The Future of Sirius XM and The Internet
When Sirius Satellite Radio and XM Satellite Radio merged into Sirius XM Radio, few people noticed that the word “satellite” had been quietly removed from the new company’s name. Ironically, the founder of Sirius recently made headlines in stating that Satellite Radio had missed its opportunity and that streaming free Internet radio represented the future. She may prove to be right for the wrong reasons.
“Free” Internet radio as well as terrestrial radio for that matter first have a huge hurdle to overcome in the way of performance royalties. By their own admission, this “industry” which made a total of 75 million dollars combined in 2008 will fold if it is forced to pay rates similar to what Sirius XM Radio already pays. Internet radio seems to forget that it made that money using products that it did not create and that it does not own. Its sense of entitlement when it comes to pirating the works of others for its own gain is mind boggling, and that is why it’s heading to court.
When the dust settles, Internet based radio stations will be forced into adding more commercials if they wish to continue operations. Terrestrial radio is already proving that radio advertisers are few and far between. Which leads me to challenge those who would doubt Sirius XM’s future.
In recent weeks we have learned that Sirius XM has plans to bring its subscription based service to electronic devices such as the iPod and iPhone. We have seen the company raise both the quality and price of its own Internet service in advance of this, citing royalty rates as the primary culprit. A new promotional event this weekend underscores the company’s desire to expand itself via the Internet. It appears that Sirius XM is quietly preparing for the demise of free Internet based services, and positioning itself to be the first choice of Internet radio users worldwide.
Position: Long Sirius XM
…Internet radio seems to forget that it made that money using products that it did not create and that it does not own. Its sense of entitlement when it comes to pirating the works of others for its own gain is mind boggling…
What an outrageous, inflammatory and factually inaccurate statement! Wow. That sentence alone discredits your entire story. Shame. Internet radio *does* pay royalties.
So there’s no piracy involved, and the notion that airplay does not also advertise the music and entice people to buy CDs and attend concerts is also questionable. You really should get better information before making allegations about things like piracy.
What *is* true, is that the royalties for internet radio are unfair. Let me illustrate…
Let’s say a group of 1000 people listen to music on a radio station 24 hours a day for the entire month of May, 2010.
To pay the RIAA/SoundExchange for those 1000 concurrent listeners all month long, under the rate structure as it stands right now, a radio station would owe:
$0 – if the radio station is FM/Terrestrial
$700 – if the radio station is on Satellite or Cable*
$19,152 – if the radio station is Online**
*1000 people each paying $9.95 a month subscription for the music channel, 7% royalty rate
**$.0019 per song, 14 songs/hr, 24hrs/day, 30days/month, 1000 listeners
The issue that’s the focus of disupte for Internet Radio isn’t whether or not to pay royalties. They do. The issue is the RATE, and whether it’s fair to make them so much higher than they are for other broadcast methods.
Rah Rah Rah!
Guess what? Launching a satellite into orbit is expensive. And it’s not a good way to distribute content. We know this. Even Sirius is dropping the “satellite” in its name.
You people should sell now. Get out while it’s still higher (higher than .09cents that is). Ipods, Pandora, Slacker, AOL Radio, Slacker, LastFM are all looming.
The toothpaste is out of the tube…you can’t put it back in! Face reality.
But, when is the case going to be closed? It could take forever – just like everything else, the iPhone app, etc…
They can’t get it together! and it’s really under my skin!
Get it together Sirius! We are tired of waiting, and waiting, and waiting….
This could be tied up in court for years, unless someone tells me different. The merger took only 1 1/2+… and if I remember, everyone thought that was going to happen “soon”, as well.