The success of satellite radio

The entertainment industry is one of the most dynamic and attractive ones, and satellite radio has recently captured a large share of it. Audio entertainment products are highly popular today and there is a wide variety of choices when it comes to having good music in your car: regular CD players, car CD players with storage space or MP3 players. When it comes to radio however, there is an even bigger divide – you can listen to or go with one of the new satellite radio offers. The popularity of satellite radio broadcasting has gone sky-high in the past years mostly because it has some exciting benefits that commercial FM/AM programming simply cannot offer. Analog radio stations are not able to broadcast the full range of sounds available through digital satellite radio and this has a noticeable impact on sound quality. Digital radio programs are broadcast through a satellite – this means that users don’t have to switch radio stations every time they get out of a certain geographical area, as the signal is countrywide. Traditional to FM and AM broadcasts have different forms of noise disturbances – satellite radio eliminates this problem as the quality is very close to that of the original tracks it is playing. 

Technology and content

Because satellite radio uses such high tech instruments (satellites, small portable receivers) many still perceive it as unapproachable and prefer to stick with traditional radio. Most young people, however, can’t wait to get their hands on the latest in technological advancements, so satellite radio is perfect for this age group. The price you had to pay for satellite radio one or two years ago was a bit high for many who decide to enjoy traditional, commercial radio stations instead, as they are free. Today however, for a subscription of around $12 per month, you can receive dozens of excellent news, sports and music radio channels. And the best thing is that they are commercial free. In many ways, satellite radio became popular following the idea of DirecTV's success – the difference was made through superior broadcast quality, excellent geographical coverage and content. This is in fact the main issue satellite radio broadcasters and terrestrial radio stations are looking at – high quality content is actually the most flexible field where subscribers or listeners can be won or lost. In order to get valuable radio content, many satellite radio offers were made to popular media topics. MLB broadcasts, for example, might be broadcast exclusively on satellite radio stations. Although this is still an assumption, chances are that more and more popular US topics will be exclusively available on different satellite radio programs, whether they are from Sirius, XM Radio or from some new broadcasters that will join the market. 

It all comes down to what the consumer wants

And it’s true – it does come to that. Some laughed at the idea of paying for radio – for as long as we have known, radio programs were free. However, the satellite radio industry only followed in the footsteps of cable TV – although all Americans can receive free programs with UHF and VHF antennas, over 80% are willing to pay monthly subscription fees. With $9.95/month for XM and $12.95/month for Sirius, accessibility to satellite radio broadcasts is high and anyone can afford to subscribe. And the truth is that satellite radios have proved, once again, that sometimes a consumer is ready to pay for something they used to get for free as long as the commercials are eliminated. In many cases, out of an hour of radio broadcasting, around 12-15 minutes are commercials – people don’t want such interruptions in their radio programs. Both Sirius and XM Radio knew this when they launched their paid subscription services and they were right, as each company has millions of subscribers today. The satellite radio craze got even larger when it met the auto manufacturing industry – today almost all major manufacturers offer satellite radio receivers as standard or optional with each of their models. 

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