decided that they wanted the channels that they program for XM to now include commercials.

Since Clear Channel only programs like 5-10 music channels on XM, Clear Channel isn't making much money on this deal. They are doing it so that now XM can't claim to be 100% commercial free. Its almost like a sabotage type of thing. Clear Channel had been programming their XM channels commerical free since XM's inception, and now that XM is taking off, Clear Channel wants commercials now. Coincidence? I think not.

XM's slogan is now "Most Commerical Free Music Channels" on satellite radio.

I certianly hope that they are not moving away from commercial free, just taking a small step against their will.

I am a very happy XM radio subscriber for over 2 years. Check out Opie and Anthony XM 202.
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Anonymous Coward, 13 Apr 2006 @ 11:21am

Howard Sterns show is better than ever.

I have been a Howard fan for over 15 years and I can honestly say, this is BY FAR the best he has ever been. I totally LOVE his show on Sirius.

Regular radio is just horrible. I haven't listened to regular radio in over six months, not one time.

The $13 I spend each month on Sirius is the best $13 I have ever spent! I also had XM, what a joke XM is. XM is like regular radio only with a $13 fee lol.
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Me, 13 Apr 2006 @ 11:22am

Even if they go to commercials, its like cable, you buy cable to get more channels and get channels that aren't limited to censorship.

So if you have satalite radio then even if it has commercials you can still listen to many many more channels than I can recieve from local stations and it opens the doors for TiVO for Radio.
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Anonymous Coward, 13 Apr 2006 @ 11:22am

"Once upon a time the commercial-free aspect was a selling point for cable TV as well. Now there's no difference between broadcast networks and non-premium cable channels."

Cable was NEVER commercial free except for PBS programming. In fact cable television started out as a means of delivering better viewing of broadcast TV in areas with low quality signals or limited reception. Pre-cable (actually CATV), there were a lot of markets with only 2 or 3 viewable signals.

Commercial-free PAY channels (e.g. HBO, Showtime) came later, along with distant imports (WTBS Altanta, WGN Chicago, WOR and WNEW New York) and cable only channels like ESPN and CNN.

More choices was the prime selling point for cable, not commercial-free. (Cable also pre-dates affordable VHS tape players and Blockbuster type rental chains - HBO and Showtime helped cable grow.)

Can 2 pay radio networks survive? Not likely. One? Maybe. Satellite radio pre-dates the iPod and iPod ready car audio systems. Portable/user selected audio programming (including syndicated podcasts) will probably negate some of the value of satellite radio.

(37 years of dealing with this crap, er stuff, professionally. If nothing else, it's been an interesting ride.)
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Anonymous Coward, 13 Apr 2006 @ 11:24am

Re: Re: exclusive content to sat-radio
Yeah that must not be why Sirius had doubled to 4 million subscribers since Stern came aboard. Stern is not without commercials though. All Sirius talk stations have short commercial breaks usually once an hour. The music stations are all commercial free.
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sternsucks, 13 Apr 2006 @ 11:28am

4 million in 6 months???
hey last time i checked sirius didnt ADD 4 million users in 6 months... they just finally reached 4 million users - which is still a good 2 million behind xm. sounds like another person who believes in "howie math"
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Sirius listener, 13 Apr 2006 @ 11:36am

Re: 4 million in 6 months???
Tell me something... who's better than Howard Stern?
I wish that my 1 hour drive to work is longer!
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Pod Cast?, 13 Apr 2006 @ 11:37am

Re:
Sat radio will last with two providers. There content is far better than regular radio. Pod Casting? a recent study showed only 1% of geeks use post casts the suck. Funny how poeple who are actually talented like to get paid to broadcast.

I got sat radio for Howard, but love the rest of the programming. Discovery Radio is great. The commercial free radio is why I don't switch off the unit when I want to hear music.

Pod casts will never replace anything. They are too much a pain in the ass. IPODs are too much a pain in the ass. I don't want to spend hours placing and orginizing music. I would rather just turn on the radio and get all the content I could ever want. No download required.
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Rich, 13 Apr 2006 @ 11:54am

sirius / stern / commercials
The first week or so of Stern on sirius, there were no commercials. It was sort of annoying because there weren't any breaks but he would stop once an hour to play some songs (people do need to go to the bathroom, etc).

