It was just announced today that Sirius XM, the new hybrid satellite radio station, has lost another 400,000 subscribers in the last month and because of this and many other issues is reporting huge losses. Is this really a surprise to anyone? Can we really be shocked that a service we all expect to pay nothing for is struggling to make ends meet?
I believe radio itself is dying, and just like the newspaper business, it is losing the battle to technology. In the end satellite radio tried to be something very different and it wasn't required. No one was asking for it and that is one of the biggest reasons the business is failing.
Another point about the service is that the sound quality isn't any better than FM. For those that have never heard sat radio you might be surprised to hear this. But it's true; the sound quality is light years away from that found on CD's or MP3's. For many of us that enjoy listening to music, the quality of the sound ends up being near the top of the list when it comes to the overall experience. Second has to be selection and even though sat radio has lots of channels I often find that there is nothing to listen to. We live in a world where we expect things to happen instantly and an MP3 player, whether it's one built into your phone or a separate unit, satisfies that need.
There is also the emerging world of cloud computing and within that cloud will emerge music streaming sites and services. In fact many already exist. Basically, instead of having all of your music sitting on a hard drive, you can have access to that hard drive through a WI-FI or 3G network. In the not too distant future you will have all of your music sitting in the cloud and for those tunes that you don't own a copy of it will simply stream from a music site.
Imagine having access every song ever written available at anytime you want! This is happening as we speak and offers another reason why sat radio is failing and will ultimately not succeed.
As for traditional radio stations, if it isn’t a local talk radio station I don't think any radio station has a hope of surviving in the next 10 years. This form of media is dying and anyone involved needs to be well prepared for this change. The internet has given us instant access to all of the world's information and that includes the news, music, video, the list goes on.
So to the investment firm that recently loaned XM Sirius 400 million dollars might as well talk with their accountants and figure out in which year it would be best to realize this loss.
