More Sirius Trouble

It didn't take Sirius CEO Mel Karmazin to announce yesterday that the satellite company was going to miss its subscriber projections -- by 200,000 by the end of the year -- to know it was in deep trouble. At least not for me. Working with the next generation at USC, I have become all too familiar with the reason why Gen Y doesn't subscribe in great numbers to a satellite service. It's money -- or the lack of it and a disinclination toward subscription services. Howard Stern boosted Sirius' subscriber count in his first year, but Stern appeals to older adults. And even the 500,000 paid subscribers he attracted was nowhere near what Stern's numbers were on terrestrial radio. Satellite radio finds itself in trouble because what was intended to be exciting new technology over ten years ago when it was first approved is -- well, not so exciting to the mobile, iPod Internet generation. Meanwhile the people who can afford a satellite subscription (not young adults) are getting only one oldies channel, one channel for each decade, one standards channel and the young are getting the exciting, cutting edge music channels. That's a problem. We've discussed in the past that not having a plan to get cash-strapped 18-24's is also a problem. It's great t0 have NASCAR on satellite for those who want it but it costs a fortune as does a lot of other packaged sports content. The serious trouble that Sirius is in is that it is radio and not the mobile Internet. Have you checked radio's outlook for next year? No growth again. The cure for both satellite and terrestrial radio is to embrace the future as a content provider not programmers of the technology they are married to. And the sooner the better.