In a recent article by Tyler Savery, he points out a number of places where Sirius XM can collect some much needed cash without adding much to the costs. Since I have heard of the idea, I think that the future of SDARS lays in commercial broadcasting.
Patented Multi-tiered Overlay Technology
A patent that is held by Agere Systems Inc (Now a part of LSI Corp) that would allow Sirius XM to introduce a free version of Sirius XM radio that is (heavily) advertiser sponsored, as well as keeping the same subscription-based commercial-free version. In simple terms, commercials are inserted at certain times for non subscribers, while full subscribers get the commercial free product. Of course, not all channels will be available. Premium content such as NFL, Howard, O&A, etc would likely not be available on the advertising supported form.
Here is the way this would work… a selection of channels will be available, free to any listener who has a Satellite Radio. These are the same channels that are available to subscribers, with one key difference. Depending on the frequency chosen by the company, a commercial will be overlaid on top of the channel programming. If you are a subscriber, you will never hear that commercial. You will only here the same song you were listening to before. Nothing has changed for you. If you are not a subscriber, however, you will hear an advertisement for GM, McDonalds, Wal-Mart, etc, instead of the song. This would translate to a radio experience similar to regular terrestrial radio.
Of course, songs are notorious for not lasting an even number of seconds. Lets say a song lasted 2:39. Sirius would play a total of 2:30 seconds of advertising, and then play THEIR OWN 9 second spot, telling you how you can avoid all of these commercials for as low as $6.99 per month, or perhaps a special concert series or interview or dedicated band channel that is available to subscribers only.
A lot of people have talked about how to start getting revenue out of the 20+ million receivers out there that are dormant right now. What better way to get revenue than to turn all inactive receivers on with commercial-supported music interlaced with 3-5 spots per hour trying to get people to subscribe. This can potentially increase subscriber revenue, but the real money may be in the ad revenue that this type of offering will bring as well. Combining the 18.5 million subscribers today with the 20+ million dead receivers, that means that advertisers will potentially have an audience of nearly 40 million listeners nation-wide listening to their broadcast. What would that be worth to them?
This technology has the possibility of being an industry changer, though I admit that I do not know what all it would take to get this implemented. To discuss further, please visit the SiriusBuzz forums and post.
Position: Long SIRI