AT&T Wants To Charge For Data – Slacker Has An Answer – What About Sirius XM or Pandora?
The news sent ripples through the cell phone community, not just AT&T and their iPhone users. They all have great phones with awesome capability. You can use apps to do everything from basic calculations to editing photos, but it is the data that is so meaningful to many smart phone users. The ability to get on the Internet from anywhere is something that attracts many to upgrade to smart phones such as iPhone and Android.
AT&T recently announced that they are planning on phasing out unlimited data plans. For many this could be a major concern. Especially those that like to use Sirius XM, Pandora and Slacker. Streaming music is data intensive, and if a user does not have an unlimited plan, there is a danger of having to cough up the equivalent of a mortgage on a cell phone bill.
The announcement by AT&T could be followed by similar announcements from other carriers. What are those that stream music going to do? Well Slacker, a competitor of Sirius XM Internet Radio and Pandora has already developed a solution that will deliver the content people want while taking it easy on data usage.
Slacker has announced that they have completed a version of their app that allows for station caching. This allows users to listen to their customized Slacker radio channels through memory on the device rather than streaming. Users can easily update their channels for fresh content when they get into wireless areas, and then listen to hundreds of songs later on without chewing up their data plans. Slacker basic is free, but users will need to use Slacker Premium to take advantage of caching. Slacker premium is priced at $4.99 per month. Slacker’s caching apps have been available on Droid and Blackberry since February, and just recently became available on iPhone. The $4.99 charge will likely be minimal when compared to streaming live for a fee from the cell carrier.
Pandora, one of the most popular music service apps is likely equipped to offer something similar. The way they run their business model should allow station caching to work for their apps as well. The interesting question for satellite radio investors is how Sirius XM can accomplish something similar. Currently Sirius XM’s Internet Radio business does not allow for customized stations, and there is no caching ability at all. Sirius XM may have to shift gears if data streaming becomes cost prohibitive for cell users. At a minimum, the company should be developing a strategy to deal with this issue.
Whether satellite radio fans want to admit it or not, Pandora and Slacker do have some advantages over satellite radio. I am not saying they are better or carry the same depth of content, but certain advantages do exist. Customized channels is one key feature that users of these services really gravitate to and like. The costs of the services are a lot less than Sirius XM, and because of that Pandora and Slacker carry a large appeal to the younger and often more budget conscious crowd. This builds bran loyalty for Slacker and Pandora users. If Sirius XM is already perceived as more expensive, the additional costs to stream that content because of costly data plans could exacerbate that situation.
More costly data plans do not impact only Pandora or Slacker. They impact any company that offers streaming content. Sirius XM Internet Radio is included in this crowd. Slacker has developed an easy solution to offset the impacts. Pandora can likely do the same. The question for Sirius XM is how they will react to these new cell phone pricing plans to minimize impact on their business.
Position – Long Sirius XM Radio
I listen to recorded (cached) music and other content, like Stern, every day on my Sirius Stiletto. Sirius XM has had this solution for a few years.
I don’t have a Stiletto, I have an iPhone, now what do I do? Not to mention, I don’t think they even sell Stilettos anymore.
I have yet to meet, or know of, one single person that uses their phone/smartphone to listen to music.
Tucker, are you serious? I know a ton of people who use their phones to listen to music. I do myself, quite often.
I think the biggest obstacle for Sirius Xm in competing for bandwidth is that all the broadcasts, including music, are live. Most people with smart phones are only in a wifi area for limited amounts of time, unlike 3G or satellite. The Internet radio systems generate playlists instantly and catered to specific tastes. The only way this would work for Siriux XM is if they allowed a cache of shows that already played. That’s not a great solution for talk or news radio, but it would work for music at least.
The reality is that services like Pandora and Slacker are gravitated to by a younger audience. There is an appeal that these services have that Sirius XM simply does not match in the Internet radio business. Customization.
When the Internet Royalties went up, it was the one point that services like Pandora and Slacker had the biggest potential of going down in flames. I wrote about that when it happened a couple of years back (https://siriusbuzz.com/pandoras-box-may-be-closing.php).
Since that time both Pandora and Slacker have grown substantially and become stronger. Pandora limits free use to 40 hours per month, then charges on $0.99 cents to go unlimited each month.
Pandora survived because it reached a new agreement on royalties. Today is boasts 48,000,000 users who listen an average of 11.6 hours per month.
The new data plans simply make companies like Pandora, Slacker, and Sirius XM adapt yet again. Slacker has proven that they can adapt. Pandora will certainly follow suit. The question is can Sirius XM do the same with how they currently offer their content.
Pandora is going nowhere. With 48 million users, they are too big to go down on this type of news. Their biggest risk was two years ago, and the company mitigated it
I am a SiriusXM subscriber. I should be able to listen to whatever station that I want to when I am not in my car. We do not need this caching technology. Sometimes a song comes on that I hate, so I change the channel. It would be difficult to change a cached channel. If AT&T wants to go back in time and fix their pricing structure, they should go all the way back and make the iPhone available without DATA plan. Then, I can have the phone I want without their inadequate plans. It would be better than paying $15 to do nothing FAST.
yea 48 million subs is almost 3 times more than xm radio subs. I also believe that this is comparing to the fast food world. mcdonalds ruled with its $1 dollar menu and everybody gravitated for it. Pandora $1 buck after 40 hrs??????thisis stupid cheap! who wouldnt….but Xm is like the IN & OUT burger, All fresh, new material everyday and it comes at a premium price. you get what you pay for. the thing is their is a niche for everything and it seems SMARTER, more educated people take on Xm;sirius, ect….talk, news, stocks, radio shows. wah wah wah. n the low budget folkks just want the tunes to keep them from pulling their hair out in traffic….this jus my 5 cents….RiCk Jr