Wednesday, February 21, 2007

XM and Sirius: Solving Aggregation Problems by...Aggregating?

About a year ago I posted an item on the XM satellite radio service's failure to use an extremely powerful content distribution technology to support old content licensing schemes. Not much has changed since then, except the announcement of a pending deal to merge XM with the equally challenged Sirius satellite radio service. So the solution to aggregating overpriced media in a subscription model is to...aggregate more of it in a monopoly? Hey, it works for cable, why not satellite radio? The press release claims that there will be a cost savings in the neighborhood of USD 3 to 7 billion by the merger, but that's a pretty big neighborhood - it really says that they're still grasping at how to make this a more potent business model.

Anti-trust considerations aside it probably makes sense to allow these two companies to see what they can make of a combined service that may be of more use to consumers. They're both chasing a fictional "chokehold" on content distribution that is probably best left to dwindle of its own accord. A better deal would be to open up the production of satellite radio receivers to any manufacturer - and to require those receivers to take in signals from any satellite radio supplier on auctioned-off channels, much as terrestrial radio is managed today. A subscription could get you access to the same number of channels as one receives today, but it would leave open the door potentially to additional programmers to leverage individual channels as well.

But a still better deal would be to open up satellite-based services to digital content suitable for mobile downloaders of all kinds. Thanks to the Web programming and publishing has become much more segmented and asynchronous. Why not have a satellite feed that allows downloads to updates on the top 50 games or top 50 blogs? Why not have a Zagat channel that keeps my restaurant and entertainment directory as fresh as possible? Why not pump out the top podcasts for specific market sectors? Why not - please! - give me a feed that keeps my handheld digital road maps and nautical charts up to date with user-contributed content?

Let the channel programming providers be responsible for monetization management, with the satellite service provider taking a flat or negotiated cut of the action. Let's hook up those stubby little antennas to the content that people really want - and watch a new era in mobile entertainment take form on "radios," iPods, PCs and whatever other device wants to park itself under a satellite signal. Just because the signal is serial doesn't mean that the programming needs to be serial. Satellite signals have been wasted on the most unimaginative content marketing imaginable. Let's move on to the good stuff soon, please.
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