I have XM. I paid for sattelite radio because I got tired of hearing the same THREE pop songs In-A-Row over and over and over. I PAID becuase I did NOT want to hear near nonstop commercials between the songs. I Chose Sattelite because I’m over 35 and I want to hear MY music– NOT what the POP music industry thinks 17 years olds should be hearing. I don’t have Cable sattelite TV with their abbreviated music offerings because I still refuse to PAY for Video with Commercials. And the Music selection is NOT as comprehensive as either Sirius or XM.

Next– I DON’T have it in my car. I don’t LIVE in my car. I Don’t RELAX in my car. The receiver is connected to my nice HOME stereo in my comfortable livingroom. I never understood this myopic focus on only automobile installation. There are quite a few of us PAYING adults do the same thing.

Forget the kids– THEY don’t pay bills– their parents do. And Kids are too used to getting everything for free off the internet anyway, so focusing on convincing a 20-something to PAY for what he thinks he should get for free anyway is a losing proposition.

Last– there is simple convenience. I just TURN IT ON. I let the programmers surprise me. I have no iPod, and have nothing against iPods. What I DON’T want to do is spend HOURS and HOURS searching, downloading, sampling, categorizing, copying, transferring, shuffling my music. People: That’s called [i][b]WORK[/b][/i]. KIDS and Teenagers do it because they have TIME on their hands. I WORK! When I get home, I just want to TURN THE MUSIC ON and RELAX.

And yes, I know a lot of you adults also make a lot of noise about how great your digital music collection is– but you are a small technophilic minority. And in order to keep that digital collection new and fresh– YOU have to go and Search, Sample, Download, Copy, Transfer, Categorize, etc etc. You have to WORK for your music.

See, I already did the WORK and earned the money. Then I pay a little of that Money and There it is– I just Turn my Stereo on. It’s so much simpler.

So My worry is more that Sattelite radio will sputter out because the newly merged company STILL won’t make the investors instant quarterly billionaires.

I took your advice and dug into the subscriber numbers. In fact, I recently took a B-school final exam on the satellite radio industry, SIRI in particular. First, the business model has heavy fixed costs, meaning scale is the key to profitability. Second, adoption has been faster than any previous consumer tech trends. Third, per subscriber acquisition costs are dropping (2004: $177 from $491; XM 2004 = $62). Fourth, average revenue per customer is rising (2002-04: $7.47 to $10.02). Fifth, XM reports trial subscriber retention rates of 50% (via OrbitCast). Sixth, in 2007 27% of new vehicles will have satellite radio; OEMs will grow this to 55% by 2010. Seventh, economies of scale due to the merger will help spread out fixed costs over a larger subscriber base. Eighth, they have a large amount of cash on hand and relatively low debt.

In my opinion, this merger makes sense. You say, “But just because you build something, doesn’t mean people will come” but I’m going to go with the Field-of-Dreams mentality on this one. The content and the technology are valuable to many consumers, valuable enough for a low monthly fee (compared to cell phone and cable bills). It’s not satellite radio, it’s entertainment. Americans spend a lot of time in their cars, they want to be entertained.

More on my blog…

If this deal is actually approved — and as I wrote about on my blog a little earlier this deal is not a slam dunk — then watch even more car makers previously on the fence installing satellite radio in cars like they’ve done with OnStar and offering one year free subscriptions.

And as for the comment above (Shaun) talking about OnStar being screwed because they are using all analog equipment? Wrong. They started switching to digital already and will be offering digital equipment upgrade to those impacted after Jan 1, 2008:
http://www.onstar.com/us_english/jsp/explore/onstar_basics/helpful_info.jsp?info-view=tech_equip

New vehicles purchased are using the digital network.

Until this goes through there remains a problem with whether to choose XM or Sirius, with the choice gone you’re going to see more people trying satellite radio. Since I first wrote about my experience I’ve talked to lots of different age people who LOVE satellite radio. I was surprised truly how many enjoyed it because I had many of the same thoughts you did, Mark.

I’m a little wiser now after trying it out myself for awhile

You don’t see this type of passion over terrestrial radio any more. The problem with MP3 players and iPods is the content remains static. How many times can you listen to the same stuff over and over again? There is no serendipity factor like there is with radio. On the internet services like Pandora fill that void.

Live radio is exciting and immersive and I think it will be the other side of never before you see MLB and the NFL giving their content away. This will fuel satellite.

Someday we’ll have web everywhere and then satellite days will be numbered but I think that’s much further off than one year. In other countries where broadband internet is more widespread yes it will sooner, but we are behind in the US (not sure about you in Canada).

In the meantime if you like great radio content, both live and commercial free music (yes, there are still many music stations with no commercials) and especially if you are in the car, there is currently no better fix than satellite radio out there.

I’m all for indie content producers (podcasters, vloggers, etc), but the vast majority of this content is crap compared to shows by experienced radio people like Stern.

If XM+Sirius doesn’t whore it all up with ads — and that is a definite danger as mentioned by others above — then don’t expect them to go anywhere in the forseeable future.

There are enough radio fans to make satellite a viable platform. People are willing to pay $15-20/month for good content, just as they are willing to shell out $50-100/month for TV (not me on the last one). The biggest cost is behind them in getting the satellites up there, now they can monetize, and that’s what they are doing.

And as for Stern. They gave him shares of stock, not cash for a portion of that money, which is a fact that is often overlooked by casual reporters. Dig deeper and you’ll see it was a five year deal that has performance requirements, similar to what atheletes sign.

The question you should be asking is there enough good talent on Satellite radio that people are willing to pay for? Before signing up for Sirius in September 2006 I would have said no, but after actually checking it out for the last few months, my answer has changed to “yes.”

The same question could be asked of TV as we know it. Wallets are driven by content.