Submitted by acohill on Wed, 02/27/2008 - 09:17
According to this report, the merger of XM and Sirius has stalled, a year after the deal was first announced. It is a perfect storm because you have a combination of FCC confusion, Congressional confusion, silly prices paid for on-air talent, and a bad business model.
It is a lesson for terrestrial broadband and communities as well, because most of the same problems and lessons apply in community telecom, where we also have the wrong business models, lack of clarity at the Federal level about what to do, and prices for services that are out of whack.
In the satellite market, it is hard to understand how Sirius would ink a $500 million dollar five year deal for foul-mouthed Howard Stern when the company is only getting about $35 million a year in ad revenue, along with anemic subscription sales.
What would make sense, as part of the merger, would be for XM and Sirius to go to an open content model, in which they become just the carrier, and let anyone with the money buy channel space on their satellites. Right now, the two companies are flogging the same old, tired business model used by the cable companies, which is to bundle hundreds of channels together, most of which no one listens to.
It would make more sense to charge $1 a month per channel and let subscribers pick which channels they want to listen to, with something like a ten or fifteen channel minimum.
The FCC and Congress could help out by promoting this as an option, just as they could help out communities by promoting open, multi-service networks like nDanville, which is the country's first municipal open, multi-service network. Service providers from all over the country are starting to call the City to find out how to put their services on the network.
Satellite radio has a bright future, but only if the old business models are tossed and a new, "open" model is adopted.
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