Thursday, October 26, 2006

Time to Step it Up

So every week I am challenged with the task of finding new and cutting edge stories about satellite radio to comment on. However, every week it seems to be such a struggle to find information about what is going on behind the scenes at XM, Sirius and the satellite world in general. I blame much of this on both XM and Sirius for having deplorable customer and media relations section on their websites. I don’t think XM or Sirius even have a “press” or “news” section, and if they do good luck finding it. Each service offers a newsletter (XM / Sirius), but in my humble opinion they are just gimmicks to steal your email address. The majority of “news” that you receive in the newsletter is just promotions for new satellite hardware, and there is minimal content related to future programming and satellite events. The newsletter is simply a weak attempt at creating an exclusive connection with listeners, and it’s time to raise the bar to 2006 standards.

In a market that is headed towards building customer and interpersonal relationships, I would think that either of the two satellite giants would have already considered more effective methods of disseminating information about their product and service. What business doesn’t have a “recent news” page, or easily noticeable press section of their website? Blogs are built upon consumer feedback about fresh content from a company or source. High-traffic blogs have proven to persuade companies in far greater ways than focus groups and customer satisfaction surveys ever had. But when that fresh content is not available for the masses to even analyze, how great of a loss is that to the company? I can honestly say that I find more information about XM and Sirius on Orbitcast, than I do on the actual company websites.

I would like to see the satellite world step up its game and get with the program. Satellite is new, it is promising and it has potential. The satellite world needs to be hyped a lot more than has been, and new information about the service/product should be everywhere.

Bottom line, the industry needs to give people something to talk about, something to fuel the buzz with, and it has failed to really do so lately. In order to truly win this audio battle, the industry needs to secure people’s confident investment in satellite technology and divert them from the competition. In order to do this, XM and Sirius need to approach the market on a new level.

It’s simple, really. Stop riding the money train, XM and Sirius and start telling me what I want and what I need to hear.

Monday, October 23, 2006

Relationship Radio

I think it is finally time to give a compliment to the satellite radio world. Specifically I want to recognize XM for at least trying to give me my money’s worth this week. Listening to my favorite station, Lucy on XM I am constantly entertained by the creativity XM exerts. As every radio station knows, the FCC requires that you identify the station at some point throughout each hour. However, just because the FCC mandates something, doesn’t mean you can’t have some fun doing it. Most stations do some type of fancy audio production that makes their station sound cool, and listeners don’t even realize they just heard a station ID. Satellite radio content is not regulated by the FCC, however, XM still makes an effort to connect with the listener on a personal level through channel ID’s each hour.

It seems as if XM went and personified each of its music channels to match the personalities of the people who generally listen to the channel. For example, XM recognized there is an interest in alternative rock, it created an alternative rock channel named “Lucy,” and assigned it a personality that reflects the lifestyle of an alternative rock listener. The channel’s personality comes out between song sets, incorporating little comedic tidbits that identify the channel. The listener is fed humor and stories that he/she would appreciate, and is able to connect with the service he/she is paying for on a more personal level.

One of the phrases often used for a channel ID is, “Lucy, alternative rock hits from when you were an employee at a lonely rental store dreaming about making big-time movies, all the way until you were the manager of a lonely rental store dreaming about making big-time movies.” What I think is even more hilarious is that XM creates phony wars between the listeners of its own channels. For instance, another XM channel with content similar to Lucy is the XM channel, Fred. XM cleverly created a fake rivalry between Lucy and Fred listeners by airing promotions like, “Lucy. It’s like Fred, without all the STD’s” in between songs. There’s also another promo that runs on Lucy mocking senders of pyramid scheme and Nigerian scam emails, urging them to send more information to The promos seem to never repeat and always keep me anticipating the next one. It makes me feel like Lucy knows me, it connects with me the customer, and it makes me feel even better about the service I’m receiving. This is a goal any business would love to achieve, and I believe XM already has.

It is all just proof that with a little bit of creativity, it is possible to survive in a world without commercials. Which is supposedly the definition of satellite, pay-for-service radio.

Saturday, October 21, 2006

A Touchdown for Sirius

So I was ingesting my weekly dose of college football, watching the Notre Dame / UCLA game when my fanatic attention was caught by Sirius Satellite radio. In a movie trailer fashion, Sirius hyped its upcoming free trial period that will take place online October 25-26. The first commercial to air in the game, the spot focused around the Howard Stern show and how “he left regular radio” and “millions followed him.” The spot ends with the call to action, “find out why” followed by information on how to listen this week. As the game progressed, the frequency of the ad only seemed to increase, creating more anticipation in my mind. In fact, I intentionally watched the ad more than once to get the dates of the free trial, because the commercial flashed them up so fast. I don’t know if that was Sirius’ intention, but the reach of the ad increased as a result.

