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  1. #1
    TSavery is offline
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    Patent

    This patent seems to have some people excited. First let me say thank you to those that have e-mailed the link to me (NJguy and crfceo). Tips from readers often can become articles, but this patent was covered some time ago, and those that have been following the sector a while are already familiar with it.

    http://www.rapidpat.com/backpage.cfm...O=0&TYPE=SIRI8

    This patent made the rounds a few years ago. It can be used to insert a commercial load into channels for low tier "subscribers" while a subscriber with a higher tier will not hear commercials. This helps to conserve bandwidth.

    This is an aspect of the business model that many have felt Sirius an XM would have eventually gotten to anyway, regardless of the merger.

    The discussion a few years back centered on a day when all SDARS radios would get a commercially based service free, and the subscription service would be remove the commercials.

    It is because of this concept that I have such concerns over the Georgetown Partners proposal. Their proposal would strip away bandwidth for a service that Sirius and XM have already been working on for quite some time now, and remove business synergies. Sirius and XM need to maintain their rights to operate the business in its natural course. GP is IMO trying to take the next natural step away from Sirius and XM and keep it for themselves.

    The synergies of the concept happen in that they do not need to program new channels. They simply add commercials to the service of those getting it free. While the free subscriber hears 20 minutes of commercials each hour, the premium subscriber gets commercial free music. Essentially, while commercials are playing for some, another song is playing for others.

    At the point in time when SDARS got this running, the ad revenue would be substantial, and the work to accomplish it minimal. In addition, they would be getting ad revenue from non-subscribers.

    While it is a good find, it was discovered a while back and discussed on boards like Sirius Backstage, XM411, and XM Fan, if I recall correctly, as well a few message boards. For many that have been around a while, this subject has been covered. For newer people, Perhaps it does warrant new discussion as it is indeed relevant to the current situation in SDARS.
    Tyler Savery
    Satellite Standard Founder

  2. #2
    Newman is offline
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    The only difficulty I can see is finding the commercial advertising to fit into slots that are not perfect fits. It would be difficult to sell the advertising to fit a song that lasted 2 minutes and 39 seconds, for example.

    Part of that situation could be placated by having radio spot IDs that lasted from 1-9 seconds for Sirius/XM it's self, because I am sure they dont want dead air for 3-5 seconds after a commercial and before the music starts again. This could definately be a significant revenue generator for the company.

    I think as a combined company, they will have the audience to attract some decent advertising. I think the hold up right now is that SatRad as individual companies does not reach a significant audience (or a reliable enough method of tracking its listeners) for a large name advertiser like McDonalds/WalMart et al to pay for the commercials. I think this merger will give them that audience. They need to get rid of some of the commercials they have running now. I listen to XM channel 150 - uncensored comedy. It seems like every single commercial is about male enhancement and sex toys. Those commercials actually disgust me enough that I change the channel.

    It would be nice if I could get that station with NO commercials after this upgrade is installed... I would even pay a premium price for it. I hate commercials now after listening to XM =(

    Edit: Funny, I just remembered posting about this a long while ago... the thread is called Premium Channels.
    Last edited by Newman; 05-03-2008 at 12:44 PM. Reason: See Edit above

  3. #3
    TSavery is offline
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    Newman....

    The concept to fill 2:39 would be this:

    Four thirty second ads and then DJ chatter as you suggest.

    The fact that people are excited about this patenet is good. It is stuff like this that I see as the future in SDARS.

    The technology is not new, it is just that it has not been implemented as yet. This type of technology becomes much more viable down the road when there are enough radios on the market to support it. That time is not quite here yet IMO
    Tyler Savery
    Satellite Standard Founder

  4. #4
    crfceo is offline
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    Tyler,

    I'm not so sure this was the discussed issue you refer to. I did find another issue, but not this one.

    This is the only discussion I was able to find...

    http://www.orbitcast.com/forums/showthread.php?t=727

    I also want to point out that citi's recent upgrade and subscriber target which was confusing to many in its high number, came 2 days after this patent was approved....

    If you consider how long it will take to produce that many chipsets and subsequent radios, that 55 million subscriber target seems very probable...

  5. #5
    TSavery is offline
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    crf

    I as well as many others who have followed these equities for quite some time have been aware of this patent for e few years. Perhaps the discussion was on silicon investor, raging bull, or one of those sites. It was quite some time ago.

    This concept has been oft discussed in the very long term of SDARS. Implementation of such a plan needs to be viable from a business standpoint prior to implementation. To really be a sucess, large numbers of people need to acceptable to paying for radio. In other words, the free service is great, but the subscription business needs to support it.
    Tyler Savery
    Satellite Standard Founder

  6. #6
    Newman is offline
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    I will mention that I have personally spoken with Tyler about this issue over a year ago. He is correct in saying that it is not something that is totally new. Perhaps this is an upgrade to the patent? Im not sure, and do not have the time to look back. Perhaps looking at the name that this patent is under and looking for others in his name would do the trick. But it has been something that has been out for a while.

    The fact that they are working further on the patent is a huge indicator as to where they plan to take SDARS in the future though, and I am all for it, as a listener and as an investor.

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