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People don’t like to be told when they can consume their content, whether it is television, radio or news – busy lifestyles rarely fit the schedules of such inflexible broadcasts. Now I’m not saying live content is dead. I don’t know anyone who would want to watch the Superbowl days after, or listen to a news broadcast from last week.
Competition for our attention is growing; free internet content is readily and easily available for consumption on cell phones and portable devices of all types. The only problem with all this free content is, well… most of it is poorly produced crap, or recycled content. This will not be the case forever and the shift has already begun, more and more professionals are turning to the internet for its freedom and ease of delivery.
Sirius XM Satellite Radio was nearing bankruptcy in February 2009; Sirius’ stock price had dropped to an all-time low of $0.05 per share. Sirius was, however, able to get emergency financing, some $500,000,000, from media mogul John Malone, who took a 40% equity stake in the company. A good band-aid but Sirius XM Satellite Radio and their contract with radio personality Howard Stern is about to expire within weeks. Will re-signing the “king of all media” alone be enough to save the company? Doubtful.
The problem I see with Sirius XM is that it’s a flat subscription service. In this internet age, content is king and although the company does have a variety of quality programming – they are not maximizing its financial potential. Sure the service provides 120+ channels, but if you’re only interested in the talk channels, only the sports channels, only the music channels.. or only 1 or 2 channels is it worth it for most consumers to pay the full subscription price? No matter how great the overall value of the service is, for most the answer is no.
I compare it somewhat to the music industry which was built on the album sale. A band could have one hit song on their album and you’d be forced to pay for an entire album. I say forced, because there was literally no other (legal) option. Without an alternative, many would give in. Sure, there would be some people who loved the band completely and were happy to pay for the whole album. Fast forward to now, the music industry in its new digital form you see people mostly buy singles and only purchase entire albums for their favorite artists.
Instead of excluding those potential customers who only want a select few shows or channels, why not offer individual channel subscriptions? Take it another step, offer subscriptions to individual shows. If the only show on Sirius XM I like is the Bubba The Love Sponge show, why not allow me to purchase a subscription to just this show streaming via internet or as a daily downloadable episode. Podcasts are popular, and people will pay for quality programming. There are a lot of quality daily talk programs on Sirius that are currently only available live at a specific time.
The corporate bigwigs running things at Sirius XM need to realize, exclusive content is worthless if consumers don’t want it in the form you’re delivering it. Most people will not pay a $15/month subscription for a single show. Howard Stern is the exception, not the rule. Howard Stern doesn’t need Sirius XM — he could leave at the end of his contract and be extremely successful as a live/downloadable internet exclusive program. If Howard does leave, imagine the domino effect it will create. The truth is the quality content creators don’t need big corporations anymore. The internet is a delivery system available to a much wider audience than a radio or satellite signal. All they need is a strong following of dedicated fans and a small home studio. So what will keep other from leaving Sirius and setting up shop on the internet?
Sirius XM doesn’t have to stop selling radio hardware and subscriptions — start thinking of your company as a content provider instead of just a “satellite radio” company. Embrace the internet; stop trying to expand your channels selection in hopes of convincing people to subscribe. Instead let your individual content appeal to the individuals interested in it and give them the opportunity to purchase it without strings and schedules. Offer a fair profit sharing deal with the content creators and it’s a win/win for consumers and creators alike.
It’s time to move with the future or get lost in the stone-age.
