Wednesday, November 01, 2006

Satellite Now Standard

Recently, XM and Sirius have been seizing car manufacturers in their tire tracks to sign exclusive partnership contracts. Satellite radio providers have realized the massive potential in auto manufacturer partnerships, and are wedding themselves to as many as possible. The car is one of the most common, if not the most popular place for listening to the radio, and it presents major potential to any radio programmer. Since satellite radio has reached a plateau of subscriptions, it has become increasingly difficult for XM and Sirius to figure out how they can enlist more customers. Making satellite radio standard in vehicles is a start. Making satellite radio, a premium radio service, a standard in premium automobiles is pure genius.

Starting in 2007 is when you’re really going to see the change. Most agreements are for luxury cars to be introduced this year. The combination of satellite radio and high-end cars creates a harmonious synergy that screams high-class, and reeks of profits. It seems as if they were destined to be together. The idea stems from the same psychological influence on people that makes consumers pay $40 for ripped jeans. The mentality of, “Regular radio is for the average Joe and his average car. I am not the average Joe and my car isn’t average either. Therefore, I demand premium radio.” There’s also a bit of practicality to it, in that more financially secure people do not need commercials, they can afford to pay for radio that cuts ads, and they like playing with expensive toys like Porches and satellite radio. It’s really a perfect match.

XM started its search for auto partnerships with Acura. The car company announced it’s collaboration with XM in early September. Now XM has signed an exclusive contract with Porsche, stating XM is the sole provider of satellite radio for Porshce for the “long-term.” Closely following right behind was Sirius’ announcement of its own automotive partnership. However, Sirius kind of outdid XM on this one. Sirius, starting in 2007 will be the exclusive provider of satellite radio to BENTLEY!!! Though, I don’t know how successful satellite is with Bentley owners, they seem a little too upscale, even for satellite’s taste. Just in case, Sirius is also signed up with Volkswagon and Audi. Nonetheless, I’m starting to really see some innovative and creative business sense emerge from satellite.


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