Podcast NYC: MP3 Killed The (Satellite) Radio Star
In the last few weeks, the Podcasting community has grown by leaps and bounds. Press coverage has been ever increasing and the listener base is continuing to grow, along with the availability of content. Now comes word that Evan Williams, a founder of Pyra Labs (the folks who brought us Blogger), is starting a company called Odeo, The purpose of this yet to be launched venture is simple. They want to make a business out of podcasting.
The merits of podcasting as a "business" will be explored in a future post. What I'm really interested in at the moment is the affect podcasting will have on other new media outlets, specifically satellite radio.
The magazine Wired recently ran an article hailing podcasting as a serious contender in the battle for the ears of listeners who move away from traditional radio. And why not? Satellite radio has certainly arrived, not with a bang, but with a thud. Both players in the game, Sirius and XM, are losing cash by the bucketful. They've invested tens of millions on infrastructure (satellites at $2.5 million a pop), talent (Sirius signed Howard Stern for $100 million per year) and office space (Sirius has a rent bill in the millions). Both players have spent and spent big. The initial goal has been to gain market share.
Hmmm, this sounds familiar. New media companies spending big bucks to gain market share in the infancy of a new industry. Sound like 1999 to anyone? If you're not convinced then consider the rush of exuberance in the industry when the Stern/Sirius deal was announced. Upon announcement of the deal Sirius' stock jumped 100% in the next six weeks. XM's stock went up nearly 50% in that same timeframe. Both companies had announced a string of big deals where they would be paying for content, all in the name of wooing subscribers.
Then came the 4th quarter earnings reports. Abysmal would be a kind description of the results. Both stocks have slid back to near their Q3 2004 values and merger talks have been hinted by those in the know on the street. At this point the name of the game for both these players is survival. Usually survival means merger and/or reorganization so I think that a merger is very, very possible. But could these players still survive? Maybe, if it wasn't for podcasting.
You see, the listeners that the satellite radio networks are going for have competition for their affections. On one side, you have the satellite behemoths with loads of programming, monthly fees, commercials and expensive (and proprietary) hardware. On the other side you have a community of thousands (and quickly growing) creating free content that can be heard anytime on existing hardware.
So with satellite radio if you miss the broadcast, you missed it. How is that any different from regular radio? It's not. And you get commercials (on some channels) just like regular radio. And you have to pay extra fees (above the monthly subscription price) to get certain content. Is that really a good deal? Plus the receivers cost into the hundreds of dollars and serve no other purpose. Lots of fun, right?
The podcasting approach just makes more sense and could break the hearts of the people who have invested their lives into satellite. Think about it. Podcasting uses existing protocols and hardware, meaning no huge infrastructure outlays for people who broadcast. Podcasting uses existing hardware (computers and mp3 players) for reception. Users don't need to spend extra money on proprietary hardware. That's a HUGE draw for listeners. Plus, you can listen anytime you want. So you might need a bigger hard drive, but hard drive space comes pretty cheap and has multiple uses. Try to back up your music collection to an XM satellite receiver.
What podcasting is missing is reliable, professional content. The stamina and commitment of most podcasters is unproven as of yet, but that will change as more people get into the game. The quality of the content, while not completely professional, is pretty damn good considering that people are doing this out of their homes. And the volume of content is certainly impressive and continually growing.
After honestly weighing the pros and cons of both methods I have to say that satellite radio is on the ropes. They've spent way too much money to establish a space based version of regular radio, while podcasters have pooled together to create a land based worldwide network with almost no central investment. As people continue to kick in the capital (both technical and $$$) and creativity into the informal network of podcasting, more and more people will find the concept appealing.
If I were Howard Stern I'd start my own podcast or risk getting stiffed when Sirius (or the merged XM/Sirius) can't foot his huge paycheck.
The merits of podcasting as a "business" will be explored in a future post. What I'm really interested in at the moment is the affect podcasting will have on other new media outlets, specifically satellite radio.
The magazine Wired recently ran an article hailing podcasting as a serious contender in the battle for the ears of listeners who move away from traditional radio. And why not? Satellite radio has certainly arrived, not with a bang, but with a thud. Both players in the game, Sirius and XM, are losing cash by the bucketful. They've invested tens of millions on infrastructure (satellites at $2.5 million a pop), talent (Sirius signed Howard Stern for $100 million per year) and office space (Sirius has a rent bill in the millions). Both players have spent and spent big. The initial goal has been to gain market share.
Hmmm, this sounds familiar. New media companies spending big bucks to gain market share in the infancy of a new industry. Sound like 1999 to anyone? If you're not convinced then consider the rush of exuberance in the industry when the Stern/Sirius deal was announced. Upon announcement of the deal Sirius' stock jumped 100% in the next six weeks. XM's stock went up nearly 50% in that same timeframe. Both companies had announced a string of big deals where they would be paying for content, all in the name of wooing subscribers.
Then came the 4th quarter earnings reports. Abysmal would be a kind description of the results. Both stocks have slid back to near their Q3 2004 values and merger talks have been hinted by those in the know on the street. At this point the name of the game for both these players is survival. Usually survival means merger and/or reorganization so I think that a merger is very, very possible. But could these players still survive? Maybe, if it wasn't for podcasting.
You see, the listeners that the satellite radio networks are going for have competition for their affections. On one side, you have the satellite behemoths with loads of programming, monthly fees, commercials and expensive (and proprietary) hardware. On the other side you have a community of thousands (and quickly growing) creating free content that can be heard anytime on existing hardware.
So with satellite radio if you miss the broadcast, you missed it. How is that any different from regular radio? It's not. And you get commercials (on some channels) just like regular radio. And you have to pay extra fees (above the monthly subscription price) to get certain content. Is that really a good deal? Plus the receivers cost into the hundreds of dollars and serve no other purpose. Lots of fun, right?
The podcasting approach just makes more sense and could break the hearts of the people who have invested their lives into satellite. Think about it. Podcasting uses existing protocols and hardware, meaning no huge infrastructure outlays for people who broadcast. Podcasting uses existing hardware (computers and mp3 players) for reception. Users don't need to spend extra money on proprietary hardware. That's a HUGE draw for listeners. Plus, you can listen anytime you want. So you might need a bigger hard drive, but hard drive space comes pretty cheap and has multiple uses. Try to back up your music collection to an XM satellite receiver.
What podcasting is missing is reliable, professional content. The stamina and commitment of most podcasters is unproven as of yet, but that will change as more people get into the game. The quality of the content, while not completely professional, is pretty damn good considering that people are doing this out of their homes. And the volume of content is certainly impressive and continually growing.
After honestly weighing the pros and cons of both methods I have to say that satellite radio is on the ropes. They've spent way too much money to establish a space based version of regular radio, while podcasters have pooled together to create a land based worldwide network with almost no central investment. As people continue to kick in the capital (both technical and $$$) and creativity into the informal network of podcasting, more and more people will find the concept appealing.
If I were Howard Stern I'd start my own podcast or risk getting stiffed when Sirius (or the merged XM/Sirius) can't foot his huge paycheck.
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