Have You Noticed It's Costly To Run A Bunch Of Satellites? XM Has...

from the ain't-so-easy dept

From the very beginning of satellite radio, I was skeptical of its potential. While I admit I was wrong about the number of people it would appeal to, my bigger issue was with the cost structure of the business. Launching and maintaining satellite is extremely expensive. Just ask anyone who worked on Iridium or Teledesic. Even if you can sign up a lot of users, the capital costs are tremendous. If the costs of getting those subscribers is high, then it's a definite recipe for trouble. So far, Sirius and XM have been able to keep kicking, mainly through a ton of investment money and the promise of future potential profits -- stacked up against continued losses. It looks like a few are finally doing the math on all of this and realizing that the satellite radio business, as much as some people like it, may not be sustainable. XM posted wider than expected losses today, blaming higher than expected customer acquisition fees -- suggesting that, for all the good press, not as many people as expected have been rushing to sign up. Also, one of the company's directors resigned, citing a "crisis on the horizon," which is anything but inspiring.

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  1. identicon
    woodhead bitwrangler, 17 Feb 2006 @ 8:03am

    Re: Why should we pay for radio?

    If you enjoy listening to ads, searching for a channel actually playing something other than a commerical, or having your content decided for you by Clear Channel and a couple of others, more power to you.

    I'm rather enjoying spending a little over $10 a month for 60+ channels of commercial free music, unedited talk content, the BBC, several varieties of NPR, NFL and NBA games live with the choice of which team's announcer I want to listen to, &c. Plus most of the channels are streamed over the internet. And regardless of whether I'm traveling, at home, commuting or out at the cabin 50 miles from the nearest FM station all my favorite channels are available to me.

    For less than $200 I bought a unit that works in both the house and in the car, buffers up to an hour of audio with a rewind, fastforward, pause feature, alerts for favorite artists or songs playing on different channels, alerts for favorite sports teams games and scores, and a builtin FM transmitter.

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