During his years of terrestrial radio, I admit I listened to Howard every now and then. Never did I imagine, though, that people would go out and buy satellite radio gear and Sirius subscriptions just to follow the king of all media in his crusade against the FCC. Sirius claims that millions did. Whether they did or not is irrelevant. What is important to note is that all those curious about Howard Stern or satellite radio in general now have the opportunity to experience them for free.

This is huge. Though I already have XM, you can bet that I will be experiencing a free trial of Howard Stern on October 25th. It probably won’t be that great of a show, but I’m going to do it anyway. I have to say, in addition to showing the ad numerous times throughout the game, they also sponsored the entire football game, prompting the announcers to mention “This game is brought to you by Sirius Satellite radio” between every commercial set and first down. Sirius already airs college football games every Saturday as part of its unique programming, though, ironically that aspect was not advertised once throughout the game. If the commercial didn’t drive Sirius into your mind, the announcers talking about it every five minutes did. And just to put the icing on the cake, the entire Notre Dame coaching staff sported the Sirius satellite radio logo on their headsets the entire game.

Sirius really demonstrated a strong ability to integrate media and marketing messages in this stunt. Usinig television spots, announcers, coaching staff and their own unique coverage of collegiate football, the radio company created a synergy of communication. Football is an opportune time to advertise Sirius’ website and to get people thinking about the product, because there is a lot of down time throughout the game like during the half-time show and segues in and out of commercials.

Two of the biggest aspects of Sirius, college football and Howard stern were promoted simultaneously during this game, and will surely be one thing that sticks in viewers’ minds after the game. In fact, after I finish this blog, I’m heading to Sirius’ website to check this whole thing out. Their aggressive efforts today really made me want to find out more about their product. Good job Sirius.

By the way, Notre Dame won 21-17. Go Irish!

XM, Sirius, Apple…wait! Apple?

Despite the huge success of the Apple iPod, the mp3 player market still struggles with the competition of the music alternative, satellite radio. However, in some cases the old saying “If you can’t beat ‘em, join ‘em” provides healthy and often lucrative advice. I believe future integration of the two digital worlds will be the prosperous solution to the mp3/satellite battle.

Satellite radio and mp3 players are like in-laws at Thanksgiving dinner; they’re from two different worlds and all they do is compare themselves to each other. There are definitely advantages to both formats, however, the idea of combining the two just hasn’t taken off yet. Well, leave it to Apple to take an undeveloped idea and market the bananas out of it. Reading an Apple press release one day about the integration of the iPod, iTunes 7 and movie content, the idea of combining satellite radio with the iPod immediately entered my head. True, XM has already tried this concept by including an mp3 player in their new portable receivers, but they haven’t been able to do it like Apple potentially could. If there’s one thing Steve Jobs and the Apple gang know how to do, it’s creating effective guerilla and buzz marketing campaigns. Why else would the majority of Americans pay $400 to walk around with white things sticking out of their ears?

It only makes sense. It only makes logical sense that Apple or any mp3 manufacturer try to partner with the satellite world, integrating the most successful companies into one solid product/service. I would recommend Apple join forces with XM satellite radio. This would be huge for both companies, combining the leading satellite provider with the leading mp3 manufacturer. XM is looking to expand its subscription base, and Apple is looking to incorporate the next biggest thing into its iPod. Having the entire audio world at your fingertips is very exciting and enticing. With the click of a mousewheel, you could get music, movies, and even satellite radio. Putting receivers in iPods, or even offering iTunes in XM’s portable units will no doubt increase the ubiquity of iPods and XM users.

Merging may be a lucrative and cool concept, but I like risk and adventure a tad more. I say it’s a no brainer that Apple should have a quick chat with XM or Sirius to discuss future possibilites. However, what would be even more exciting?...Apple Satellite. If Apple really wants to step up its game and become an unprecedented authority in audio, it needs to take a risk. Judging by the success of iTunes, I see Apple Satellite Radio being a revolutionary and viable option for the company. Knowing Apple, its satellite service would cost customers less than XM or Sirius, it would offer more content than either XM or Sirius, and it would introduce the world to satellite radio overnight. Very cool.

Saturday, October 14, 2006

Thinking outside of the alarm clock.

Nationwide and around the world, terrestrial radio stations are starting to acknowledge their fears of satellite radio. Satellite is so versatile, offering much more content than regular or HD radio, which can be accessed nationwide with crystal clear reception. With XM and Sirius being such strong forces, one might wonder which direction satellite must take in order to not sink to the bottom of the media ocean.

