The article, As Satellite Radio Takes Off, It Is Altering the Airwaves, was very interesting and talks about how XM and Sirius Satellite Radio has become an alternative to commercial radio. Each company offers 120 or more channels of music, news, sports, and talk for a monthly fee between $10.00 and $12.50.
Just this last week, this industry pushed the subscriber total past five million after just three and a half years of operation. Analysts call that remarkable growth for companies charging more than $100 annually for a product that has been free for 80 years. Satellite radio is one of the fastest-growing technologies ever – faster, for example, than cellphones.
Though satellite radio is still an unprofitable blip in the radio universe, it is pushing commercial radio to change its sound. Broadcasters are cutting commercials, adding hundreds of songs to once rigid play-lists, introducing new formats, and beefing up their Internet offerings.
My question is, do you think the demand for satellite radio will continue to grow? Some satellite radio analysts are estimating that by 2010, subscriber levels will hover anywhere from 30 million to 45 million, and maybe even up to 90 million. Do you think this will hurt traditional commercial radio? And why is it that people demand this product when they can listen to traditional radio for free?