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
    spam, 17 Feb 2006 @ 9:44pm

    Re: Too many limitations

    WTF?

    "right? Wrong... add another receiver, and see a big jump in monthly service fees, despite the fact I would never use both receivers at the same time."

    Hrm. I pay an extra $6 for my extra receivers. I have an Alpine unit in my car and a Kenwood unit in my office. My girlfriend has a unit in her car too. Not really a big jump in service fees overall.

    "Also, people who have sat radio have told me it cuts out at times due to interference."

    Yeah, usually because of overpasses or streets that have thick trees on both sides. But I spend a lot of time outside of urban areas and it's *amazing* to have. Sirius is fantastic to have on long drives & camping trips.

    "If there were a buffering capability that allowed a way to minimize noticable disruptions and also allow repeating a song, pausing, etc. the service would be more attractive. And if I were a fan of a talk show like Stern I'd expect the ability to record it for later playback at a time that is convenient for me."

    You can do all of those with the Sirius S50.

    "Pay more than $100 a year for radio in the car that I can't control in any way except change channels, and can't enjoy anywhere except in the car?"

    I enjoy mine outside of the car. To have that many channels of ad-free music, it's well worth it. The playlists on Sirius are great. I hear more new bands on Sirius than anywhere else.

    "subscriber bases enough to stay in business, they need to make their services far more attractive, not limit their usefulness and convenience."

    They're not limiting them. Maybe one day the price will drop a bit, but come on, don't be such a cheap bastard. If you want to save a whopping $12/mo (which you'll probably blow at Starbucks anyway) and deal with mp3s and standard RIAA-infested FCC mandated radio, go ahead. But millions of us have gone the other way, and we like our Sirius units.

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