Google Getting Serious About Music – Sirius XM Needs To Take Note
In an interesting move that could have an impact on any music service globally, Google seems to be taking enough of an interest in music that they have brought on board music licensing attorney Elizabet Moody. In a story released by Billboards Antony Bruno, it is stated that Moody has been brought on board to spearhead negotiations with the record labels.
The news released still further speculation that Google may be in the midst of offering up a “cloud” based music service. The issue of cloud computing is something SiriusBuzz has been talking about both here and on our Satellite Radio News radio show. The important thing with cloud networks is that it makes the music and video files for services available from anywhere. This gives consumers more options on using and accessing their content on virtually any device capable of accessing the Internet, and storage capacity is not an issue.
If Google decides to make the move into music, they have deep enough pockets to do just about anything they want. With the hiring of an attorney that specializes in negotiations with the music industry, everyone in that space should pay attention. Google can impact everyone, and the scalability of music fees has gotten to a level that will make competition stiff. Moody is scheduled to start in August.
“It really has in just the last four years. When I started there was a focus on the first generation of services like the Napsters and Rhapsodys, which were moderately successful. The next phase was the ad-supported services like MySpace and imeem and Playlist that were trying to make a business out of it but were struggling to monetize. So I think the focus now is on how we can find a way to monetize the content without making it too expensive for consumers. At this point, consumers are not showing that they have any interest in paying for music, or at least not paying very much. Where it’s been going recently, it’s subscription models again, but it’s streaming from the cloud. The technology has advanced where we can do that now, and the price points have come down. The PC product is $5 and mobile is $10, so hopefully it’ll be more appealing to consumers.” – Elizabeth Moody
Google is not the only major player looking to work from a cloud based system, or speaking about subscription models. Apple, and services such as newly launched MP3Tunes have also jumped into the game. Already, existing services like Pandora and Slacker come in at less expensive price points that Sirius XM. If bigger players hop into the category, it will mean an even more competitive landscape.
Googles Android Platform has made huge strides this year in the smart phone category, and it appears that they want to deliver even more than just a slick operating system to consumers with their phones. Initially the battle will seem to be between Apple and Google, but this battle will not only impact how we get our entertainment, but possibly much more. Satellite radio investors and fans alike need to watch these issues play out over the coming months. SiriusBuzz will keep you informed.
[via Billboard]
Position – Long Sirius XM Radio, No Position Google, Apple
Rising rates for unlimited data, and as Steve Jobs says “all wireless gets dropouts” exactly how does this compete with satellite radio in a moving vehicle? It doesn’t.
LOL….good one
satellite still has an advantage in reception, but they do need to be willing and able to shift gears with the landscape.
I use Verizon, and don’t get many dropouts at all
verizon stinks and so does at&t and so does sprint(as a matter of fact they all stink) Satellite phone from liberty coming soon ha ha ha!!!!!!!!!!!!!!!!!!!!
You need a “Transport” and that will be your major costs in the future. Data is going up, and the footprint of any nationwide full duplex system leaves little to be desired. Yes there would be dropouts of Biblical Proportions in today’s network. Cloud is the distant future as our entire infastructure would have to undergo a major overhaul for it to be successful.
Information such as this makes me stand on my soap box (showing my age) and keep yelling to a deaf crowd that Sirius Xm needs to utilize all there ammo (assets) to help keep them progressing forward in the digital audio entertainment etc. format. All sat. radios must serve a purpose! I understand that in new vehicles there is a certain protocol that must be followed by each of the car makers. But once that radio falls by the way side (I’m speaking of course of idle radios) I think it’s fair game or maybe more common sense to utilize this already paid for (SAC) hardware. It is the one part of the Sat. biz model I can’t understand or comprehend. I will keep posting this absurd (to most) format of offering a free (or close to)lowest tiered format w/ commercial sponsership,along w/ other tiers that offer a limited format at lower sub. prices than currently offered. Sirius Xm needs to appeal to the masses. It can have formats for all budgets. Why exclude anyone? Yes there are kinks to work out to make this a reality but so what, get them worked out and open the doors. Argue all you want, but this day is coming, with new tech. coming daily they better get people on board and start creating more brand loyalty.
Great content is a terrible thing to waste.
Neal ,
I am right with you . I am hoping that the reason that they have not started this already is that they are waiting for a certain # of Sat Rad fitted cars be on the road first to make the move making it a virtual success from the day that they announce it . That IMO is the only reason to wait as they have . But I also believe that the day that is coming very soon .
