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Is Satellite Radio Becoming Terrestrial Radio (And Does It Matter?) Print E-mail
Thursday, 15 September 2005
The more I listen to satellite radio, the more it sounds like terrestrial radio.

I have personally owned both XM and Sirius for years now. Ultimately, I prefer Sirius for superior programming despite XM’s more powerful signal, but I have become concerned with a noticeable slip in Sirius’ programming style. In the early days of satellite radio, the media had vast amounts of channels that allowed a listener to get much more specific with what he or she wanted to jam to. While there are still many times more programming choices on both XM and Sirius compared to terrestrial radio, there is also now the same kind of mindless chatter, blabbering, goofy anecdotes and even commercials on a growing number of satellite radio stations.

Sirius is now run by ex-Infinity head Mel Karmazin, who sheparded Howard Stern at Infinity and who will once again be his boss at Sirius. Karmazin’s track record for increasing profits at Infinity during radio’s boom in the late 1990s is impressive. The thinking is that Mel is going to make Sirius look more like Infinity than Sirius. The commercials are coming – at least on the non-music channels. Revenue is up, according to Karmazin’s own recent report to Wall Street. Karmazin has never been known as a content guy. A programmer he is not. The fortunate meet-up with Howard Stern has gone a long way to creating the false impression that Karmazin knows programming, but industry insiders know otherwise. He is a salesman. And a dealmaker. It’s not likely he’s the man to create new formats to distinguish satellite from radio.

Terrestrial Radio Can’t Fix Their Programming
Satellite radio needs to not fear terrestrial radio. The “Jack” format is the best example of the radio’s industry inability to come up with a new format that will be successful long-term. Industry insiders know this. Can you say, “Jammin’ Oldies”? What’s Jammin’ Oldies? Not too long ago, it was another radio industry attempt at reinventing the oldies station. It failed. Now “Jack” is apparently the best terrestrial radio has come up with since consolidation started in 1996. It’s same-old, same-old. Sweeps, promos, attitude, no jocks, arrogance (“We play what we want”). And even though the format is aimed at Generation X, don’t look now, but the college campuses show masses of the next generation who can’t stomach “Jack,” let alone terrestrial radio. Oh, and ‘Jill” is reportedly on the way – aimed at women. Only in radio can you declare your only new format in years a winner without an enduring ratings track record while creating another one just like it. “Jack,” by the way, took off like an arrow (sorry) on Infinity’s Arrow in L.A., but the last month of recent rating trends show that listening has begun to decline, far too early for a lasting winner.

The idea of Four Non-Blondes paired in a musical set with George Thorougood, along with Hotel California, isn’t really that riveting. Moreover, if you want something to sound like it is shuffling, you’ll plug your iPod into your car stereo. Music industry students at the University of Southern California (my alma mater) have said as much. They now ask their professors, “Why is radio doing this? Why is radio so arrogant? Why don’t they get it?”

Clear Channel is betting the ranch on Less Is More – their initiative to cut bloated spot loads and run shorter commercials. They are taking what they say is a temporary revenue hit. There is some evidence that average quarter-hour listening on Clear Channel stations has increased since they cut commercial loads. Yet the larger question is: is less more or is it time for the radio industry to offer more for less? More value in commercials. More innovation in formats. More local programming that is unique and in contrast to what satellite has to offer.

Infinity has been saying the long goodbye to Howard Stern and should cut bait now before Stern is slated to leave for Sirius. They are reportedly trying to land Loveline host and “Crank Yanker” co-creator Adam Corolla to replace Stern in some markets. David Lee Roth is also being groomed to fill in. Both moves are mistakes. Infinity should accept that it had a great run with Stern and do something new – perhaps music that speaks to the male demo of the Stern audience. Recreating the Stern phenomenon is asking for lighting to strike twice. It won’t. Infinity should be creating new programming, not replacements for Howard Stern (old programming that is headed for terrestrial radio’s biggest imitator – satellite).

Traditional Radio Should Be Scared of WiFi
Major cities like Philadelphia and San Francisco are making a major push to get WiFi access for their entire areas. This will be a creative and powerful move that will make the Internet, email and streaming audio available to the masses at little to no cost. One way it empowers people is to allow them to use handheld and car audio devices to receive Internet radio. If you haven’t checked it out lately, Internet radio is getting better and better in terms of programming. It truly is the ultimate in niche broadcasting. Make no mistake, it has a long way to go in terms of professionalism and audio production to meet the standards set by the terrestrial and satellite guys, but for free (or a few dollars per month subscription), Internet radio is a powerful new media that can additionally fragment the already splintered radio market. It is likely that the satellite radio providers will migrate over to WiFi at some point in the future. However, if one was trying to build the next radio empire like Clear Channel and Infinity, the best potential is on Internet radio. It speaks to the lost Gen Y audience in ways traditional radio and satellite radio don’t and likely never will.

So, as the Summer of 2005 draws to an end, here is the New World Order of Radio. Terrestrial Radio is on the skids – an imitation of itself, choked by the debt owners carry in a world that offers new options to new kinds of listeners. Void of leaders who understand the next generation. Satellite radio appears to have missed its best opportunity to make a good first impression. It has become “radio-lite” – no commercials on music stations, and little to no innovation in programming. Worse, satellite radio sounds more like terrestrial radio every day. Internet radio is the grassroots unpolished answer to entertainment freedom for a new generation. It’s free or almost free. It’s devoid of arrogance or corporate panache. All it needs is WiFi or WiMax to make it on-demand on the go. And Apple’s iPod – what can we say? It took a computer company to do what broadcasters should have and could have done if they had understood the end user the way Steve Jobs does.

Satellite is becoming terrestrial radio, but both risk becoming further irrelevant to the coming generation.

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