Satellite Radio, An Afterthought In The Digital Era

Sirius XM in car console

Irony Is Subscribers Totals Are Up, But Buyers Bemoan Lack Of Both Portability And Music Customization

By the editors of Media Life

Below are excerpts from one in a number of stories on radio in Media Life’s ongoing series “The new face of radio in America,” examining all the changes taking place in the medium. Click here for earlier stories.

When media buyers think of digital radio, they think of Pandora and Spotify, of iHeartRadio and local stations that stream online.

They don’t think of satellite radio.

Once the shiny new thing in radio, which scared terrestrial radio stations to death years before Pandora became their preferred bogeyman, satellite radio today is an afterthought in digital radio, and that’s largely because it’s no longer sexy and fresh. It’s been around for 15 years.

SiriusXM Radio ended 2016 with 31.3 million subscribers, up 6 percent over the previous year.

It’s projecting to add another 1.3 million subscribers in the coming year, and its churn rate, or the rate of customer turnover, was just 1.8 percent last year.

A dimmer future?

Still, many buyers are unenthusiastic about satellite radio. They say its success won’t last for the long term.

Their complaints? Sirius XM doesn’t have a lot of advertising, of course. Most music channels are commercial-free, which is one of the things it emphasizes in luring in customers.

They also complain satellite is not customizable enough. On-demand music is the hot thing now, as Spotify has proven, and while you can choose your channel on satellite, you can’t choose the songs.

Plus, it’s not very portable (you have to pay extra to listen outside the car, either online or with an app on your phone). In fact, buyers predict internet radio could someday soon replace satellite as the preferred car install.

“People are so connected to their phones/mobile devices that they have/will become the go to media device—period,” one buyer says.

“This is especially true now that more and more automobile manufacturers are including Apple Car Play and Android Play as standard equipment.”