Sat Radio may not be Sustainable
Techdirt is reporting on how XM has posted wider than expected losses today and as such, it might be too costly to keep running in the red for satellite radio.
Launching and maintaining satellite is extremely expensive. Just ask anyone who worked on Iridium or Teledesic. Even if you can sign up a lot of users, the capital costs are tremendous. If the costs of getting those subscribers is high, then it’s a definite recipe for trouble. So far, Sirius and XM have been able to keep kicking, mainly through a ton of investment money and the promise of future potential profits — stacked up against continued losses. It looks like a few are finally doing the math on all of this and realizing that the satellite radio business, as much as some people like it, may not be sustainable.
I have been fairly interested in what satellite radio might be able to offer me, but with an MP3 cd player, and my iPod, what do I need with a service that I don’t have exact control over the songs I listen to? Which would you rather have: $400 MP3 player with decent FM transmission or $10 a month subscription to what amounts to commercial free FM radio stations?