A Comprehensive Study of the Satellite Radio Industry: :: essays research papers

INTRODUCTIONWould people be leave behinding to pay $12.50/calendar month for commercial free radio beamed right to their car or home. well up two companies and many big investors ar betting about $3 billion dollars that people are willing to do just that. In 1997, the Federal Communication Commission (FCC) granted a portion of the S-band spectrum for beam radio and two companies purchased use of these bands and started the only two companies competing in the artificial air radio business today, namely Sirius and XM. Analysts like William Kidd of CE Unterberg Towpin, predict air radio will generate about $10 billion a year in revenues by 2007 (McClean, 2001). However, to date neither of these companies has earned a dime. According to industry analyst though, its not whether satellite radio will take off-rather its a matter of how fast. (Helyar, 2004). Despite lofty predictions, satellite radio has some big issues to overcome before it becomes a honorable threat to the $19.6 b illion per year terrestrial radio industry.The article that appeared in Fortune entitled Radios Stern Challenge by John Helyar discusses Sirius market placeing strategy to not only take market share from the entrenched and free terrestrial radio industry tho also to beat its only competitor, XM. The Fortune article presents how a alter and lazy radio industry has failed to react to an eroding listening beastly and an increasing number of competing technologies. Issues like lack of attention to programming, no on-air talent, and an profit of 166% in the time devoted to commercials have driven listeners away from radio. Teens vulcanized 12-17 spend 11% slight time listening to radio compared to louvre years ago and adults 18-24 spend 13% less time compared to louver years ago (Helyar, 2004). The article further discusses that terrestrial radio has a good deal to fear from competing technologies like satellite radio, streaming digital radio on the Internet, and Apples iPod. W hat terrestrial radio does have in its advance is that its free compared to any of the current competing technologies like satellite radio. However, satellite radio is banking on a commercial free format to dislocate listeners away from terrestrial radio. Sirius offers 65 commercial free channels of medicinal drug and 55 news, sports and talk stations. And the one thing that satellite has over its less lofty competitor is that you cant loose the signal as you drive across America. The two major competitors for the satellite radio listeners are Sirius and XM.