| Tuning Into Change |
3 November 2003
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XM Radio Signs up Millionth Subscriber
XM Radio reached the 1,000,000 subscriber mark last week. Whether the firm itself will profit from the change it is making to broadcasting is still undecided, but the change is coming. Thanks to XM, its rival Sirius and the entire technology of satellite broadcasting, advertising, music and other forms of communication won't survive in their current form.
With an initial investment of under $200 and a monthly fee of $10 or so, it is possible to have 100 channels of commercial-free radio that doesn't fade out when one enters a place where the zip code is EIEIO. Long-distance truckers and other road warriors will, most likely, be the core that moves the concept from technically possible to financially prudent. The rest of the public, though, stand to gain as well.
For advertisers, the problem is significant. A large, affluent demographic is going to stop listening to commercial radio. Reaching these consumers (oh, for the days when they were citizens) will grow more problematic, while their importance to the economy is unlikely to diminish.
At the same time, the music industry, which is getting itself pounded by the internet, MP3s and a bad crop of acts, is missing a huge opportunity. Here are people willing to pay to listen to music. Rather than exploit that demand, though, the robber barons of tune-age are suing children for file sharing.
New technology means new opportunity. Businesses that flourish embrace it and manage the change. Before mortgaging the house to buy shares, though, it is wise to recall that pioneers have a very high mortality rate. Satellite radio is going to happen, but there is nothing that says the companies involved now will be providing it.
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