THE HOT NEW TOYS UNDER THE TREE Chris Byrnes It’s been difficult to miss the hot Christmas item this year. Open any flyer from Best Buy, Future Shop or the other electronics stores and you’ll see lots of tempting products for Satellite radio. I was recently in “The Source” and while I was waiting to be served I could not help overhearing a conversation between a sales rep and a 30-something fellow who was explaining that he was sick of the same old, same old on the rock station he listens to and wanted to do something about it.
This person was clearly well informed about both satellite services and his dilemma wasn’t whether to buy a Satellite receiver, it was more would it be XM or Sirius?
On the positive side of things, here is why Satellite radio may do better in Canada than it has in the U.S.
Now, the Yankee Group, an independent communications company from Ottawa, has published new research that predicts satellite radio will reach one million subscribers in just three years and 3.5 million Canadian subscribers by 2015. This is believed to be the first truly independent research on satellite radio that has been conducted in Canada.
Both Sirius Canada Inc and Canadian Satellite Radio Inc have moved quickly to get their product offerings launched and the receivers in stores in time for the lucrative Christmas shopping season. And judging by the amount of advertising they are doing in newspaper, radio and television, there will be lots of little packages under Christmas trees all over Canada this year.
Jeff Leiper from the Yankee Group says “Canadians have less choice on the dial” He also shares the view that Canadian’s have proven they like new gadgets. “When you give Canadian’s greater choice in entertainment content, history has shown they’ll adopt it”
However it may not be all clear sailing for this “threat from outer space”. Only time will tell how many people will be prepared to pay between $12.99 and $14.99 a month for a lot of channels that don’t interest them. I checked the XM site and their base offering requires you to sign up for 3 months service plus a one time activation fee of $14.99, which means you’ll pay about $17.99 a month for this service. Over at Sirus they are waiving the activation fee for the first 50,000 subscribers. Their monthly fee will be $14.99 a month or you can sign up for a year for $164.99 and save a month’s subscription charge.
In the U.S. there are no reliable figures published as to the number of subscribers who renew or actually listen for that matter. All we know is how many subscriptions have been sold. Just because someone gets a satellite receiver for Christmas does not mean the recipient will ever activate or renew it when the first subscription period expires.
Another challenge could be coverage. While I’m not questioning that the satellites will provide a good signal over much of Canada there will be some problems in urban areas where the service will be interrupted by high rise buildings. I was in Saint John, New Brunswick in December and the vehicle I was in lost the Satellite Service numerous times as I drove around a city with mostly two and three storey buildings in the downtown area. It got to the point were I turned it off until I got onto the highway.
There are some advantages to satellite radio. Firstly, the stand alone receivers are small in size [some smaller than a pack of cigarettes] but packed with lots of cool technology. For example, you can store up to 20 of your favourite artists in memory and whenever one of your favorites is playing on any of the channels you will be notified and can quickly tune to that channel. You can configure it to display the stocks you track or display information about your favorite sports teams. Another benefit, providing you purchase the home base set, is that you can drop the small unit into a cradle and instantly have Satellite radio playing on every radio in the house.
The music is a lot more esoteric and unfamiliar than I would have expected. I tuned into the Classic Rock channel and they were playing “Sun Burst” by Bob Seger, while on the Top Tracks channel I heard ELO “Fore and High” followed by Led Zeppelin’s “Ramble On.” What is not heard at this point is much Cancon. There are two Canadian News channels, one in French and one in English and some of the sports channels carry Canadian content, but other than the odd Shania Twain or Andy Kim track they seem very light on Cancon.
The benefit that is touted in the external advertising is “100% commercial-free” and while that is true I was intrigued to hear so many promos for other channels and the product in general. I suspect that some consumers will perceive all this as advertising. I was also intrigued to hear complete radio shows from years gone by on some of the channels. For example on the 60’s channels I heard shows from WLZY Clearwater, Florida, WCFL Chicago and WIXY in Cleveland complete with the jingles, promos, news events and the disc jockey of the day talking about events that were relevant for that time. But I suspect some listeners will be confused when they hear that “Mamma Cass is coming to town to play two shows this weekend” given that she died in 1974. I found it odd that Satellite radio would use old radio shows as a way to provide entertainment, considering that their television marketing slams terrestrial radio as boring and promises a way better experience over at satellite. The more primitive production technology in the 60’s also ensures that the listener will not hear great, digital sound reproduction.
We have written a lot about what we believe terrestrial radio needs to do in order to minimize the effects of satellite radio and how this new offering might change the medium that has been around since the 1920’s. Visit our website for more information or call our office and we’ll send you a copy of the articles.
I feel very positive about terrestrial radio’s opportunities in the coming years, providing we all pay attention to detail and work harder to make tuning our radio stations as enjoyable and local as possible. I wish you all the best in 2006. |