Serious Problems

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The recent SIRIUS/XM merger hasn’t appeared to help the struggling satellite provider in the short term, with over a billion dollars in debt due in 2009. The company touts its 17% annual growth rate in subscribers as an indication there’s a light at the end of the tunnel. But other changes may not bode well for the satellite giant.

I was a satisfied SIRIUS subscriber up until about a month ago, when all of a sudden my favorite music channels were no longer available. As part of the merger, SIRIUS/XM re-structured the channels, combining what they thought were the best aspects of both companies into common offerings. Now, instead of my favorite music, I’m getting music I don’t like, punctuated with the worst jock chatter I’ve ever heard.

Sitting through a song or two that are not favorites is no big deal. But one of the reasons I subscribed to satellite was to eliminate the unnecessary talk. Now, the talk is back—and I’m paying for it!

Was paying for it. I canceled my subscription in early December.

Certainly, terrestrial radio is over-commercialized and it will continue to be so for the forseeable future. The economic downturn has seen to that. But commercials don’t have to be negative for listeners. Clever, well-written Radio ads can be informative and compelling. It’s only because copywriters don’t have enough information or aren’t inspired enough to create superior ads that has caused advertising to become a “dirty word”.

But this rant is about satellite. I believe SIRIUS/XM’s business model is unsustainable. They will eventually have to include some paid advertising on their channels in order to make ends meet (more than the limited ads on just a few channels they are doing now).

Meanwhile, if you haven’t checked out Pandora, the free service where you can design your own internet station, you’re missing something. This is the future of Internet radio and, as Internet streaming to cars becomes more pronounced, of greater concern to terrestrial Radio than satellite. Free and no commercials (for now). It’s tough to beat.