Now he has a few commercial breaks, and they are not intrusive like they were on regular radio. 6-7 years ago when I would drive to college class (about a 25 minute drive) there were mornings when nearly the entire car ride was commercials and nothing of Stern at all. It was ridiculous.

I'm happy to have Sirius.
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Anonymous Coward, 13 Apr 2006 @ 11:55am

Re: Re: 4 million in 6 months???
park car.
stay in car.
listen until you want to, then get out.
1 hour commute problem solved.
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jim, 13 Apr 2006 @ 11:56am

Re: Re: exclusive content to sat-radio
Stern is not commercial free. You pay extra and you still get ads.

this is just like cable. If you got good stuff people will pay for it. If not....
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4040, 13 Apr 2006 @ 11:57am

Old News...
Dude..this is old news and shouldn't even be something TechDirt would run. XM has already responded and stuffed it right in Clear Channel's face by launching 4 replacement channels to the ones CC wants their ads on it. http://www.orbitcast.com/archives/xm-satellite-radio-increases-channel-lineup-to-170-channels .html If that doesn't prove their point, check out today's news of them dropping CC from XM Canada... http://www.orbitcast.com/archives/xm-canada-dumps-clear-channel-content.html
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Anonymous Coward, 13 Apr 2006 @ 11:59am

" Tell me something... who's better than Howard Stern?"

Isaac Stern, Mike Stern and Leni Stern for starters.
Of course they're actual musicians not a blathering idiot...
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Dave, 13 Apr 2006 @ 12:02pm

Re:
I guess I am not old enough to remember the OnTV and the earliest of the cable days but they were shure as hell promoted as commerical free or containing many commercial free channels. As I grew up I remember agonizing as station after station started putting in commercials. Nickalodeon and Disney were some of the last.

But cable also had the good fortune of filling people's need for more TV. With MP3 players and a general decline in interest for radio I think XM and Sirius have to be much more careful.
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EW, 13 Apr 2006 @ 12:02pm

Commercials and Reception
I agree that cable TV was never intended to be commercial free. What I recall from my childhood living with only two or three channels that weren't always clear was wishing for more choices and consistent, clear reception. Do you remember Fox in its infancy? For us, it was a UHF channel, and we could never quite get a perfect picture. I suppose no commercials on cable TV would have been nice, but the thought never crossed my mind.

Now, I like the idea of having fewer or no commercials on satellite radio a great deal, and that's certainly a selling point, but I also like the idea of picking my favorite music genre and being able to listen to it all day with consistent, clear reception, even if I'm driving through the boondocks of Texas. I hate when I'm on a road trip surfing for a good song, and when I finally find it, it starts to fade out or get mixed with the broadcast of a local high school football game.

I don't have satellite radio yet, but I do have digital music on demand at home, which provides a similar music experience. More or less CD-quality sound through my stereo. No fading, no crackling (and yes, for now, no commercials).

I hope commercials don't come in and spoil the party, but if they do, there's still a lot to be said for the kind of reception available with this kind of technology.
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Sirius listener, 13 Apr 2006 @ 12:10pm

Re:
Mr. Coward,

What is the point getting personal?

To you Howard is an idiot, but to me (and 4 millions others) he is genius.
Just like Albert Einstein people like Howard are gift to all of us.

I'm not trying to change your mind and you will not be able to change mine, but hopefully some people will see my post and decide to try Sirius for themselves.

Thank you for reading.
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Pimpy, 13 Apr 2006 @ 12:19pm

Howard
Even if Howard brought 2 million paid subscribers, that's hardly anything to scoff at.
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Wolfger, 13 Apr 2006 @ 12:32pm

they oughtta....
Drop Clear Channel stations from the lineup. Problem solved.
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4040, 13 Apr 2006 @ 12:47pm

CC has been dropped
check my post (#19) people and read the thread before you make comments...
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pooopstainzmcgraw, 13 Apr 2006 @ 12:53pm

