Satellite radio: Waiting for innovation
The announced merger of the two US satellite radio services, Sirius and XM, has resulted in much ink about the likelihood (or not) of US FCC approval of the merger and the merger's impact on service prices for consumers.
Much of this coverage misses the point: In an era where many businesses are succeeding in what would previously be considered niche or unprofitable markets, why has the emerging satellite radio industry remained, well, still emerging?
To recover the high cost of customer acquisition, companies must retain customers for some time. And to retain these customers, they must offer something new of value. Customers who signed up for these services may have originally done so out of curiousity and 'cool' technology factor. However, at some point, unless the companies offer newer services that are better than the original, they risk losing customers to substitutes such as MP3 players and radio.
I've considered subscribing to a satellite radio service in India to be able to listen to, say, NPR or a good jazz station. But what I would really like is to have a single platform on which I can listen to music or programming from a selection sources, perhaps 3-4 radio stations from the US, 3-4 radio stations from Bangalore, combined with what's on my iPod. And, I want to be able to listen to this whether I am in Bangalore, San Francisco, or London. Whether I'm in my home or in the car.
Now, that, would a service I wouldn't mind paying for and keeping: a combination of device and service that makes my personal favorites available to me whereve I am. Sort of a 'radio-berry' for my personal broadcast and owned music.
Unless the satellite radio (and digital music-player) industry innovates to offer new better services, customers are bound to figure out that all they are paying for is yet another silo-ed cool technology. That may have been enough a few years ago. But not in today's flattening world.