Tuesday, February 20, 2007

The Obligatory XM/Sirius Merger Post

So what's going to change for listeners if Sirius and XM merge? There will be a few more viable listening choices for those who already have satellite radio. The aggregation of programming might create a purchase tipping point for some current non-subscribers. Eventually some new programs will emerge as reasons to subscribe.

I don't see any of this as a significant threat to public radio. For the most part, our listeners don't consume media by the pound. They tend to be selective. XM's positioning statement "Everything All the Time" probably has little appeal to the bulk of public radio listeners. In a merged market, "More of Everything All the Time" isn't likely to change that.

The satellite radio business model, selling new radios and charging a subscription for each one, is a barrier to subscribing. A lot of public radio listeners won't go through that barrier just to get the few content options that are truly appealing.

The real threat, in my opinion, is when a single subscription to XM/Sirius will allow you to log on and listen through any Internet-connected device in your home, car, or office. The wireless web will unleash the true marketing power of the satellite content, particularly if listeners can select lower-cost packages to get just the programming they want.

Instead of "Everything All the Time" listeners will get "What I Want, Where I Want It." That day is still down the road apiece, but it will come. Public radio should start preparing for it now.

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7 Comments:

Blogger varresa said...

Hello!

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Renée Johnson
renee@varresa.org

9:11 PM  
Blogger Aaron Read said...

John, I think there will be an impact to public radio from a XM/Sirius merger...but it'll hit where it hurts most: the wallet.

Right now both XM and Sirius overpay ridiculously to get content on their systems. This includes to public radio content providers. I've heard of one provider that they make more off their satradio fees than they do off their AM/FM affiliate fees.

I think everyone knows that this gravy train can't last forever. But with a XM/Sirius merger...it'll end a lot faster.ct

10:59 AM  
Blogger RadioSutton said...

I happen to be in the minority opinion on the impact of satellite radio. I think we should embrace it, along with other technologies, and get our best content on it fast and in real time. I think we can grow the overall public radio pie to the benefit of all. It requires a change in our business model, mostly in how networks charge stations. But there is plenty of listening to go around. There's plenty of listener support and lots of UW dollars too. Getting requires taking bold steps with our core service, something most stations and the networks are reluctant to do.

11:19 AM  
Blogger Aaron Read said...

I dunno John. The kind of massive change in funding strategy you describe can't happen overnight. I'd think it would take years, with many fits & starts as stations gradually evolve into it.

Yet if pubradio is to take true advantage of satradio, it needs to do it yesterday; it can't wait several years.

Is there a way to reconcile those two factors?

12:33 PM  
Blogger RadioSutton said...

Sure. It's called shared short-term sacrifice for long-term mutual gain. Whenever the subject of change is discussed, every agrees on the mutual gain part. Who can argue with Win-Win? But you always have to give something to get something. No one wants to have that conversation.

Here's an example of what I mean. In exchange for being able to raise money directly from listeners through the mail, e-mail, and on-line, NPR virtually eliminates station dues and program fees. The math on this actually works. Everyone has more money to spend. The reason it doesn't move forward? Public radio's scarcity mentality. In an exploding media marketplace, the conventional wisdom in public radio is that there are enough listeners and there isn't enough money to go around. Our industry loses if that attitude prevails. It grows if we embrace the idea that we can win listeners and dollars in the chaos of a changing media environment. I believe we can.

12:54 PM  
Blogger RadioSutton said...

Above paragraph should have read "not enough listeners to go around..."

1:08 PM  
Blogger Aaron said...

What you describe sounds ideal, but it'll be bastardly difficult to implement. Where do I see the challenge? How much access to their local listeners do affiliate stations grant to NPR? There's a wide range of real effects behind the nebulous word "access".

This reminds me of the giant clusterf**k that ContentDepot has become. I believe it's ultimately going to be a much better system...but right now it's a nasty ugly process over a very long time that's making a lot of peoples' lives into hell. And EVERYONE has their own (different) opinion of how it should've been done.

Plus, what about stations that only air one NPR program, but air lots of PRI or APM programming? Or any mix of the three? What if they're just airing independent programming?

For that matter, what about shows produced independently or at member stations that depend on affiliate fees as part of their revenue structure?

These are all quasi-rhetorical questions to highlight a point: NPR is not a monolith. It's a loose confederation of dozens of interests - many of which are viciously competing with each other.

10:58 AM  

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