Satellite Radio Not Taking Off

XM Satellite Radio Lays Off 80

Strapped with mounting programming costs and limited financing, XM Satellite Radio Thursday said it had laid off 80 of its 480 employees and is seeking additional financing in order to fund the start-up company beyond first quarter of next year.

XM and Sirius Radio are great ideas but their business models are threatened by the recent announcement of a technology that will enable terrestrial radio stations to broadcast digitally as well. Of course, the terrestrial stations will, unlike satellite radio, still have commercials but they will remain free.

Also, it seems as though manufacturers could have done a better job with the consumer equipment as well. Do you really want another box in your car? Why can't they integrate XM or Sirius into the chassis of the existing AM/FM units. Would it be that hard? Maybe they have, I just haven't seen them yet. Then, there's the subscription fee. While it's "only" about $10 per month, there are so many "only $10" services for consumers to choose from. This one apparently is not enticing enough.

As with the slow adoption of fee based Tivo-like services, it would appear that consumers, aside from premium cable, don't want to pay for entertainment they have always had for free. They'll just suck it up and wait for the commercial break to end.

by Steve Hall    Nov-15-02   Click to Comment   

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