Saturday, April 18, 2015

How Sirius XM Blew Their Chance To Conquer The Market

If you are like most people you like to listen to music, and if you are like most people you have certain types of music and favorite bands you like to listen to. And, most of us like to listen to music while in the car, and doing things like working out, etc. But even though everybody hates commercial interruptions, most of us do not use Sirius XM radio to listen to music.

While there are tons of free services that allow you to listen to music, they all have commercials. So to get the music you want without the annoying commercials every few songs and annoying DJs telling you to be caller 10 to win tickets to some band you've never heard of, you have to shell out some money. You can either buy your music on CD or downloadable version for about a dollar a song, or you can pay for a service that charges monthly fees to listen as much as you like. That is where services like Pandora, Spotify, and Sirius XM come in to play. For the price of about a dozen of songs per month you can subscribe to these services and listen to all the music your can handle. And with a service like Sirius XM you can listen in your car with a satellite radio tuner right over your cars stereo, or even stream music over the internet to your cell phone to listen to your tunes anywhere you want. And Sirius XM also has tons of other features in addition to just playing music. There are tons of talk radio, news radio, sports talk and live game coverage to listen to, as well as live traffic and weather updates that you can get right on your cars GPS. All that for about 50 cents a day! Seems like a great deal right?

Well apparently it isn't such a great deal, as it isn't really the top competitor that it really should be. Sure there are millions of subscribers, but they could have way more. And yes there are some cool features, but they could have a lot more services to offer. I believe the problems started after the two companies merged. The merger was pending for a long time but was finally approved and the sole two satellite radio companies merged into one. When this happened they were finally able to merge many of their operations to save costs, and they could now offer content that was once limited to one service to all their subscribers. But they still have a lot of redundancy that should be done away with,

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One of the biggest things that I believe they should've done, and it is hard and would cost a lot of money, but they should've make all the old radios obsolete but they need to merge both services into one. See, since they started off as two separate competitors they both had to have their own chunks of bandwidth to use. See, each company that can broadcast over the airwaves must be registered with the FCC, which allows them to use only a small portion of bandwidth in the overall spectrum. Everything from broadcast TV, radio, and even things like cell phones and WiFi all use certain parts of the spectrum, designated by the FCC. Things like WiFi are set to use a certain portion of the spectrum in the 2.4 ghz range, while an FM radio station may use the spectrum in the range of 103.1 MHz. Similarly Sirius XM has their own portion of the spectrum allotted to them. When they first started out, both Sirius and XM both had an equal portion of the spectrum. But since they merged, they effectively had double the amount of spectrum to broadcast on. So that means they should've added a whole bunch of stations, effectively doubling the amount of channels to listen to, right? Well actually no. While maybe a few stations may have been added here and there but these are usually at the cost of removing a current station. That is because both the original Sirius and XM radios are still supported and they can't reorganize their part of the spectrum and still have those old radios still work. However I believe that they should have put a plan into place regarding this in the event that the deal went through that could allow radios to be reprogrammed on the fly. And if the merged was denied, there would have been no harm done. But since the merger did in fact happen they should merge both the services into one and allow their services to take over the full amount of spectrum they are allotted.

Another thing that Sirius dropped the ball on is limiting their service to only those in the United States. The satellites that revolve around the earth are mainly focused at North America, the united states to be exact, so most parts of the world do not get good, if at all, coverage. But many parts of Canada, Mexico, Central America and other areas do get pretty good coverage, and even for those that don't, Sirius could allow their international customers to use the internet to stream their content when they cannot get a signal. I believe they are leaving a lot of money on the table by not allowing international customers to subscribe. Many people living around the world, such as ex-patriots or those living in other countries who wish to stay connected by listening to the news, talk and sports from the US, along with the music the love.

