Sunday, March 14, 2010

How to save satellite radio

It feels like a critical time for music listening right now. Free streaming services like Pandora and are poised to take off, but they're hampered by slow rollout, customer confusion, and the fact that labels like Warner are totally freaked out by free streaming and yanking their music from them.

On the other hand, terrestrial radio is virtually unlistenable, due to its crowd-pleasing format of two songs, then a 30-minute commercial block that's cleverly timed with every other station's 30-minute commercial block. Add to that the constant repetition of the same five songs and radio becomes, as a tool for music discovery, a mind-numbing exercise in tuning out (if you'll pardon the pun).

Enter satellite radio.

The Sirius/XM upstart has been on its deathbed for a few years now, but it's starting to creep out of near bankruptcy and its shares are into the $1 range. (Don't laugh, a year ago it was something like 12 cents.) It's hanging on by a thread and I think that, with a few key moves and a shift in strategy, now's the perfect time for satellite to sneak in and make a splash.

But let's be clear: there's not a lot of time. Pandora, delivered wirelessly via Bluetooth, is rocketing into car stereos and will be an integral part of the upcoming Ford MyTouch system and the next generation of Ford Sync. And millions of us are streaming Pandora online at work and on our phones either in the car or at the gym or walking down the street. If satellite is going to make a move, it's got to be now.

The biggest obstacle right now? Price. I just finished a 6-month trial of satellite radio in my car. At the end of the trial, I was totally hooked on several stations and absolutely devoted to the idea of commercial-free listening. I'd purchased a ton of music that I discovered on various stations. Now, sure, I use an auxiliary jack in the car to plug in my phone or music player, but it's annoying and dangerous to, say, switch playlists on the phone interface, or plug it in while driving if I forget to before I leave. And I like looking at the radio dash to see what song is playing. My Sirius trial was, for me, a total winner. But when the time came to re-up and become a paying subscriber, I didn't do it. Why not? Like I said, price.

Subscription prices went up dramatically after the Sirius/XM merger, and they are now at deal-breaking levels. Period. The standard package Sirius pitched me is $12 a month, preferably payable annually, and that does not include Internet streaming. There's an a la carte package that starts at $6.99 that requires a new stereo and also doesn't include Internet streaming. The various packages are ridiculously complex and the whole thing just feels like a confusing, overpriced mess--because it is.

Recently on Buzz Out Loud, we talked about streaming radio versus satellite, and here's an example of the e-mail we got about satellite's pricing.

"I'm a current Sirius subscriber and I absolutely hate the rates. Last year, I signed up for a year of service for about 90 dollars. My subscription renewed on Monday, at a rate of about 110 for the year. This includes a $12 charge for US Music Royalty Fee, a fee that satellite and internet based radio stations are forced to pay by the FCC yet terrestrial radio stations aren't required to pay yet. (They are currently fighting this fee). On top of finding this fee extremely obnoxious, I am essentially paying $12 per year for music that I have no physical copy of, ugh!

On top of this, Sirius/XM is the biggest nickel-and-dime company I can imagine. If i wanted to listen to streaming online, that's an extra $3 a month. O, you want to be able to listen to Sirius on your Blackberry or iPhone, well that's another $3 a month on top of the $110 fee. And then on top of that; if you want to listen to Sirius and XM you have to make sure you purchase not only the special plan but a dual receiver. And the worst thing about it is; when you purchase your subscription online, you have to use a credit card. Unless you call them, as there is no option online, you will be automatically renewed and charged for another year membership."

Guys. That's just ridiculous. Here's another, similar complaint about XM Radio.

"Out of the blue, XM Radio no longer allows subscribers to stream stations on a computer without paying for a premium account. First they cut the 64 bit audio to 32 bit and added a premium subscription of 128 bit audio for $3.00 a month. I called and canceled my subscription for two radios today over this. I imagine there won't be satellite radio at all for much longer."

Ok, so, start with price cuts, but don't end there. First, make the a la carte option the only option, and include Internet and mobile streaming. I'm sure it sounds terrifyingly low, but trust me, guys: for the convenience, the discovery, and the streaming, I'd happily pay seven bucks a month. Or, ok, I'll allow two plans -- a basic and a premium, and the premium includes ... nah, never mind. One plan. Seven bucks.

Next, you've got to change the way you try to get your customers. Get off the hardware crack and start selling satellite as an embedded service. Right now, when I go to the XM Radio or Sirius home page, I see devices. When I click the shop link on either site, I see an array of portable devices and car stereos. That's got to stop. No one's looking for another thing to carry right now.

