Urban Unrest

20 February 2007 | Business | Ernesto Aguilar

Yesterday, XM and Sirius satellite radio networks announced plans to merge. Although many obstacles lie before such an occurrence, this could be positive for public/community radio for a few key reasons.

1. The merger will potentially shift public perception of satellite radio among consumers, and remind them of the value of terrestrial radio.
Public/community radio has been fighting a losing battle against satellite radio when it comes to mindshare. Never mind the reports that satradio has been bleeding money for years. The high-profile bidding wars for personalities (Howard Stern, Oprah Winfrey, Eminiem) and slick marketing has generated reams of great press for satellite radio. And, certainly, though the product is enticing, plenty of people (not the least of whom are public/community radio outlets, which subsist on the listener support satradio theoretically takes from) have wondered how long this model can really last. Though it’s true satradio’s seen gains among listeners, those numbers have not outpaced costs, as recent financial filings show. The next year of press for satellite radio is bound to be much tougher than what XM and Sirius have been subject to in the past, and you can expect consumers will notice that. Public/community radio’s balance of programming, diversity (especially among smaller stations) and community draw put them in a more solid, though not as sexy, position to recoup listeners enthralled by satellite radio’s promises.

2. A merger inevitably means programming changes.
I talk to XM listeners who love its programming mix. Same as Sirius customers. You can get AAA, Salsa and New Age 24 hours a day. The issue they face, not unlike what public/community radio faces, is one of programming marriage: people wedded to particular programs will blanch to change. Public/community radio’s benefit, arguably, is selling the idea of its existence, rather than whether Dana Dane hosts your old-school hip-hop channel. Can a merged XM/Sirius financially sustain two alt-rock channels, two comedy, six hip-hop channels, etc.? It’s doubtful (given the financial struggles over the years, the merger wouldn’t be on the table if not for tough money matters). That noted, public/community radio stands to gain folks who will defect after program changes. XM and Sirius aren’t Clear Channel, which can afford to try boutique formats as a way of testing for new audiences. The changes they make will impact their bottom lines, and you can expect changes will be made based on what listeners can be gained and what listeners financially don’t make sense to keep. Who you see on XM and Sirius and who defects to NPR or elsewhere will be a source of speculation. Public/community radio, with its hook of no commercials, will inevitably gain from a pool of listeners who won’t be as excited about paying $20 a month (actual combined rate hasn’t been announced) for programming that changes from when they signed up.

3. HD’s X factor
I disagree with some people who say HD will go nowhere. As HD format becomes more open (and the proprietary codec will have to change for it to grow), digital radio offers an intriguing alternative coming up fast. Faced with uncertain press, XM and Sirius will need to take HD more seriously. It’s got big federal money behind it, doesn’t require a subscription fee, has equipment whose costs are nearing what satellite radio charges, and has a killer viral advertising format in the commercial stations people already listen to for news and music. Many public/community stations, like KPFT, are adding digital radio channels now, and commercial radio’s adoption will be key in how satellite radio fares.

Of course, regulators may take down the XM/Sirius merger before it happens, but it’s not all bad. Thoughts? Share a comment.

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