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Sirius/XM flawed business model...

H

headlandradio

Frankly, I don't understand why they require paid subscribers. I get that they want to be commercial free, but I believe that if they just sold satellite radios at a low price and offered the service free and sold ads they would make far more money.

By doing this they would become far more ubiquitous and be a replacement for terrestrial radio in many ways.

I think the commercial free aspect is overrated and I believe that by holding on to it they are competing with the wrong people. They will never be able to beat Pandora at Pandora's game. They could however basically "take down" terrestrial radio. As it is they are making people pay for something that isn't as personal as Pandora and the like, and not much better than regular radio.

The money is in advertising, not subscriptions. Offer something that has great variety and can be listened to anywhere, but doesn't cost the listener anything and far more people will be tuned in.

They should change the name to just XM, with the idea being that it is the replacement for FM and AM. Do this, offer the channels free and XM will be the new FM. People will get into their cars and could listen to AM, FM or XM. because of the variety and the ability to listen to your favorite stations anywhere most people would problem be tuned in somewhere on the XM dial. The beauty of it is that no matter what XM channel they are listening to, they are still listening to XM a point that would be very attractive to advertisers.

I just believe that they focused on the wrong thing, for them it should be about being ubiquitous, not on not playing commercials.
 
Whoa. Slow down. Here are some random points in reply:
1) First, the existing business model was developed at the end of the 90s when Internet streaming was in its infancy and streaming to hand-held/mobile devices seemed like future fantasy.
2) Commercial free music was essential to the business model. Who'd invest in new equipment to get what they already get -- especially 7 minute stopsets? For me, getting away from those was worth $13/month. Second, the variety of music available on satrad, versus terrestrial radio, is worth paying for. Despite all the bitching on these boards about how a handful of cume formats on satrad have playlists comparable to commercial FM, most of the satrad stations go far deeper. I love Deep Tracks, The Loft and a number of other channels that have no counterpart on FM. I hate commercials! And if SiriusXM were to go to a commercial driven model tomorrow, I'd drop it. I can stream a bunch of great commercial stations from around the country without the Sirius hardware. I would argue that in a world where any station anywhere can be streamed, the commercial free aspect of Sirius is even more essential in setting it apart from the rest.
3) Comparing SiriusXM to Pandora is like comparing apples and oranges. I have tried Pandora several times and I am completely unimpressed. It repeated some songs from session to session, and offered a very homogenized music mix no matter how many times I tweaked it. SiriusXM programming (at least on my favorite stations) is more alive, plus it is PASSIVE -- I don't have to think about how to program it, I just turn it on to a channel. That's deliciously easy -- especially in the car.
4) Streaming technology in the car is more problematic than satellite delivery. I have far more buffering drop outs when I stream in my car than sat drop outs. Very frustrating.
 
Ever since the merger, they've thrown away a lot of their music playlists in favor of "IHeartRadio" type playlists, like most of the radio stations in the nation today. They're just another "jukebox." :mad:
 
Not true for decades stations or classic soul. Playlists for these channels are far larger than terrestrial radio. Take your local am/fm oldies station (if you still even have one), they play maybe 300-500 oldies. Now take the 50s, 60's and 70s decades on SiriusXM, the total playlist exceeds 3500 hits!! Soul Town and The Groove play more than 2500 classic soul hits of the 60s , 70s and 80s. Show me a terrestrial station that does that. SiriusXM has room for improvement (who doesn't?) but they are far better that the cookie cutter, small playlist offerings in AM/FM land, they are nothing like CC or large corp programming.
 
SiriusXM does not make the radios, they are made and in most cases sold by a third party. So charging only for the radios and not for the programming would result in little if any income for SXM.
 
kc1ih said:
SiriusXM does not make the radios, they are made and in most cases sold by a third party. So charging only for the radios and not for the programming would result in little if any income for SXM.
Click to expand...

Income could come from advertising. And in response to another poster people would buy the new equipment because it would give them access to an incredible variety of stations. Why deal with over half of new car owners canceling after their free trial because they don't want to pay, when you could just continue to give them the programming free. If you do that you will have them forever, they will never leave the variety of Sirius/XM to go back to their FM dial. And you could forever make money off them by playing them ads to them. I am stating that Sirius/XM should seek to replace FM radio not simply be an option other than. The money is in advertising, not subscriptions.

FM can compete now because they are the only ones offering the service for free. If Sirius were to also offer theirs free they would eliminate the only advantage terrestrial radio has, and would become their replacement. Again there is much more money to be made in advertising.

BTW 7 minute stop sets would be dumb, but given the large audiences on Satellite radio you could play less ads for more money. IMO Sirius/XM has about reached the limit of people willing to pay for their service other free options are becoming more and more numerous. They need to change their game plan.
 
IF they were both given double their bandwidth like they both (XM & Siri) originally asked for, they could have maintained a more "CD-quality" audio instead of MP3 crud audio; regardless, if they had more bandwidth, with the merger, one thought would have been to make one an advertiser-supported free service, and the other premium commercial free, but neither appears possible.
The 'mandatory channels' required by the merger were required to be offered for FREE to all subs, but somehow that slipped thru the cracks after the agreement was reached with the FCC.
 
Why can't Burger King give away their sandwhiches for free. Just think of how many people go to other places because they don't want to have to pay just to have lunch. Can't they just put more signs on the walls? What if gasoline stations gave regular away for free knowing that for a few extra cents, many people who would not have come there will upgrade to premiun? These are all business models that we would like YOU to explore, maybe in your line of work.
 
Back when it first came out, it was a novelty. People did feel that it was worth paying for. At one point, Sirius and XM were about to go bankrupt, so they merged. Now they're profitable. There's no point fixing what ain't broke.

But I'd think having 2 tiers of service is great. The free tier would be ad-supported and have a limited amount of channels. The paid tier would have all the channels and no commercials.

When integrated Internet radios become standard in cars, Sirius XM will lose customers because people will stream Internet stations for free.

We all know how successful HD radio is. They can't even sell ads on the HD2s that are simulcasted nationwide and streamed on iHeartRadio.
 
Nick said:
When integrated Internet radios become standard in cars, Sirius XM will lose customers because people will stream Internet stations for free.
Click to expand...

What makes you think it will be free? You’re not gonna get mobile internet access for nothing.
 
They do sell advertising, on their talk channels. They also make a boatload of money off of their subscription service, so I don't see the "fail" here. HBO is a subscription service with no commercials. They do pretty damn well. In fact, cable companies make the bulk of their money from subscription fees. The advertising is gravy.

You use Pandora as an example, but they also run advertising, and have as yet, failed to make a profit.
 
kc1ih said:
Nick said:
When integrated Internet radios become standard in cars, Sirius XM will lose customers because people will stream Internet stations for free.
Click to expand...

What makes you think it will be free? You’re not gonna get mobile internet access for nothing.
Click to expand...


I'm not gonna say it is free, but for me it is like it is free. I had XM for 5 or 6 years. I just stopped it and only stream from my phone which I had before I dropped XM so I just lost an xtra bill because i can stream the same music through my phone... ;D
 
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