Tuesday, April 05, 2005

Satellite Radio

Really good article by the New York Times (login req.) here. I have to say, I didn't realize how bad things had gotten in commerical radio until I read this:
"Infinity, like a number of radio chains, has changed some of its stations to the "Jack" format, a Canadian import that broadens the play list across rock genres. Instead of 300 or so songs, these stations' program directors are allowed more leeway in choosing from more than 1,200 songs."
First of all, GO CANADIAN IMPORTS!

Ahem. Secondly, WTF? They were programming entire stations based on a 300-song playlist? Suddenly, the success of Sirius and XM isn't too puzzling at all. I mean, my MP3 playlist is about 300 songs, and I have to continually add more to avoid fatigue. But that's probably only 20-30% of what I've got on my hard drive.

Another interesting tidbit was earlier in the article:
"Though satellite radio is still an unprofitable blip in the radio universe, it is pushing commercial radio to change its sound. Broadcasters are cutting commercials, adding hundreds of songs to once-rigid playlists, introducing new formats and beefing up their Internet offerings. A long-awaited move to digital radio could give existing stations as many as five signals each, with which they could introduce their own subscription services - but with a local flavor that satellite is hard pressed to match."
This is why anyone who thinks that satellite radio can "kill" conventional radio is kidding themselves. There was a similar dynamic in the mid-20th century between early satellites and trans-atlantic cables. A lot of people thought that satellites would make cable obsolete, but cable was still cheap, and the competition from satellites drove cable operators to become much more efficient.

Of course, it's hard to force innovation in an industry without a competitive outside threat. There was a similar move earlier in the 1990s to introduce a digital radio format (DAB) to radio, but it stalled out because there was no demand. Now, with satellite radio, the industry will probably be pushing it rather than the government. My personal preference would be to get rid of station-specific spectrum allocation, but that doesn't seem likely in the US. Hopefully in Canada, rather than give incumbents five more stations, we could get away with opening up the spectrum to new competition. That would require pretty strong anti-monopoly laws, as well - not sure how likely it is, but it's certainly preferable to the US experience, where Clear Channel owns half the stations in America.

Finally, note that the quote seems to imply that even commercial radio may eventually move to a subscription-based service. I don't think that this would be complete, but it could be a very good thing for the audience - HBO has been leading the Emmy nominations for the last few years because it doesn't have to worry about the daily ratings game, so can afford to be more inventive (Sex and the City, Sopranos, Oz, Six Feet Under, etc etc etc.) The problem of course is that not everyone can afford subscribing to every station they listen to - so some package service would be necessary. Anyway, I would hope that regardless of the subscriptions, the CBC would maintain several free stations for the general public. Also, I want my mp3 player to be able to record radio signals. But we'll have to see about that last one...

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