Radio's Grudge Helps Satellite Radio

There are few things that aggravate radio executives more than satellite radio.

For years they were so blinded by the prospect of competition from satellite radio that terrestrial operators actually thought they were competing with satellite. Some still think so.

This in spite of the fact that together XM and Sirius only have about 15 million paying subscribers.

They run many music channels with no commercials -- and some channels have few listeners. They are money losing machines that have posed no threat to traditional radio -- not even for a minute.

Meanwhile, the NAB is helping to mislead the industry into thinking that satellite radio is worth the millions and millions of dollars it spends every year on fighting the XM-Sirius merger. This is just playing to the lunatic fringe of radio people who fear a technology that is as outdated as -- well, terrestrial radio.

Ironically, radio's battle against satellite may actually be helping XM and Sirius.

Sirius just signed a long extension with automaker Chrysler to install Sirius radios in their cars right through 2015. The satellite operators may have failed at a lot of things, but they have succeeded at getting automakers to factory install satellite radios into their new cars -- thus giving XM-Sirius a certain degree of parity with free radio. That's more than terrestrial operators have been able to do for HD receivers. And there is a major reason why satellite operators have succeeded where HD proponents have not -- satellite companies are paying the automakers to install their radios.

In theory, at least, satellite radio will have a chance to have some parity with free terrestrial radio in the most important place a radio can be -- in the car. And, unlike terrestrial operators, XM and Sirius don't need every car buyer to subscribe -- just gain more subscribers than they are getting now.

Also favoring XM-Sirius is that terrestrial radio has a proven track record of cutting back on programming. Once the merger goes through, the joint satellite company will save hundreds and hundreds of millions of dollars -- if not more -- by eliminating costly duplicated technology expenses. Sirius CEO Mel Karmazin was never one to spend money on programming when he ran Infinity/CBS, but if he chose to invest in making satellite channels rich in content, he could do it more cost effectively than, say, a consolidator with a lot of local stations. After all, when Mel likes something he opens his wallet (i.e., Howard Stern).

Fighting satellite radio is a zero sum game anyway.

Terrestrial radio and the NAB should be merging with satellite radio in the sense that radio has to become a bigger, more technologically and sociologically advanced tent for it to have a future.

Terrestrial radio alone is dying and will never again be a growth industry if it has to rely on towers and transmitters.

Satellite radio never got started and can only thrive because terrestrial radio is taking its eye off the ball -- content.

The next generation wants none of it -- they are likely to be big Internet radio users, mobile content customers and podcasting fanatics in the next ten years. And there's a lot of them coming of age even now.

So, while the NAB panders to its base and wastes millions on fighting a competitor that can't even beat them in one of their major markets, they are unwittingly giving new life to satellite radio.

What they should be doing is using their resources and influence to get all radio under the roof of "new radio" -- the only way to survive and perhaps some day thrive -- together.

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