As this recent article from Advertising Age reveals (XM and Sirius Satellite Radio Report Continuing Losses), all is not well in the world of Satellite Radio. Even more disturbing than the fact that Sirius just reported a quarterly loss of $237.8 million is that the most upbeat thing CEO Mel Karmazin could say was that advertising revenues were up (to a whopping $22 million for the year thus far). The article goes on to say Mr. Karmazin is 'bullish' on advertising as a second revenue stream moving forward.
Huh? I thought the whole idea of paying $12/month for satellite radio was to AVOID advertising! Now it seems that Sirius is pursuing two revenue streams that mix together like oil and water. No average citizen (i.e., not including folks that travel long distances on the road or live in areas with little radio coverage) wants to pay to hear commercials on the radio. And no advertiser wants to pay for advertising unless the subscriber base is actually listening.
I've got an idea. Why don't they eliminate the monthly charge altogether and just have the advertisers subsidize the content? Now why didn't anybody else think of that? ;)
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