Personal Portable Satellite Radios

By: Jason Ciment

What follows in a review of satellite radio blog postings from http://www.jasonciment.com/sirius_satelliteradio_xm/ that have been written mostly about the new Sirius Stiletto 100 portable personal satellite radio just recently launched in Octover 2006. This article covers the history of satellite radios and the evolution of both XM satellite radio and Sirius satellite radio so that consumers can make more informed decisions.

The History Of Portable Satellite Radios

The gestation of Satellite radio goes back to 1992. The history of portable satellite radios is short compared to what is now known as terrestrial radio, but it has rapidly changed the face of what used to be called the world of "transistor" radios. There are 2 premiere satellite radio services, XM Satellite Radio and SIRIUS Satellite Radio, and they provide a fantastic variety of channels of private label programming and compete for customers who have not identified themselves that they are candidates for satellite radio.

With the arrival of Howard Stern and his gang of shock jock cohorts, the momentous increase in popularity has stunned many in the radio industry to the point where they have invented this concept of Free FM to set terrestrial apart from the non-free subscription based satellite radio options. And to further promote this new form of radio listening, manufacturers have worked night and day to invent new, smaller and more easily portable satellite radios. The end result is that industry veterans of the old AM/FM spectrum worry about the future of traditional broadcast radio.

The History of Satellite Radio

The history of satellite radio as stated goes back to 1992, when the Federal Communications Commission (FCC) assigned a portion of the spectrum devoted to nationwide distribution of digital radio service to satellite transmission companies. SIRIUS Satellite Radio and XM Satellite Radio paid tens of millions of dollars from public funding ventures to obtain licenses awarded to them by the FCC. There were other applicants who didn't make the final cut by the way.

Despite winning the rare license to broadcast via satellite on this new spectrum, both companies had to overcome the first obstacle to success - which until this most recent release of the long awaited Stiletto 100 Portable Satellite Radio - getting manufacturers to produce consumer-friendly portable satellite radios to receive the signal. Even if they could start delivering satellite radio signals immediately, it was like the tree in the forest - no one could actually hear the signal. Additionally, because terrestrial radio was and still is free all over the world for the most part, the question which had to be addressed was how much if anything would people pay to receive the signal. Would a one time payment for the hardware suffice or could these 2 soon to be behemoths, produce steady cash flow with subscription based models of payment. Essentially what still remains to be answered is if consumers would be willing to pay for new hardware and then pay a monthly subscription fee for radio service or would there be a more efficient and adoptable option.

Overcoming Obstacles - Satellite Radio Launches

XM Satellite Radio and SIRIUS Satellite Radio went crazy marketing their new service in a crossing the chasm sort of way and they set out to transform their licenses into a real business by quickly introducing fairly bulky portable satellite radios and at least some enticing satellite radio programming. To attract new customers they struggled to offer adaptable hardware components that could be used in a variety of locations – home, work, and especially the car, where most radio listening still occurs.

Working with electronics manufacturers like Sanyo, Panasonic, JVC and Kenwood they started developing new components. The results included portable satellite radios, receivers, and "plug and play" components for nearly every consumer application. Manufacturers built satellite radio receivers for cars, homes, offices, trucks, RVs, boats, and even airplanes.

On the programming side, XM and SIRUS starting signing wacky distribution deals for lots of millions of dollars all in the aim of putting together an assortment of niche programming channels that would have something to offer consumers with nearly any musical taste. Each station was programmed to appeal to a specific type of listener, and most were commercial-free. We're talking about Elvis, Reggae, Martha Stewart, Howard Stern and more. Programming originated primarily from New York, but also from other locations, plus XM and SIRIUS entered into collaborative agreements that would allow popular musicians, entertainers, personalities and others to perform live from the originating locations.

Dealing with resistance to a monthly fee, though, required a broader array of marketing, public relations, and strategies to communicate the benefits and advantages of portable satellite radios. XM and SIRIUS knew that the key to their success would lie in convincing consumers of the value they would receive while making the hardware widely available and affordable.

Sirius Satellite Radio vs XM Satellite Radio

Since most listening to the radio happens in the car even to this day, the companies got smart and started signing deals with car manufacturers for examples so they could get the device in the front of the end user in the easiest and most direct manner. They collaborated with car and truck manufacturers to make portable satellite radios standard on many high-end luxury vehicles, and an affordable option on most other mid-range vehicles. This trend has now found its way to lower end models since costs have come down and even lower end users want access to this new form of programming. For most of these consumers, the cost of a monthly subscription could now not be prohibitive and by making it easy for them to access their services, XM and SIRIUS could entice consumers to try it out and start spreading the word about its value.

Portable satellite radios were also placed in boats and RVs, and standard receivers were heavily marketed for use in homes and businesses. The first leap in market penetration came late in 2004 with the introduction of the first handheld version of XM Radio and SIRIUS Satellite Radio receivers. These devices were designed to appeal to people who wanted access to satellite radio services while running and walking from place to place in locations other than their cars, trucks, homes or offices. Problem is that the Sirius device was not truly a portable device getting a live feed until now with its latest release of the Stiletto 100 portable personal satellite radio.

Another important component of spreading the word and gaining market traction was establishing partnerships and marketing agreements with electronics retailers such as Circuit City, Best Buy, Target, Wal-Mart, and other well-known names. Working closely with retailers, XM and SIRIUS have greatly increased their presence with consumers and sales have steadily increased.

Will Consumers Really Pay for Satellite Radio or is Free FM enough?

There are a host of reasons to pay for satellite radio. Here are a few benefits you get with a paid monthly subscription to satellite radio:

More exclusive channel choices (up to 150)

Clear, crisp digital signal (when you have a clear line of sight unfortunately)

Signal available with no fading when driving long distances (ie. keep the same station throughout the trip)

Niche music stations to suit any musical taste (listen to DEVO all day long - ha ha)

Commercial-free (kind of) for music channels

Live audio streaming of sporting events like NBA, NFL, MLB ...

Weather and traffic information for up to date stats

Assortment of sports, talk, and news stations (just another way of saying, Howard Stern 24/7)

What to Expect in Satellite Radio:

Satellite radio service is still a minor player and mostly it is inevitable that these 2 companies will continue to invent and deliver new technology and even more features. XM Radio and SIRIUS Satellite Radio will have to devote resources to such innovations if they are to attract enough subscribers to become profitable. I would expect to see smaller devices, with better recording features and larger display screens and eventually long battery life.

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