June 23, 2012
Alain de la Brousse
What have 22.3 million subscribers learned about satellite radio that the rest of us listening to traditional radio still haven’t yet figured out? The amazing advantages that are now giving satellite radio stations the power to change how America listens to music, sports, news, and comedy. In 2001 Fortune magazine named satellite radio as their product of the year. The magazine’s rationale for its selection stated: “of all the new technologies of 2001, XM Satellite Radio is way, way, way above the rest. It’s the first major advance in radio since FM emerged in the 1960’s, and the best thing to happen to ...view middle of the document...
This provides the listener a wide variety of choices to choose from while on a short drive or traveling across the country.
After all, the majority of people enjoy listening to the radio while driving. We tend to set our favorite stations so they are available at the push of a button. However, if travel ever takes us out of our stations broadcast area, we quickly pick up static and will eventually lose the station altogether. Satellite Radio makes the same stations available from coast to coast which is a major advantage over the narrow geographic coverage of traditional radio stations. The ability to listen to favorite stations is a major benefit for travelers. Other benefits include quality sound, digital display readout of each station, song title, and artist; the availability of sports scores and stock quotes; along with commercial free music of your choice.
Finally, no longer do we have to waste our time listening to those unwanted commercials and the constant interruptions to favorite programs by someone trying to sell something that we are not interested in. Traditional radio has always been dependent on advertisers to bring in the majority of their revenue. This means that as long as traditional radio is on the air, there will always be commercials to bring in the needed revenue. This results in less programming and more frustrated listeners. One of Satellite Radio’s many advantages is it does not depend on advertisers for revenue like local radio stations do.
In short, the industry has developed another means of obtaining revenue. Even though the primary source of income is derived from subscriptions, Satellite radio’s main source of revenue comes from their listeners. Currently there are 22.3 million subscribers, and it is projected that number will increase by 1.5 million during the course of 2012 (Goldsmith, 2012). Although the majority of revenue for satellite radio comes from their subscribers, they have also found another form of revenue, this being the auto industry.
In addition to the revenue from subscribers, Satellite Radio is also being assisted by partnering with automobile manufacturers like General Motors, Honda, Ford and Daimler-Chrysler. All new vehicles from these companies are equipped with the capability of receiving Satellite Radio service. Not only did this add value to vehicles but also is a good advertizing point for the auto industry. New vehicle owners are given a 90-day free trial period, after which they have the option of subscribing to the service. Approximately sixty percent of customers who purchase vehicles that feature this option become satellite radio subscribers (Cole, 2005). Once people find out how much variety they can get and how reasonable the cost for a subscription, they can’t wait to become subscribers.
After all, current subscriptions cost less than twenty dollars per month for over one hundred forty channels on an introductory basis (Siriusxm.com, 2012). These are...