Mark Ramsey, President of hear2.0, The Audio Entertainment Strategy Company, provides an extensive overview and much insight into the future of terrestrial and satellite radio. Specifically Mark explains how traditional radio is affected by alternatives such as iPod’s and satellite radio, and how the consumer market is rapidly changing its demands and expectations for audio content. Mark starts the presentation by explaining that generally, the radio industry is at the mercy of those who possess the following expectations: free content, controllable content, dynamic and fresh content, commercial-free content. Mark shows that mp3 players and newer, alternative audio technologies now meet all these expectations and have promising potential as shown by the high recent sales of iPods/mp3 players. This poses a major threat to the radio industry in general, leaving more than just terrestrial in a panic.

Satellite has somewhat of a major competitive advantage over terrestrial because it is commercial free, or at least the music is, and because it has a vast selection of content. However, Mark stresses that satellite does not provide the content control mp3 players do. He also highlights that satellite is at a disadvantage because it is not localized, a feature many enjoy. He admits that what satellite does offer is entertainment value. With such powerful talent as Howard Stern (Sirius) and Opie & Anthony (XM), satellite provides a highly marketable incentive over traditional and HD radio.

Things like price, feasibility and operating ease were also major factors in deciding to go digital, satellite or traditional. Most people surveyed by Mark stated that they would get an mp3 player or satellite if it were easy to use and/or free. Mark decided to consult the famous digital media and marketing guru, Seth Godin about the future of radio. Seth responded by saying, “It’s a challenge to build non-radio links to listeners. How do I deliver multimedia to local users, which can give me a headstart over satellite and online.”

Keeping with Mark’s Statement of “People don’t buy radios, they buy what’s on the radio,” it is clear that satellite radio needs to continue providing specialized and unique content in order to remain a major competitor in radio. If people are willing to buy the entire satellite package just to hear Howard Stern, then the focus of the industry needs to become quality over quantity in order to gain customers. People like free content, and they don’t like fixing things that aren’t broken. Regular radio is still free, easy, and ubiquitous, and has satisfied for decades. Satellite is $12.99 a month, requires special setup and has been reaching a subscription plateau recently. For as much discussion as there is about “radio being dead,” it has certainly taken the forefront of business and consumer minds recently, proving it is here to stay.

Satellite Sellouts

Satellite radio customers may realize that there are more and more advertisements being aired lately. However, it is not an illusion nor a coincidence that this is happening. In fact, satellite radio companies like XM and Sirius are now starting to be invited to radio up-fronts by prospective advertisers everywhere. Upfronts are meetings with advertising clients in which the advertiser can buy media from the provider (i.e. XM) on the spot. In a growing trend, more terrestrial advertisers are starting to budget money for satellite and internet radio. Pfizer, Geico, Procter & Gamble, Walgreens and Home Depot have all noticed expressed profound interest in satellite and online radio advertising lately.

This may not be news to satellite subscribers, though. Sirius and XM already cram underwriting into every crevice and break they can on shows like Howard Stern and Opie and Anthony. XM's advertising sales have exceeded $30 million to date, and that's up from the $20 million in all of 2005. "We’re anticipating a much higher sellout than last year, similar to traditional networks' 30 to 40 percent," said D. Scott Karnedy, Senior VP of Sales/Marketing solutions for XM. Some advertisers are spending as much as 10 percent of their radio budget on Internet and satellite radio, an increase from 5 percent last year. It’s a shame that this is happening, considering the whole concept of satellite radio is being commercial-free. Promotional advertisements do not belong in satellite radio, and they only compromise the integrity of the program provider and the participating artists. It is ridiculous that XM and Sirius are starting to get away with this. However, once again it all comes down to money and greed, as the music industry is still not satisfied with its billion dollar annual profits. They just have to have more, and they will get it by any means necessary.

The idea of satellite radio advertising is both frustrating and ironic. Customers have actually sued Sirius for its overzealous attitude towards advertising on a “commercial-free” medium. Indeed it may be satellites’ social responsibility to not act in such a selfish matter, but consumers are just hurting themselves. Just like cable television, satellite radio will eventually become one big advertisement that consumers will pay outrageous rates to hear and see. How does this make sense? It doesn’t.

Basically, it comes down to the fact that the satellite radio industry has consumers by the throat. Consumers are often put in the position of either “paying higher subscription rates” to eliminate the need for advertising, or let advertisers slowly infiltrate content like a virus in order to “keep prices down.” Since we live in such a capitalist world, the almighty dollar usually has the final say in these decisions. Most consumers are willing to allow a couple ads to be aired, versus having to pay an increased rate. The idea of rates soaring because advertising is not present is a major industry bluff, but nonetheless advertising always wins. It is a perfect example of how powerful marketing can be.

Ultimately, the best marketing defense is a good offense. While satellite radio increases its advertising placements, terrestrial radio is cutting back in order to maintain fierce competition. If satellite is not careful, terrestrial radio giants like Free FM and HD radio will steal their market share slowly but surely.

