Sirius XM Holdings’ Product vs. Terrestrial Radio

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Table of Contents

Introduction
Sirius and XM
Principles of Success
Connection with traditional FM Broadcasting
Sirius XM vs. Spotify
Conclusion
References

Introduction

Satellite radio is an early 2000s development and is defined as a broadcasting satellite service. Such services disseminate information by transmitting a signal through space stations. Considering the extent to which this type of transmission increases the scale of the signal, it is not difficult to imagine the demand for Sirius radio. Such satellite radios are usually intended for drivers of cars and other motor vehicles. Their main advantageous difference is expressed in a higher signal transmission strength compared to terrestrial radio, where the signal is still inside the Earth’s atmosphere.

Sirius and XM

Sirius and XM really made a splash, changing the idea of technological possibilities when listening to music and transmitting information. Sirius satellite radio was launched not only in the US but even on the Baikonur space station in Kazakhstan, making coverage even wider. First of all, this radio did not receive much coverage, but during the 2000s, Sirius began to infiltrate the American media space at the corporate level (McLean, 2001). The largest automotive corporations sensed the possibility of profitable mutual integration and invested hundreds of millions of dollars in order to install satellite receivers in new car models. It can be assumed that the principle of large-scale investments at the multi-corporate level worked in this way – this phenomenon, with such support, could not but revolutionize the media space. The actual one-time contribution was also beneficial in order to make a technological breakthrough – after the installation of satellites and the launch of new machines for mass production, Sirius required significantly less financial support and recouped the money invested.

Principles of Success

Sirius and XM Satellite Radio were the first satellite stations to challenge traditional radio. Their principle of success was diversity, quality of access provided by a moderate monthly fee, and the possibility of choice. The eclecticism of satellite radio is reminiscent of the great possibilities of cable TV – the analogy is apt enough, given the temporary furor created by cable TV around the same era. XM Satellite Radio not only provides music from over 70 channels, but also broadcasts news, sports, comedy and drama, and talk radio. For larger market areas, for example, for large cities, weather and road conditions are additionally broadcast. However, the range and accuracy of satellite radio extend beyond mere entertainment or even business. This company provided a separate service for data exchange between pilots and meteorological observers. A separate advantage of XM radio over other radio stations was the expanded launch of talk shows at the beginning of the 2000s. Opening specials for such stars of American pop culture as Oprah Winfrey or Howard Stern could not fail to attract a lot of attention from the audience (Jacobs, 2020). In the zero years, the company entered into a number of contracts not only with motor, but even with spacecraft manufacturers, which indicates the rapid growth in the use of this technology.

Connection with traditional FM Broadcasting

At the same time, the commercial benefit of XM additionally lies in the admission of radio stations from the terrestrial coverage to its roster. Contracts with Salem Communications, the largest platform for the production of family and Christian content, and Spanish Broadcasting, could not fail to bring tremendous demographic coverage to satellite radio. The merger of Sirius and XM Radio into a single company gave them a chance to level mutual financial miscalculations and collaborate in order to continue to challenge ordinary radio. These companies did not so much mean the death of traditional radio as its evolution into a new, more fluid and elegant form. The danger of SiriusXM for standard radio lies in the similarity of the principles of operation, but the lack of advertising and the breadth of the signal. Because of this, an older male audience, who often travels in cars, prefers this format and is ready to pay for it. SiriusXM takes into account the ability to interact with its system everywhere outside of cars – so Sirius uses aggressive marketing tactics. The company is acquiring podcast producers on a massive scale, including the recent acquisition of growing online streaming service Pandora.

Sirius XM vs. Spotify

The main difference between the types of playback and financial models of Sirius and Spotify lies in the principle by which the listener selects the music played. In the case of Sirius, the listener has access to a large number of radio stations and podcasts, quite accurately calibrated to suit various and most sophisticated tastes. However, at the same time, the listener refuses the need to constantly choose the listening experience, thus preferring the already prepared audio program. This seems all the more justified in the context of the needs of radio on the road, where a pleasant surprise and guessing the mood of the listener is valued more than the ability to constantly select a single song and compile an individual playlist. Although the main issue of the presentation is the pressure of broadcasters such as Sirius XM on traditional forms of radio broadcasting, the very viability of this new type of radio may also be called into question. Modern era streaming services such as Spotify pose a major threat to Sirius. This conflict of interest is further highlighted by comparing the stock of this company with new players in the music broadcast industry (Darwin, 2021). Sirius XM’s share price has grown very little compared to corporations such as Apple Music and Spotify.

Conclusion

However, for a number of reasons, this company is unlikely to be completely ousted from the market in the near future, since it offers a number of unique services and perks. Free, ad-supported streaming services are certainly gaining popularity, but it’s undeniable that there is a large segment of people who want to listen to music for the full experience. Sirius at a reasonable price offers the opportunity to enjoy music without interruption, which attracts listeners. However, it should be noted that the free services of Sirius are not profitable for the company, and they receive most of the money from full-fledged subscriptions, which, by the way, the company focuses on. Sirius XM earns approximately $149/year from each subscriber, which only indicates the staying power of this phenomenon.