With "Satellite Radio 2.0"
being more than a year away it's still too early to speculate so... let's do some speculating based off of the clues that we do have.
Here's what we know about Satellite Radio 2.0:
- These will be "next generation" satellite radios
- They'll offer "more choices" to the consumer
- Contain capabilities "that does not exist today"
- Next gen satellite radios will be available in both retail and OEM channels
It's the last point that tells me that this is a complete change to the actual satellite radio services being offered, and not just iterative updates to the receivers (as we've seen over the past few years).
The fact that we're looking at more choices and new capabilities, combined in both Retail receivers and OEM receivers, tells me that the company is ready to shift it's total product offering.
Looking At The Past, To Predict The Future
I've definitely been frustrated by the lack of ground-breaking functionality in satellite radio receivers. Sure, things were great when we started to see split-screen functionality
, and then later came the awe-inspiring (insert sarcasm) functionality of upgrading to a color display
- but let's face it, color is something that's expected nowadays
and not necessarily revered.
For a while, it seemed that satellite radio was finally catching up to the technological advances made by their satellite TV brethren. And then it all stopped.
Yes, the XM Skydock
was a breakthrough, because finally - finally
- Sirius XM decided it was "ok" to decouple the interface from the brains of the receiver. But this is hardly a new concept in the world of consumer electronics.
So, if we follow the past technological trends, what is it that Sirius XM Radio Inc. will offer to consumers now?
One More Clue
There's one more clue that Mel Karmazin dropped during the Q2 conference call that I think will help contribute to the discussion.
When asked about the company's long-term pricing strategy, Karmazin responded:
"As you know we are currently constrained by the FCC order where we agree to not increase the basic pricing for a period of three years. That goes throughout August of 2011. We believe that when the FCC looks at all of the choice that is are available in audio entertainment, that they would see no reason to further restrain us, but we will have to wait to see what happens there. And then we will take a look at what our decision will be on any changes that we want to make going forward in offering additional pricing alternatives."
Interesting. August 2011 is the FCC's deadline for re-visiting the subscription pricing for satellite radio. How convenient, then, that "satellite radio 2.0" will be made public right around the same period?
Sirius XM can't simply tell the FCC to unlock their pricing structure without showing a significant change to the product offering. They need to bring some new core functionality to the table and ensure that the FCC sees that they're not "offering additional pricing alternatives" without any payoff.
So great, with all that as inputs, here's what I think satellite radio 2.0 will be about. And they involve two main core pieces of added functionality to the current satellite radio offering:
#1. Audio On Demand
Looking at other subscription models, it's proven now that consumers want on-demand services. Video On Demand (VOD) is now pretty commonplace across most providers, and allows consumers to simply pick from a limited selection of shows, movies and other kinds of programming - and watch on their own schedule.
So it only makes sense that Sirius XM would follow along with this trend and make their own "audio on demand" service available. It's something that AM/FM doesn't offer, and it serves as a melded alternative to some of the "personalized music" experiences from providers like Slacker and Pandora.
But how would Sirius XM technically pull this off?
There's any number of ways (and I'd love
for my savvy readers to chime in here), but one thought I have is essentially a "push" service. The receivers would need to be equipped with far more capacity than they have today (high-capacity storage is mighty cheap nowadays afterall) and would need to be able to access a "hidden" channel. Through that hidden channel, the receiver would download a limited selection of audio entertainment.
Then the "on demand" feature would simply call up the pre-stored material on the device. And since capacity is limited, Sirius XM would just need to rotate out the selections on a regular basis (once a week, for instance).
#2. Love and Hate
Speaking of "personalized music" experiences like Pandora and Slacker, there's no doubt in my mind that Sirius XM is eying this territory. It's something I mentioned in my roundtable interview
for The Motley Fool
with my cohort from SiriusBuzz
. Mel Karmazin is without question watching these companies and seeing the consumer trends they're creating. The ability to customize your listening experience may soon become as commonplace as channel surfing.
So again, how would Sirius XM do this?
My theory is that it would have to be connected to the internet somehow. Be it through a wireless broadband connection (think of the Amazon Kindle
and it's free 3G capabilities) or through a WiFi link (say, when the vehicle is parked or the device is docked).
If the listener is able to "heart" a song, the receiver could automatically download related music once it gets connectivity. If a song is "hated" then the device calls up the pre-downloaded music, and will queue the live satellite stream in the background. It's no different than pause/replay functionality in current receivers, but with the stored music substituting for silence.
Are my theories way off, or do you think I'm on to something? I would love to hear your thoughts.
View the original Article at Orbitcast
or discuss it here.