Sunday, October 08, 2006

The Odd Couple

This past Wednesday, October 4th marked a major milestone in the satellite radio world. It represented the two-year anniversary of shock jock radio show hosts Opie and Anthony being on XM satellite radio. The O&A show was the first major radio program to make the switch from terrestrial to satellite so successfully. Opie and Anthony created high demand for XM radio as soon as they started broadcasting, and have built an empire in the digital radio world. Opie and Anthony showed to the world that satellite was possible, and that FCC regulations no longer had a stronghold on explicit content. Sirius soon followed in XM’s steps by forming a strategic contract with the “King of all Media,” Howard Stern. Thus showing that the future path of radio will be much like the path television has already taken. People will be more and more willing to pay for premium, unregulated content if available, and will revert to free broadcasts on a limited basis in the future.

What’s significant about XM and Opie and Anthony’s situation is that the two have successfully integrated competing worlds on a massive level. XM satellite radio has released its pride and joy, Opie and Anthony, to the terrestrial world indefinitely. Somehow, some way XM has figured out how to get people to pay satellite subscription prices for a program that is now simulcast on FM radio (CBS) for free. This concept may seem ludicrous at first, but so far CBS radio and XM have not reported any dilemmas or losses directly related to the collaboration.

Could the archenemy of terrestrial radio be the very thing that rescues it from obsolescence? There is much talk of radio “being dead,” however, XM has figured out how to increase terrestrial ratings while maintaining its own customers at the same time. This was made possible by creating a strategic synergy between the two communications giants. Logically, it makes no sense. Logistically, it is even worse of a nightmare. However, economically it is beyond genius. XM has built enormous brand equity with not only O&A, but itself. XM has converted this brand equity into money by teaming with CBS, and CBS has converted XM’s success into its own fortune. What was previously inconceivable has now happened. Two highly competitive adversaries have made harmonious peace, and as a team their potential is ridiculously promising.

Friday, October 06, 2006

Preaching Portability

Delphi recently introduced the third generation of its SkyFi satellite radio receiver to the world. The race for portability in the satellite radio industry is heated, as personal entertainment products like the iPod continue to present a competitive threat to companies like XM and Sirius radio. Greater battery life, more music variety and better features are all part of the marketing and sales mix. Whereas the iPod is strictly an mp3 player, other mp3 format players that include FM radios, longer battery life and in-line recording still remain second to the almighty Apple. However, Delphi and XM satellite radio have paired up to provide listeners with a competitive product, that will surely nudge the iPod off Christmas lists this year.

The Delphi SkyFi3 has many innovative features in it, making it their most compatible player yet. In addition to an FM transmitter that allows you to play XM radio through a car’s speakers, it also includes an auxillary jack to connect external audio sources (like an mp3 player) and play it through your car speakers. The new player has an extra large screen, and a thirty-second buffer feature that allows you to pause, rewind and replay live broadcasts. It’s almost like the TiVo of satellite radio with this feature, helping users to never miss a beat. Like previous receivers, it has a recording capability allowing it to record up to ten hours of XM programming for future listening. This is a feature that was under much scrutiny lately by the record industry for copyright infringement. Nonetheless XM won the battle and is now permitted to exploit the feature in its products.

The main innovation of this product, however, is that it has fused the digital worlds of mp3 and satellite. With the secure disk SD memory card expansion card slot, the new SkyFi3 allows users to theoretically store an unlimited amount of mp3’s on the device. If users become tired of satellite programming, a personal playlist is now only a click away. The entire system is plug-and-play, and requires very little effort to set up. Delphi even provides the setup guide online so you can see for yourself how easy and simple it is. Check it out! For added reassurance, there’s even a nifty chart on the Delphi website that compares the SkyFi3's features to Sirius’ players and services.

With any number of accessoriesthis product can quickly transform in minutes from a personal player, to car audio system, to home boombox. This is really the direction that the portable entertainment industry is going. Personal entertainment focuses now more than ever on universality, feasibility, variety, and customizability. Users want on-demand content that is personalized, but also want to hear new, different content when their personal collection gets stale. I personally have over 115 gigs of music on my hard drive….that’s almost a year of music. However, I actually get tired of my own music every now and then, and then want to hear someone else’s DJing abiliites. That's where the SkyFi3 comes in.Despite my hardest efforts to obtain every song in the world that I like, I have not been successful. Satellite radio often gap fills for what is missing in my personal collection, and often allows me to just let the music roll and not have to worry about selecting content to play. Having a player that combines the best of both worlds is a phenomenal idea to me, it just had to be refined a little more before I bought one. The SkyFi3 seems to have the solution to musical boredom, and will set the standard for similar products to come.