CASPER
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SkyFILES: Sink or Swim for Sat Radio
by Michael Hopkins
The new satellite radio behemoth has taken Fungus off the air.
The audio stream dedicated to all things punk, first envisioned by XM in 2004, has been replaced with a repetitive infomercial touting - no kidding - AC/DC's new album. No more noise from the Ramones, Husker Du or Bad Brains. No more of the good West Coast stuff from Rancid, NOFX, Pennywise, Bad Religion or the Descendents. And none of the U.K. classics from The Clash or the Buzzcocks, not to mention the filth and the fury of the Sex Pistols.
Instead, listeners of the satellite radio juggernaut get arena rock.
Of course, this ranting comes from just one individual who isn't happy with the new direction being forged by Mel Karmazin and Co. To be honest, Sirius XM has more to worry about than the complaints of a lone customer.
In these days of economic uncertainty, the merged satellite radio company is facing big hurdles that pale in comparison to the challenges faced by other multiplatform companies.
For starters, satellite radio is dependent on car sales. And those sales are tumbling faster than a Jeep Wrangler careening off of a steep cliff.
The National Automobile Dealers Association said this year's vehicle sales could total an estimated 14.2 million units, down from 16.1 million last year and 16.5 million in 2006. Some in the automotive sector are calling the U.S. sales environment today the worst in 15 years. That's not good news for Sirius XM.
Consumer spending is down. And while electronics could be a bright spot among predicted dismal holiday sales, that's because consumers are expected to purchase digital TVs or converter boxes before the nation's switch to digital TV in February. It is unlikely consumers will be buying a lot of satellite radio equipment at Christmas.
On the financial side, there's a lot of talk about tightening credit markets. Could that mean trouble for Sirius XM and any efforts to refinance company debt, which according to press reports stands at more than $1 billion?
And there's the competition. There are more than 80 HD Radio products for sale at more than 14,000 stores, and HD Radio technology has several deals in the automotive sector for factory-installed options offered to consumers. Also, more than half of all vehicle models up for sale next year will contain optional support for Apple's iPod, stated data from research firm iSuppli.
Resurrection of the punk channel may not help Sirius XM navigate the choppy economic and competitive waters. (But it wouldn't hurt the company to think about the customer once in a while). Nonetheless, all eyes will be on the satellite radio company to see whether it will sink or swim.
by Michael Hopkins
The new satellite radio behemoth has taken Fungus off the air.
The audio stream dedicated to all things punk, first envisioned by XM in 2004, has been replaced with a repetitive infomercial touting - no kidding - AC/DC's new album. No more noise from the Ramones, Husker Du or Bad Brains. No more of the good West Coast stuff from Rancid, NOFX, Pennywise, Bad Religion or the Descendents. And none of the U.K. classics from The Clash or the Buzzcocks, not to mention the filth and the fury of the Sex Pistols.
Instead, listeners of the satellite radio juggernaut get arena rock.
Of course, this ranting comes from just one individual who isn't happy with the new direction being forged by Mel Karmazin and Co. To be honest, Sirius XM has more to worry about than the complaints of a lone customer.
In these days of economic uncertainty, the merged satellite radio company is facing big hurdles that pale in comparison to the challenges faced by other multiplatform companies.
For starters, satellite radio is dependent on car sales. And those sales are tumbling faster than a Jeep Wrangler careening off of a steep cliff.
The National Automobile Dealers Association said this year's vehicle sales could total an estimated 14.2 million units, down from 16.1 million last year and 16.5 million in 2006. Some in the automotive sector are calling the U.S. sales environment today the worst in 15 years. That's not good news for Sirius XM.
Consumer spending is down. And while electronics could be a bright spot among predicted dismal holiday sales, that's because consumers are expected to purchase digital TVs or converter boxes before the nation's switch to digital TV in February. It is unlikely consumers will be buying a lot of satellite radio equipment at Christmas.
On the financial side, there's a lot of talk about tightening credit markets. Could that mean trouble for Sirius XM and any efforts to refinance company debt, which according to press reports stands at more than $1 billion?
And there's the competition. There are more than 80 HD Radio products for sale at more than 14,000 stores, and HD Radio technology has several deals in the automotive sector for factory-installed options offered to consumers. Also, more than half of all vehicle models up for sale next year will contain optional support for Apple's iPod, stated data from research firm iSuppli.
Resurrection of the punk channel may not help Sirius XM navigate the choppy economic and competitive waters. (But it wouldn't hurt the company to think about the customer once in a while). Nonetheless, all eyes will be on the satellite radio company to see whether it will sink or swim.
