It's Gonna Be Huge ... Trust Me

Nope, not a bad line from a 1970s porn film but rather what must have been the pitch for satellite radio back in the early 1990s. Forged in the "white heat" of the US computing and technology boom, both Sirius and XM offered a future where radio finally got away from the old AM/FM days of narrow coverage, incessant advertising and limited programming choice, finally to become a first class citizen in the personal entertainment field.

For a while all seemed to go well, with both companies making headlines by grabbing key talent and competing with each other to win more of the key car brands "factory included" lists. Alas, that phase was pretty short lived. Before long it became clear that the only viable market, despite the early promise, was indeed in-car entertainment, a market that suddenly was being radically changed thanks to the iPod.

There's nothing wrong whatsoever with the system, programming or anything else (though my BMW factory-fit receiver still loses the signal too often for my tastes) but what is a problem is the $12.95 a month. In practice, I'm sure most drivers use one, or at most, two, satellite channels, supplemented these days with HD radio (free) and their own personal toons via an iPod (also free).

In my case, BBC World Service is the "go to" gig, with an occasional foray into Radio 1 just to see what the yoof of the UK is up to. For me, the BBC is always worth listening too, which is why I stream Radio 4 over the Internet at work all day long for the princely sum of zero dollars and nil cents.

While I'm willing to fork over the readies, the chart above shows that I might well be in the minority. Add to that unwillingness of Joe-public driver to spend the cash, that dramatic fall off in car sales is pulling the rug completely from under the merged Sirius XM group. Even if they are able to keep a significant percentage of the subscribers who already use the service active, the underlying trend of sharply declining new additions, thanks to miserable new car sales, is weighing down the company to the point of exhaustion.

Personally, I hope they manage to get back to a path of regular growth and regardless have a business model that allows them to stay solvent. But however you look at it, "huge" has turned out to be less than tumescent and more along the lines of "deflating fast". Alas, in this case it's pretty hard to see the satellite radio equivalent of Viagra showing up any time soon.

Listen long, my son, because soon it may be gone.