This site is dedicated to new ideas and concepts with regard to Sirius XM Satellite Radio. New technology, marketing ideas, and strategic partnerships are fair game. This site is for brainstorming and I welcome all new ideas.
DISCLOSURE: I own shares of Sirius XM Satellite Radio.

9.02.2008

Ad-supported subscriptions

It has been discussed in the past that Sirius currently has a patent for distributing advertising interlaced with live content. Commercials? But, isn't satellite radio commercial free? The answer may soon be yes and no. There are some obstacles to ad-supported radio at this time: technology and regulation.

The idea here is that existing paying subscribers will continue with service as it exists today: commercial-free. Non-paying subscribers would be subsidized with commercials. If non-paying subscribers would like to get rid of the commercials, they pay a subscription fee. Some of the content could be limited to paying subscribers only in order to give incentive to consumers becoming paid customers.

Regulation could be the tough spot in all of this. Sirius XM agreed not to use local repeaters for the transmission of advertisements, if I understand the agreement correctly. This, however, does not preclude the use of a another company for transmitting commercial content or direct satellite transmission without retransmission.

Technology would need to be developed for the radio to receive commercial content which is relevant to the current listening area. The following are a few items that need to be addressed:

  1. Each radio would to know where it is. This could be done via a GPS locator. This could tell the device what radio market the user is in and determine which commercial content to store.

  2. The radio needs to store commercial content. The radio could buffer up content from a secondary channel. This content can be stored inside the radio and queued to play at regular intervals.

  3. Filler commercials could be added along paid commercials to advertise Sirius XM services and paid radio. "Ditch the commercials, sign up for Sirius XM radio". "Sirius XM, the future of radio". This allows the user to come back from commercials back to live content (after missing a commercial or two).

  4. Commercial feature should be allowed to be disabled or periodically started on radios. This is so the feature is available on various radio stations, but Sirius XM has the ability to disable this feature on a specific channel during special events. This could be done using flags inside of an encrypted key (as discussed here).

  5. Internet based services could work in a similar fashion with the radio. This will help it explode onto the cellular phone market.

This technology, in my opinion, is going to be a major driving force in satellite radio content for years to come. It also opens a major secondary revenue stream. If some consumers are not willing to adopt satellite radio because it is not free, give them a way to get most of the content for free. That's innovation!

2 comments:

Techs_long_horn said...

I think at this point Mel should try anything that may help to get new subs. I think there is a potential market out there that just doesn't know how good satrad is. This would be a way for them to get a taste of it. Once you have it you're hooked. I can then see the free users opting to pay for commercial free, and premium channels. This could all start with a web based advertising push for streaming. "Click here" for free SIRIXM radio. Next thing they will want commercial free music and Stern in their cars. Techs

Anonymous said...

For the budget-conscious, the only way you're going to get (the lots of) them to tune in is by commercial paid internet sat radio.

For the China internet market, you might advertise Coca-cola. For the Indian internet market, you might advertise Amazon and E-bay.