With regular radio such a boneyard, some tips for the XM-Sirius blendAOK, the metaphor is played, but it's apt.
I love the choices, the variety, the specialty channels and the liberating lack of commercials. I can throw on a comedy channel and guffaw while passing motorists pass judgment. I can get news — actual hard news! — from a number of sources. Best of all, I can hear music: new and old, familiar and obscure, from prissy hipster to guilty pleasure. I even passed off my trusty iPod to my wife.
But I, like a few million others, have been in listener limbo waiting for news about the very future of satellite radio. Having hemorrhaged red ink for years, XM and Sirius proposed a controversial but potentially industry-saving merger in February 2007, and they've been sweating regulatory approval ever since. The Justice Department gave its OK in March, but the deal has been held up by the FCC.
As the panel drags its feet, sat radio nation waits. And waits. A potential break in the case finally came this week: FCC chairman Kevin Martin on Monday went on record in support of the merger and appeared to be pressing for a panel vote.
Opponents of an XM-Sirius link-up cry monopoly. How can there be competition if one company rules an entire industry? But this isn't about competition between two sat radio providers; it's about an alternative to the vast wasteland that broadcast radio has become. Consolidation and focus groups have shackled playlists. Segmentation, talk radio and oldies outlets continue to proliferate, meaning that most new bands — and new music from old ones — can't get airplay. And a growing number of entertainment options have conspired to push radio from what Marshall McLuhan labeled a hot medium to an uncool one.
Satellite to the rescue.
To be fair, XM and Sirius in large part have themselves to blame for the red ink they've been gargling. Both sought to lure what they thought would be the masses by hurling an intense amount of money at specific programming. In October 2004, Sirius shelled out $500 million for five years of Howard Stern. Later that month, XM committed $650 million for its 11-year Major League Baseball deal. Sirius got seven years of the NFL for $220 million. XM subsidized Oprah's big take: $55 million for three years. Etc.
The over-commitment of funds for programming hasn't drawn the hoped-for number of subscribers to either company. So a merger became necessary for survival as XM and/or Sirius hurtled toward bankruptcy. But if such a union is blessed by the FCC, the new entity had better do some belt tightening — and some soul searching.
The company/industry should look at a merger approval as something of a bailout. And if it happens, it'll be time for some fiscal responsibility. A few suggestions:
>mHike the subscription rate. A price increase would be acceptable as long as it's tenable. And resist the tier pricing that frustrates so many cable and satellite TV customers.
>mThin the channel lineup. A merged service would have to bag some of its redundant niche channels that current XM and Sirius listeners devour. There are plenty that I'd miss, but I'll prefer what I get to no sat radio at all. And sure, this would mean many DJs losing their gigs. That's sad, but they must have known the uncertainty of taking those jobs. Think of the folks who darted off to dot-coms and were left in a dot-coma.
>mEnforce a moratorium on program spending. Nothing they might add at this point is going to lure new subscribers, and the current ones likely are happy with what they have.
>mRethink "commercial-free." This might sound blasphemous, but it's doable. I'm not talking about doing something like one minute of spots per hour per channel; then you'd lose the "commercial-free" hook altogether. But I'd be fine knowing that the next hour of old soul or nu metal was being brought to me by Snickers. Bob Dylan's XM show is sponsored by Cadillac. Why not do more of that?
All that and a little goodwill — how about donating a mess of those 300 or so channels? — could help keep satellite radio healthy. XM and Sirius promise to offer "more choices, better pricing and the same radios" if their merger is approved. These can't be empty promises.
Erik Pedersen can be reached at erik.pedersen@THR.com.