No one knew what satellite radio was until Howard Stern signed on.
And people hate Howard.
Suddenly satellite radio went from something cool, the new iPod, into the same old thing, but you pay for it.
I mean who wants to pay for Howard Stern? Oh, his show is better than ever, but it’s all about freeing HIM, not servicing YOU! He was constrained by the FCC, not you. And suddenly you got the same old thing, except it cost you $12.95 a month. Sure, diehard fans were happy to pay. But most Stern listeners were not. Only a fraction followed him to satellite.
Great way to build a business. Giving the middle finger to your audience. Telling people you need to feel free to make $100 million, but really you’re all in this together. Bullshit.
And those not into Howard Stern, they were happy to stay away from the stink.
But what about XM?
Suddenly, satellite became synonymous with Sirius. Howard hyped it everywhere he went, for a year before he could even be heard on the service.
And then Mel Karmazin followed him there.
Mel Karmazin is the number two poster boy for everything Americans hate about radio. Number one, of course, is the Mays family/Clear Channel. But wasn’t it Mel who turned CBS Radio into an advertising juggernaut? And everywhere he went after signing on to Sirius, Mel babbled about how he was going to sell so much advertising.
Suddenly, satellite radio was Howard Stern with commercials. And you had to PAY FOR IT! People were turned off.
Most people have never heard satellite radio. They’ve got no idea of its charms.
Then again, if you listen to Sirius, it doesn’t sound that different from terrestrial. The deejays are jive and the records are repeated endlessly. But you’ve got STARS! Curious, don’t you think. In an era where the stars on television are the hoi polloi, where everyman is what most people want to see, they suddenly want to PAY to hear the bloviations of people who have no previous history in radio?
Now if you need Howard, Sirius is the only place to go.
And if you buy a Sirius-ready car, you’ll find the service is superior to terrestrial, so maybe you’ll keep up your subscription.
But where’s the growth?
Suddenly signing up satellite subscribers is a grind. The kind Mel Karmazin works with his salesmen. Instead of people flocking to buy it, like Windows switchers to Macs, you’ve got to convince people. And that’s tough.
XM had it right. The service was growing organically. Its best salesmen were its subscribers. But you can’t sell XM to non-subscribers anymore. They know all about satellite. Losing money and desperately begging for a merger. Battling with terrestrial and iPods. Shit, does the iPod cite the Walkman as competition? But we’ve got Mel all over the media saying Sirius and XM have no choice but to merge, because of all the competition. Does U2 have competition? Even Coldplay? Great bands generate their own desire. It’s only crap bands that have to fight for their spot in the marketplace.
I’m getting a bad feeling that the Sirius/XM merger is a fait accompli. That all of Mel’s whining is going to convince the regulators. And this is sad. Because what’s lost in translation is satellite radio’s PROMISE!
Oh, don’t tell me about Net radio. First and foremost, you can’t get it in your car, and won’t be able to for a while. Never mind that too much of it is unlistenable. And HD radio? The amount of money thrown towards programming wouldn’t keep XM or Sirius afloat for minutes. No, satellite radio is the answer, if only they could make it cool again.
I don’t think Mel is interested in making Sirius cool. He’s just interested in the bucks. Which is why satellite is being dragged down. But XM? Can XM be cool again? Can XM be saved by a repositioning, a separation from Sirius?
XM is not terrestrial without the commercials. It’s a different philosophy. The deejays don’t talk jive and the playlists are varied. Not that anybody but subscribers knows this, because nobody has told them!
The future is about filters. XM is a filter today! But it’s been positioned so poorly, it’s dying on the vine.
While Hugh Panero focused on car deals, he did no soulful marketing. And, didn’t plan for car owners to switch the service off, because the vibe on satellite is so bad in the community. Buying satellite is like buying a Zune. What kind of chump lays hard-earned money down for crap?
First and foremost XM has got a perception problem. Sirius does too, but it’s going to use this merger to triumph. But what if the merger doesn’t happen? What if regulators finally see that competition is best? Can XM sell itself again? Can it get people to believe and spread the word? That’s its challenge.