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

INTRODUCTIONWould people be go outing to pay $12.50/ month for commercial free radio beamed right to their car or home. closely two companies and many big investors are 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 orbiter 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 artificial artificial 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 sincere 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 commercializeing 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 gamy and lazy radio industry has failed to react to an eroding listening average and an increasing number of competing technologies. Issues like lack of attention to programming, no on-air talent, and an append of 166% in the time devoted to commercials have driven listeners away from radio. Teens vulcanized 12-17 spend 11% little time listening to radio compared to pentad years ago and adults 18-24 spend 13% less time compared to tail fin years ago (Helyar, 2004). The article further discusses that terrestrial radio has such(prenominal) to fear from competing technologies like satellite radio, streaming digital radio on the Internet, and Apples i Pod. What 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 skid listeners away from terrestrial radio. Sirius offers 65 commercial free channels of harmony 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.