Space-cases vs. Terra Firma: Isn't it all about the $$ ?

[rev_darkness]

In the battle between satellite radio and terrestrial broadcast radio, we are constantly told that it's all about money.

Terrestrial Broadcast Radio (hereafter referred to as "Radio") is a money based industry. We recognize this by the fact that advertising dollars are distributed based upon a show's or station's ratings, and when a show or station doesn't perform, it gets lower ratings, and therefore gets fewer advertising dollars. We can basically say that Radio is a business, and it's business is making money.

Satellite Broadcast Radio (hereafter referred to as "Satellite"), on the other hand, is losing hundreds of millions of dollars per quarter. XM lost $666.7 million in 2005, and Sirius lost $311.4 million in just the last quarter of 2005.

Being a computer geek, I'm seeing a disturbing correlation to the "DotCom Bubble" of the late 90's. And we all know how that turned out.

What's your take on this? Also, if you actually make decisions for you station based on money, please indicate so...

P.S. Yes, I'm aware that the subject line sounds like Tony Williams was writing this, but if you've read this far, you've probly figured out that it wasn't...<P ID="signature">______________
"The only thing that sustains one through life is the consciousness of the immense inferiority of everybody else, and this is a feeling that I have always cultivated."
---Oscar Wilde</P>

 

[spymovie7]

> What's your take on this? Also, if you actually make
> decisions for you station based on money, please indicate
> so...

The battle for market share between Sirius and XM reminds me of the one between the VHS and Beta formats in the early 1980s.

One of these two companies will take off and become profitable, while the other will continue to lose money and market share.

It's also somewhat like what's going on now between Netflix, Blockbuster Online, vs. your traditional neighborhood video outlets, such as your neighborhood Blockbuster. Every few months, each of these three is changing slightly in an effort to compete.

In the coming few years, I'm sure that we will continue to see changes in satellite radio, as well as traditional local broadcast stations, ipods, cell phone and Internet music services.

Radio always has been about "market share" and competition. That's what ratings are; your slice of the pie. Advertising sales are not always in direct proportion to ratings. It wouldn't surprise me if KLUV with its demographic bills more each month in advertising revenue than #1 rated K104, for example.

To take a guess at the future, I feel that traditional radio will lose part of its audience for the next couple of years, and then things will level off.

As far as satellite goes, my guess is that Sirius will become #1 within the next year or two, and XM will kind of go the way of the outmoded Beta format.

Since I also made the analogy between Netflix and Blockbuster, since Blockbuster Online is now becoming a hybrid between postal delivery and your local neighborhood outlet, I feel it will win its battle with Netflix. Personally, this month, I'm switching from Netflix to Blockbuster, and so is a friend of mine.