While there are some neat extra services that Sirius XM offers, I believe they could have many more cool features to offer. Currently they offer live traffic and weather data that can be displayed on a car's GPS display. They also have special services available just for pilots in their planes. But there is so much more that they could be doing. A few years ago they offered a service which allowed select vehicles with a preinstalled system to be able to view a few channels of select video content. The channels were pretty much all kid and family related and there weren't that many but the service was killed off long before it was given the chance to take off. With the advent of in vehicle video screens I believe this could have been a huge market for Sirius XM that they dipped their toe in but pulled out before they ever even got their figurative foot in the pool. Only one company released vehicles with Sirius TV service compatible receivers, and only on 2 or 3 of their vehicles! How can you give a service a fair shot when only two minivans and one SUV model has the $1,500 option for the needed equipment? Nowadays most parents have tablet, DVD player, portable game console, or something else to keep their kids occupied watching movies and shows while driving, but this service started years ago - before the iPad was even invented. If multiple manufacturers had this available on many different vehicles as well as aftermarket add on receivers and Sirius subsidized the purchase of the equipment there could have been exponentially more customers for the service. Then, if they would have focused on creating more high quality content and allow a few more diverse channels and programming options, this service could have been a home-run. Instead of all the channels being kids shows, they could have had a little more diversity as well. I think there should have been a few more channels. I think there was about 3 channels that were all kids shows. In my opinion I think they should've had a few more, although I know it is limited to the amount of bandwidth available and video channels take much more space than audio only channels. To start, they could've had a channel aimed at younger kids, a channel for the older kids, a channel for kids and family members of all ages, a channel for news and weather, a business news channel, a sports channel, and a general entertainment channel. That way not only parents would want to subscribe, and parents would be given more reasons to subscribe other than just for their kids to watch. I believe that the sports, news, and business channels would be great for businessmen who commute. Many businessmen have drivers, take taxis, or even take limos - all of which would be a prime candidate for a live TV service in the car. Imagine if a private chauffeur service outfitted all their vehicles with Sirius backseat TV, who wouldn't want to hire them over their competitors? And if they have a driver for their limo or town car, they probably wouldn't mind paying the small subscription fee to have this service. And even regular people would want the service for their other programming options like sports, news, general entertainment, and whatever else Sirius XM might want to squeeze in. I don't have kids and I can't afford a driver but I would love live satellite based TV service in my car. I know you can get live DirecTV in your car or truck but the satellite receiver is huge and the cost is outrageous. In fact, I used to have a terrestrial based over the air TV antenna and receiver in my car years ago, but the reception was horrible in my car, especially while driving at speed because it is hard to receive a TV signal that is not designed for moving antennas.

There are many other services that I think Sirius XM could offer as well, but this article is plenty long enough so I won't go into depth on those. The ability to receive one way data at pretty fast speeds could be used in a myriad different ways. Data streams could deliver live traffic and weather info on your car's GPS navigation system. And when new streets and other updates are added to the GPS, it could even be downloaded into your car automatically while your car is parked at night. Imagine if you locked your keys in your car and you could unlock it simply by calling up Sirius XM and having them send a signal to your Sirius XM receiver connected to your car's internal electronic components and voila - your door unlocks almost magically. Emergency alerts like weather warnings and amber alerts could be broadcast to your vehicle via satellite as well. As mentioned above, there are services that aren't aimed at the average consumer as well and Sirius XM should have tried to conquer this market even more. One of the biggest markets for satellite radio is for truck drivers, I'm not sure what but I would bet there could be some great service they could offer truckers for a nominal fee. Something like traffic and route news and info that is geared specifically towards truck drivers and other professional drivers. This would increase their revenue stream monthly as well as entice more truckers to make the jump and sign up. I think Sirius XM missed the boat on this, as now more and more vehicles are coming with internet connectivity abilities, either alone or with the use of your cell phone's data connection. If they would have cornered the market on this they could have had a great market built up already and had 100% of the market share when other companies started to try and offer services like this via internet as opposed to satellite.

It is because of these and other missteps that Sirius XM has taken that they are not nearly as big as they should be. The technology is great and it fills a huge need for in car entertainment.