Jacobs Media Says Pandora A Threat To Terrestrial Radio
Jacobs Media is traditionally known as an organization that caters to mostly to terrestrial radio. They do however tackle other things as well, including some interesting data that became part of the fodder during the merger process of Sirius and XM Satellite Radio. Recently Jacob’s conducted a survey of more than 26,000 rock radio listeners from around the country, and one of the results was very interesting.
In their data, Internet radio provider Pandora is King of the online listening hill. Now before I get bashed away for daring to write about Pandora on a satellite radio site, let me clarify my stance. Pandora is a service that has many subscribers. While some may feel that it is dead or dying, the facts prove otherwise. To ignore it because it is “competition” is a fools exercise.
Fred Jacobs states, “As I have pointed out over the past several days, Pandora demands our thought and attention, just as MTV did in the ‘80s, and satellite radio did in recent years. Radio does not exist in a vacuum. In simpler times, it really may have been about WLS versus WCFL. Today, broadcasters need to grasp the broader realities of media consumption and consumer needs and wants in an environment of seemingly infinite options.” I could not have stated it better myself.
So what did the survey tell us, and how should satellite radio react?
Of those who listen to Internet radio, 37% tune in Pandora. That represents a continued growth for Pandora, not an eroding market share. This is important to Sirius XM because Sirius XM also offers an Internet Radio service, and as more and more of America get smart phones, the services for radio on those phones will all be competing for listeners.
The article and survey are interesting and compelling. Many people seem to enjoy Pandora more than terrestrial radio, and their overall satisfaction for the service is high. If you are invested in satellite radio, set aside your undying loyalty for Sirius XM for just long enough to read the Jacobs media details and understand it. You are much more informed by understanding the media landscape than ignoring it or pretending that it will fade away and die. There are lessons in this survey for Sirius XM as well.
[via Jaco Blog]
Position – Long Sirius XM
Hmmm, I just may have to give that Pandora a try. What channel do I tune in for the Howard Stern Show?
Speaking as one who sold business systems for a few decades, what is lost in this discussion is the user friendly aspect—turn on your sat. radio and punch the button of the station you desire——no getting an internet connection (not always available), user names and passwords.
Additionally, SiriusXM is a comprehensive media product. Pandora and other internet music is a limited service.
J Cain you make a good point and it relates to one thing I have thought for years-
Sirius or any other radio company will only be able to dominate if it is built into a majority of cars. NOBODY wants to put a radio in the car! EVERYBODY wants the radio already there. Just push a button.
It is one huge advantage for Sirius and Terrestrial radio over internet radio.
Have you guys seen that Pandora is working on getting its services into car radios? The first service I’ve seen is MSFT Sync in Fords…
Some good points Spencer. I was thinking about this topic last week. Sirius/XM have a defined market with barriers to entry because of their satellite network. The internet space will be fragmented among the other players. Slacker and Rhapsody will compete more directly with Pandora than any will with Sirius/XM. This may change in a few years if the wireless bandwidth issues get addressed. For now, however, Sirius/XM has mountains more in FCF than any of these other companies will have for a long time. This cash can be used to build out their internet offerings. Perhaps Sirius/XM will include a Rhapsody type service in the future. It may or may not happen, but the interesting thing is that Sirius/XM can easily enter the competition’s space. The competition, on the other hand, cannot compete with satellite radio.
I thought the Supreme court decided this, that the ISP can limit bandwidth hogging services as the please.
In the end, content wins in media. Always. 100% of the time. How can Pandora afford to buy content if they make no money? How will they make big revenues in the future. Subscription? Advertising? I seriously doubt they will ever make big revenues.
Internet radio has been around since the mid 90s. There are hundreds of thousands of internet radio companies out there. Not one has found a good business model yet.
Sirius must put Howard on the apps and blow Pandora out of the water. It is imperative.
If Howard re-signs or maybe ventures out on his own!