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.

Limitless Reach?

Interesting rumour today: Google is looking to acquire Sirius, the satellite radio company, if the propsed merger between Sirius and XM doesn't come off.

Yes, there's the obvious aspect to this, namely providing another channel for the Google-takes-over-world-of-advertising play by allowing them to beam directly into you cars, home and ears even when not logged-on, but it also seems that the satellites that would come along with the deal have other capabilities that they could utilise.

At any given time, there are two Sirius satellites covering the U.S. out of the three that sit in varying elliptical orbits around the earth, and in contrast to XM Radio who went the geo-stationary approach. In addition to hundreds of potential radio channels, these satellites themselves can also stream TV programs and other digital content. However, what I hadn't realised was that they are also set up for two-way communications, pushing and pulling data from terminal devices.

Satellite-based internet access is already available in the US, as pioneered by Hughes, and if you line in an area where it's an option between that or dial-up then even the slow up-link speeds and painful latency times that go with a signal round-trip of 20,000 miles or so suddenly become bearable.

How, then, might Google leverage such a service? The story referenced above indicates that providing an internet connection to your car is definitely one option and doubtless there are many others you could think of too: mobile hand-held device that streams any kind of digital content plus it has an always-on internet connection for free, anyone?

But before we get too seduced by what's possible, let's look at the alternatives. 3G is already active in Europe and APAC providing ample bandwidth for data as well as voice traffic. Cars are already equipped with the means to manage those communications channels and it's only a matter of time before we see the first internet-enabled cars hitting the showrooms. The data rates, responsiveness etc. of those connections would be light years ahead of what the satellite-based approach could offer, with the sole exception of areas that have no cell coverage: an issue in Nevada, for example, less so in places where there are actually people with money to buy shiny new cars every couple of years, which is what's relevant here after all.

Adding it all up, it's a fun rumour and really does highlight the prevailing view that Google can pretty much do anything it damn well pleases right now. Stranger things have indeed happened - just look at the two satellite phone systems launched in the late 90s, Iridium and the other one, for example - and it's undeniable that Google has the financial clout and muscle to do it. However, I'm not convinced and I don't think it's real. But it could be ...