Terrestrial Wants Chipsets In Cell Phones – How SIRI and Pandora Would Be Impacted
Here at SiriusBuzz we cover satellite radio as well as the entire radio sector as it relates to Sirius XM. We feel it is important to keep our finger on the pulse of what is happening across the entire audio entertainment landscape. Last week we reported that a groudbreaking deal regarding terrestrial radio and royalties was edging closer to a decision. Some time has now passed, and terrestrial radio companies are busy debating the merits of the proposal that would have terrestrial radio paying performance royalties for the first time.
It appears that many terrestrial companies are okay with the proposed royalties, and that the real sticking point is not that fee, but rather the inclusion of terrestrial, and perhaps even HD radio chipsets in cell phones. Thinking more deeply, it makes sense. Cell phone users now rely on on the Internet and their data plans to listen to music whether it is Sirius XM, Pandora, Slaker, or a terrestrial radio stations on line feed. The royalties for that type of listening (Internet), are more substantial.
If terrestrial radio and HD Radio are successful in their desire to have chipsets included, it would give consumers a literally free alternative that does not put a dent in data usage. Of course the cell companies are not obligated to include these chips, but with constraints on networks, it could be in their best interest to do so.
The impacts of such an event would cross all other radio companies on smart phones. Sirius XM, Slacker, Pandora, etc. would all have to compete with easy to stream local terrestrial radio stations, which because they are delivered over the airwaves and not the data stream would be paying less in royalties than other audio entertainment services even if the new royalties for terrestrial happen.
If the concept seems far fetched, think again. There are already cell phone, like the Nokia N85, that are capable of streaming FM radio. The Nokia is able to deliver FM radio 87.5-108 MHz with the use of a wired headset . The inclusion of terrestrial radio does have limitations. You can get only local stations, and relying on a headset to act as an antenna has challenges, but new developments happen all of the time, so improvements could be on the way.
The royalty deal is still far from certain, but the pathway has been constructed for the framework of a deal. What is most certain is that the audio entertainment landscape will continue to evolve, and the players involved will constantly have to jockey for position.
Position – Long Sirius XM Radio
Spencer, whats the word on business signing up for sirius/xm and have you heard anything about new dj/talk/content signings? I was wondering if Howard would be involved with finding new talent? Sirius/xm idol? I can think of some real talented personalities/ideas but my guess is the budget gets in the way.
What would it take for Sirius to use phones as a portable receiver to pick up their sat. signal without data usage. Do I hear Sirius 2.0 phone and sat. receiver? Work out same deal with phone co. as with OEMS. Am I reaching hear?
Without powerful tower repeaters all over the country the cell phones with new chipsets would not be able to pick up indoor the relatively less powerful signal directly from satellites. Stand under a good sized tree with your portable satrad receiver and the signal will drop out within a few seconds. Cell phone towers are quite powerful and can send a signal that will penetrate walls. etc. Same goes for AM-FM transmiters. Satrad was primarily designed for automobile listening or at home recption with an outdoor antenna that has a clear line of sight view of the satellites.
The problem is there is nothing worth listening to on terrestrial radio, atleast where I live. FM plays mostly music that is programmed to appeal to the largest audience, mostly pop and urban. AM is mostly talk, some good, some bad, mostly good for listening to to put you to sleep.
Basically we are two steps away from terrestrial radio. Step one was satellite radio where you could listen to limited appeal genres, that could not support a station, eg classic alternative. The second step away from terrestrial radio was internet radio, such as Slacker, where you could, for a reasonable fee, get limited appeal genres, commercial free, customizable music. Even their free service is superior to terrestrial radio.
I will not listen to terr in the car and I sure in hell do not want them on my cell phone- actually I would rather have no radio then terr radio.
Doesn’t seem like a royalty payment. Seems more like them buying their inclusion into cell phones. When did this become “Let’s make a deal”? Terrestrial……you owe royalties. The end.
Sirius XM pays royalties and what did they get?
Personally I think terrestrial’s days are numbered. Rather than continue to “fight” an uphill battle it would make more sense to me for them to “partner” with satellite radio and provide “local content” for distribution on satellite. They would become an “affiliate” of the Sirius XM Network and they could negotiate a shared revenue split between local and national ads for the local “talk radio & sports” content. Music wouldn’t be necessary because Sirius XM already provides this superior service. Therefore, costs are reduced and the business model changes for local stations. At least they would have alternate distribution and maintain relevance locally. Thoughts anyone?
As I recall it local terrestrial radio stations must submit a form to the FCC listing what their proposed station will do for the local market. This is repeated every year. They simply can’t say that they will be playing syndicated programming from Sirius-XM all day. I don’t know the percentage of local programming they must carry, but 50% would not be out of the question.
When FM came on strong in the late 50’s or so everybody thought that it would be the end of AM radios. A lot of them did jump ship to FM, but many stayed with AM and focused their programming 100% towards local affairs. Our home town radio would have the hospital report every couple days and list everybody who was admitted into the hospital. Absolutely no privacy. Also, the weekly court report listed everybody who got a traffic citation. That’s how my father found out that I received a speeding ticket. Life was tough in that small town.
Bottom line it that terrestrial radio as we know it will always have a presence, but their numbers could decline somewhat in favor of new technology.