Eduardo,
I realize there is a fine balance to deal with between pricing content. Sirius does not want people dropping to lower tiers,that would no doubt be counter productive. But w/ that being said there is a market out there that needs to be tapped not just for revenue reasons but also to fend off the competition. It no doubt is a fine line to walk, but it needs to be addressed. Hopefully as the economy recovers the model of a lowest tiered (free) sponsor based option could do 2 things, one is to help generate advertising revenues and bring in the more of the younger, under 25 market. It would be on somewhat of a par w/fm format radio but it would also could be used to promote the idea of becoming a paying sub by educating the listener on what great content they are missing by not being a paying subscriber. I think people cringe (or swear) when I keep brining up these additional lower tiers but the more people listening to Sat radio would make the brand the mainstream audio provider not just for 19 million people but for 50 million in the next few years. Then I think this would only continue to snowball as the product gets more & more recognized for it’s most important asset,which is CONTENT. If Sirius Xm does not believe enough in their content to appeal and promote it to a larger audience then I stand corrected. But if they do they do that is the insurance they need to make these changes as they move forward. Again you have 19 million willing to pay for higher tiered content how many millions are left on the sidelines who would pony up for a lower tiered format (free would of course be the lowest) that fits into their budget.
Neal ,
That is why I believe that they have held off until they have enough vehicles out there already outfitted that are not buying the service . To make this really work you need to do it with volume or nobody will be buying ad time. If the cars are not on the road outfitted already it makes it a slow process . If the cars are already on the road and outfitted you have a big propaganda push and probably have a HUGE jump in subs immediately . And you would need that to make a free , ad sponsored tier work right off the bat . The bigger the # of cars equipped on the road the easier it will be to convince advertisers that they can get value for their ad dollars and the more we can charge for the ad time .
I would be surprised if Mel doesn’t have multiple studies already in his office telling him exactly how many Sirius equipped vehicles that are non subscribers he needs on the road to make this work effectively .
As I said earlier I think they are just waiting to get to that magic # before they go ahead with that plan .
IMO this is the way to go as it also weakens the competition (terrestrial) and takes them on in their own ballpark .
In a head to head I think we kick their ass !
Knowing Google they will offer this service for free and use advertising to pay for it. Eventually giving away everything for free is going to hurt our economy even more than it already has.
Always said think of SIRI/XM as ESPN. They should be at a big disadvantage to MLB…NBA….NFL…who all have channels…they have the eyeballs so they have the ability to pay the most for the content. Chicken or the egg came first…critical mass of customers gives SIRI/XM the advantage.
Although it’s important to keep your eye on the competiive landscape, I think it’s also important to consider that many of these companies can coexist. There is a market for satellite radio, and there is a market for on demand music streaming. Many people will see the need for both. Sirius is the only company that will be able to offer both under one roof. I hope they are working on it.
Just skimming through the comments here. The last thing Sirius should ever do is offer an alternative free service. That would cannabalize the growth of the subscription service. How many paying subs would downgrade? It’s a ludicrous business model. That’s why you never see them pushing their a la carte 6.99 plans. ARPU is key.
Concerning other internet based services – The car is Sirius’ game to lose. And that is where all the money is made in radio going back to beginning of radio last century. It will always be where radio makes money. And Sirius’ internet service is excellent and mobile. They just need Howard on it that’s all. Internet is a good supplement and that’s all it is. The business model for standalone internet radio is basically nonexistent and has been since it was created in 1994. Internet radio’s business model will never be good. The royalty boards made sure of that. That ain’t changing……ever.
Hey guys I have been away from the sat radio blogs for awhile dealing with so many family health issues. The SAAR numbers look excellent. Man I think we are going to breaking 20 million subs this year!
Do you guys remember in the 90s when AOL broke 20 million subs and they were conquering the world? People were talking about 50 million AOL subs one day. The huge mistake AOL made was they saw themselves as a tech company instead of a media company and never offered the exclusive content that you can’t get anywhere else. So they fell flat on their face. Cable and DSL took their isp business from them. Can you imagine if AOL signed Howard back then and just offered him on AOL radio or if AOL signed the NFL and took Monday Night football away from TV? They wold have been a juggernaut! Oh well, we know Sirius is all about content. They will never make the mistakes AOL made.
I really gotta get back to the Sirius message boards on the net. I have been so preoccupied. See you guys there.
If there is money to be made with cloud music, there are interesting possibilities. Uploaders could be paid too according to how much listens their songs get, along with royalties to owners. It could really come alive. Owners would need to accept user uploads, without being picky about exact quality.