First step: flip the script and start selling commercial-free radio stations and Internet and mobile streaming. Once you've got them paying for those subscriptions, people might buy receivers and new car stereos, but sell them the subscriptions first on the devices they already have. Almost every new car has satellite capability built in, and if you've got universal apps for mobile streaming, you're done, you're selling subs like hotcakes.

Next up, start using the Netflix model--don't try to sell extra devices, just be in every device. Netflix streaming is in Blu-ray players, TVs, game consoles, TiVo, heck, even the Sony Dash. Satellite should be, too, whether it's an actual receiver or just satellite radio streaming. Be everywhere with a trial that can turn into a subscription and, above all, make sure those subscriptions are cheap enough to be easily justifiable. Under $10 a month, I can swallow. Over $10? I'm out, and I'm not the only one.

Oh, and also, can't you build in some kind of broadcast buffer to stop the service from cutting out when I go under an underpass? Because that is annoying.

Look, satellite radio is a good product, Stern notwithstanding. (The terrestrials can have him.) The music discovery, the lack of commercials, the integration with existing car stereos: all of that is killer. And the opportunity for Internet and mobile streaming is satellite's totally unexploited and potentially game-changing opportunity. Innovate or die, Sirius/XM. I think you've still got a chance to innovate. And I hope you do, because I really like that Coffeehouse station.

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Tuning in to satellite radio easy with SkyDock, XMp3

I NEVER GAVE satellite radio much thought until late last year.

Cruising through Arizona in a cramped Ford Mustang rental (she had to have a convertible), the wide variety of music and other programming helped the mood immeasurably — almost as much my buffalo burger at Mr. D’z Route 66 Diner.

On request, XM Canada sent me a sampling of its current product line. Included were the Pioneer XMp3 portable satellite radio/MP3 player and the XM SkyDock. The SkyDock is fairly new to the Canadian market. It’s a unique tuner that uses an Apple iPhone or iPod Touch as the control panel.

Satellite radio units installed as add-ons are generally clunky, full of hard to use buttons. They also clutter all but the most spacious interiors.

The SkyDock, however, incorporates a common gadget that may already be along for the ride and plugs directly into your vehicle’s 12-volt power adaptor. The fit is secure. No worries about the unit coming loose on bumpy roads.

The SkyDock ($130) is easy to install. The most difficult part was running the external, magnetized antenna to the exterior of the vehicle. Since it was a short-term loaner, I just closed the back door on the wire and stuck it to the roof. Worked like a charm.

skydock XMp3

After downloading the free SkyDock app from the Apple App Store, it was good to go. The app will run in either portrait or landscape mode, but stops working if the user switches to another app. Unfortunately, this rules out using the iPhone’s GPS function while listening to music.

There are two ways to get the sound to your car’s audio system, a line out to an auxiliary port or by using XM’s PowerConnect FM transmitter. I opted for the transmitter and sound quality was better than regular radio. I did, however, find that sound quality varied from station to station, but not to the point of being bothersome. Music stored on your iPhone or iPod Touch can also be played.

Like every XM radio I’ve seen, the device allows you to tag favourite artists or songs so it emits an audible prompt and display any time they’re being played.

The SkyDock also acts as a charger and really didn’t look terribly out of place in my car. Since my iPhone goes with me anyway, this configuration allowed me to have access to XM programming without having to haul around yet another gizmo.

Next up was the XMp3 portable device. It’s less than 10 centimetres high with a small antenna at the top, weighs only 88 grams, including battery, and uses a familiar navigation wheel with a central button for most functions. It sells for about $200.

Initially I had trouble getting a signal. Had I taken time to read the instructions, I would have pointed the external antenna toward the south sky instead of east. Once the antenna was sorted, everything else fell into place and reception was solid and consistent.

Menus are easy to navigate and an included remote makes listening from the couch a breeze. However, given the device’s small size, you’ve got to have eyes like a freaking superhero to see the screen from a distance.

As an MP3 player, it does the job. Sound quality is decent but not fantastic and it plays MP3 and WMA files. In addition to two gigabytes of storage, a microSD slot is built into the top next to the headphone jack.

As a portable satellite radio, its reception is hit or miss — mostly miss.

My favourite feature was that it can record up to 100 hours of programming from as many as five channels at the same time and it can be set up to do it automatically. In my opinion, this gives the unit a lot more utility and value.

Of course, in order to listen to XM, you have to pay for XM. Its 130 channels and access to online streaming will run about $15 a month.

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