By Steve Outing
This Business Week article, “Coming Soon to XM: More Commercials,” is maddening — or maybe just off base. The author talks about satellite radio network XM adding commercials to a few of its stations, and suggests — quoting radio industry analysts — that the future well may portend XM and competitor Sirius having commercials on most of their music stations, just like commercial broadcast radio.
BW quotes Gartner Research analyst Laura Behrens as saying that in 5-10 years, XM and Sirius’ mix of programming and advertising will compare to that of broadcast radio. “Eventually, [both media] are going to get more similar as they evolve.”
I wonder what Behrens is smoking. That sounds suicidal for satellite radio companies that charge customers significant listening fees. I know that if that happens, I’d drop my Sirius account with no regrets. The reason I subscribe to Sirius is to avoid the over-saturation of commercials on FM radio. Period. Music alternatives to radio like the iPod and Pandora make radio (whether broadcast or satellite) unappealing.
I hope this isn’t what radio executives are thinking for the future. What they should be thinking about is a dual approach, with premium no-commercials channels alongside free or deeply discounted mirror channels with commercials. (Simple enough for channels that are just music and no DJs; not so simple when human announcers are involved.)