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The Satellite Problem

August 18, 2022

SiriusXM recently fired a salvo at the radio industry. This has been discussed and dissected enough that we do not need to jump into the fray. Not long after that, Katz released a study showing that 74% of weekly satellite listeners also listen to AM/FM radio. And 34% do so on a daily basis!

While it’s comforting to know that SiriusXM has not siphoned off ALL of AM/FM radio listening, it certainly is consuming quarter hours we would rather keep on our side of the ledger.

I am a SiriusXM subscriber. It only costs me about six bucks a month. In a world of streaming services, that is a mere pittance.

I can also tell you that SiriusXM is very aggressive on selling the hundreds of channels that are only available on the app. We know from Nielsen’s quarterly PPM Additional Characteristics report that roughly 25-30% of P6+ households do not have a radio in their homes. SiriusXM is rushing to fill that void.

The platform has a multitude of special features, celebrity programming, and unique specials that are available in real time and on demand. It also has a number of mediocre channels that are bland and boring.

One thing it does not have – at least on its music channels – is commercials. Yes, AM/FM radio is “free” but sitting through an eight-minute stop set is anything but freeing.

Though the Katz study does not specifically say this, it would appear that a majority of satellite users are heavy radio consumers. The respondents shared a deep commitment to their favorite AM/FM stations – a relationship that averaged 15 years! And 81% say they would miss their favorite AM/FM radio station. Hopefully your station is in that category.

But let’s face it. Most are not.

I realize the playing field is not level. SiriusXM does not care if you ever listen to one of their channels. As long as your monthly payment clears, they’re happy. AM/FM is uber dependent on you tuning in – especially if you are carrying a meter or a diary.

This affords SiriusXM the luxury of taking chances that AM/FM radio is reluctant to do. Satellite can feature wider playlists, take chances on unproven new music, and allow their talent to prattle on about whatever they want.

On the flip side, they can specialize in niche genres of music. More importantly, they allow talent to flourish and grow. Some of their performers are truly entertaining and compelling because they are not worried about talking for longer than 20 seconds.

That said, their contests (at least the ones I hear) are boring. Trips to Las Vegas to see an act, sign up online, blah, blah, blah. Very generic stuff.

If I could isolate one thing SiriusXM does well that AM/FM radio has all but abandoned, it would be the element of surprise. Whether it be music, features, or personalities, they are putting in the effort to keep their audience entertained.

These are all things AM/FM radio developed. We need to get back to those roots.

-Steve Allan, Programming Research Consultant