Re: they oughtta....
How about drop Clear Channel from everything? It takes so long for an alternative to spring up once one of these assmonkey companies takes over an entire medium. Why cant we just slay Clear Channel and ban uncool crap companies from ever returning. I have some others we can move on to from there...
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pooopstainzmcgraw, 13 Apr 2006 @ 12:59pm

Re: CC has been dropped
We saw that, we just like to bitch anyway. Cant you tell?
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Butthole Billy, 13 Apr 2006 @ 1:24pm

Music
I listen to Bob and Tom, I wish they had less commercials. Someone said something about there drive to work being nearly entirely commercials. This is true with Bob and Tom also. Anyway, fuck Disney.
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scott, 13 Apr 2006 @ 1:29pm

Hahahaha
It's best to get all of your business statistics on the satellite radio industry from the Howard Stern Show. Then you'll see that since his signing with Sirius, 100 billion people have subscribed to the service, commercial radio has died entirely, Sirius's stock has multiplied 7,000-fold, and XM has filed for bankruptcy. Stupid business decisions are what will kill satellite radio... like spending $100,000,000/yr on one nostalgic bs-artist used-to-be-funny bitter old man's radio show.
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Anonymous Coward, 13 Apr 2006 @ 3:19pm

wow, who is the bitter one?
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achacha, 13 Apr 2006 @ 3:21pm

Stern
It was not a bad decision at all to pay him 100$M/y. Since he came on he added at least 2 million listeners, that's 156$/y per listener and thsu Sirius is making 312$M just from the people that Stern brought over. Howard gets 1/3. You call that a bad deal? What business are you good at running?
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Angry Typing Guy, 13 Apr 2006 @ 6:51pm

better than howie? Opie and Anthony
Opie and Anthony are much, much better than Howard Stern. They still have the passion and the excitement left in them. And they will continue to work 5 days a week... Stern fans will soon be getting 4 days of Howard (as they have been off and on since he started, because he likes his Fridays off).

By the way, Howard went on for years and years about free speech and tried to be a martyr, but all the while he was censoring Opie and Anthony because he was afraid to compete with them. Howie admitted to all of this on Sean Hannity's show in March. My favorite quote from Howard in this interview was "I believe in censorship when it benefits me."

Read about it here: http://www.fmqb.com/Article.asp?id=186874

Opie and Anthony, 7-11 AM, XM channel 202
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Anonymous Coward, 13 Apr 2006 @ 7:55pm

Re: Re: 4 million in 6 months???
Well, who is better than Howard???

It used to be Opie and Anthony, but they got canned for being too over the top. I think the FCC had something to do with it too.

Man, I miss Whip-em-out Wednesdays (WOW), and Fear Factor Fridays.
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Anonymous Coward, 13 Apr 2006 @ 8:05pm

Re: Re: Re: 4 million in 6 months???
I recant... I did not know they were back on the radio!!! Opie and Anthony ROCK!!!

Time to change to XM...

In my town they got rid of all of the rock stations because the ignorant bible thumpers thought rock was satans work , but the ghetto music is still allowed... WTF!!!! What god would support bangers... friggen tools. besides, being ghetto apparenly makes more money here. Way to go SW Georgia. I'm moving back North!!!
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Bill, 15 Apr 2006 @ 9:49am

No commercials!
I'm an XM subscriber.

I didn't sign up and pay the monthly fee to listen to damned commercials.

Thought the CNN and news feeds would be commercial-free but they are not!

At least BBC International comes to us via XM commercial-free.

A subscription service should receive revenue from subscriptions, not advertisement too!
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TK, 16 Apr 2006 @ 2:06pm

Re: No commercials!
Um Bill, when they simulcast the TV feed from CNN and other news sources, how will they not have commercials? They have to have something in those time slots when TV goes to commercial. Are they supposed to have their own anchors show up and just talk while CNN goes to commercial?
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SJ, 9 May 2006 @ 10:44am

Re: No Commericals
I heard that cable and satellite TV just signed a contract, allowing commercial time to freeze the channel, forcing you to watch the commercials. (No more channel surfing). I have not seen the secret contract, so I have to speculate on this for now, but if cable and satellite TV could do this, then maybe soon satellite radio would soon follow. Who cares about Radio and TV programming, “Certainly, the terrestrial broadcasters would love to see it evolve.”
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