~ How does satellite radio work?
Each of these companies offer different broadcasting systems, since the radio signal of each is proprietary. This means that you will have to buy different hardware depending on your subscription to one of these companies. However, there are three components common to all satellite radio services: the satellites, the ground repeaters and the radio receivers. Different satellite radio companies broadcast the radio signal in different ways. For instance, XM satellite radio uses geostationary satellites which have orbits that are synchronized with the movement of Earth. These satellites are located above the equator. In order to allow subscribers to receive crystal-clear signal despite obstacles such as buildings, hills or bridges, XM satellite radio service has installed a network of repeaters antennas that receive the radio signal from the satellites and retransmit it to the subscriber’s receiver Sirius, on the other hand, uses satellites that have unique elliptical orbits around Earth. These kinds of orbits allow satellites to get higher in the sky than geostationary satellites and this prevents loss of signal. This is the reason why Sirius has fewer terrestrial repeaters than XM.
Satellite radio services have digital broadcast centers where a huge amount of music in digital format as well as CD format is stored. Radio programmers have the task of selecting which song has to be played at which time. There are also a lot of studios managed by digital radio companies where artists perform live. All songs and material are transmitted to the satellites in digital format so that the signal contains very high quality sound. The signal is encoded by the satellite and then retransmitted to the repeaters antennas, which then transmit it to the radio receiver which decodes it and plays the sound. The entire process is very quick and reliable. Satellite radio would not be possible without digital compression. Digital compression is a technique that uses sophisticated algorithms to compress as much material as possible on the available bandwidth. Once you make a subscription to a satellite radio provider you will need the appropriate radio equipment. Traditional radios cannot decode the signal received from satellites so you will need special equipment.
The popularity of satellite radio has exploded due to many technological advancements that enabled manufacturers to offer the receivers at very attractive prices. The fact that satellite radio is commercial free for many of its channels is also a major selling point.
Interoperable Satellite Radios
The satellite radio world is divided among the two major broadcasters, XM Radio and Sirius. Since they work on different frequencies and need specific equipment to broadcast, Sirius and XM Radio have divided the market into two groups. While some are fans of the Sirius channels others prefer XM Radio, and the debate regarding which of the two is the best could go on forever. Some however are subscribers to both services, since they love some of the Sirius programs but also enjoy XM Radio broadcasting. For them and for more people interested in satellite radio, there are some potential good news. Interoperable satellite radios are one of the things most of the major players in the satellite radio industry are talking about. What are they? Basically they are receivers that can work both with Sirius and XM Radio and everything is enclosed in a single unit.
Interoperable Technologies – when Sirius and XM work together
Interoperable Technologies is the name of a joint effort funded by both Sirius and XM Radio, with the declared purpose of bringing dual-subscription satellite radios to the general market. Founded in 2003, Interoperable Technologies has started developing the dual-mode satellite radios ever since and progress is being made with each passing month. Interoperable Technologies gets help from consultants from both XM and Sirius and their 2005 success of developing a singe unit that can receive both transmissions was a notable one. Today, Interoperable Technologies ha a deadline of bringing the developed receiver unit to the market. The monthly subscription price is estimated to be around $26 – for which you get over 300 channels from the combined broadcasting list of the two satellite radio operators.
What the people say…
The news of the interoperable satellite radio development has triggered interesting responses among XM and Sirius satellite radio subscribers. Here are some of the things people left on forums and discussion boards regarding this development:
“$26/month? A hell of a lot cheaper than cable TV.” Says one of the forum posters. He is right, but, of course, many will question the need to pay $26 for over 300 radio channels out of which 80% will probably never get listened to.
“Oh man! As a dual subscriber, this would be SO cool to have. Where do I sign up?” – on the other hand, of course, there are those people that don’t mind spending a little extra when they can get so much more.
“Cool idea if it ever comes to pass. Even though I only subscribe to Sirius, I would consider buying this with an eye on the future...” – for people such as this forum poster, the interoperable satellite radio system is the natural evolutionary step forward, so it is definitely worth looking into.
Implications of the interoperable satellite radio system
As you can see from the response of the potential customers, the interoperable satellite radio system is an interesting development. While Sirius and XM are lucky enough to be the only major players in this field, for now, it seems they are also ready to work together in order to consolidate their future. Of course, offering twice the programs on a single unit is a major step forward, and from the early stages it seems that the target audience is ready to receive the single receiver unit with applause. On the other hand, is this an initial enthusiastic response or is it genuine interest? Won’t 300+ channels become too much and won’t people start to feel like they are paying for something they are rarely using? There will also be some interesting things to follow as far as exclusivity rights go, because each of the two broadcasters have their own original approaches to common things. Another interesting aspect to follow will be how the sales for individual Sirius and XM units will go after the dual receiver hits the market. For many, the combined efforts of Sirius and XM tend to look like a first step towards a large scale joint venture that will lead to an absolute monopoly of the satellite radio market.
MLB to Disappear from Terrestrial Radio?
The changes that took place in the way MLB games were broadcast on television made many think that the same will happen to radio soon enough. Today, local television stations only broadcast 23% of the MLB games. Also, 7 of the major league team games are only available on cable, an exclusivity factor that seems to work well for them. In an interview to WSJ, Edison Media Research's President Larry Rosin declared that "it is probably inevitable that baseball radio broadcasts will go to a 100% subscription model... It will happen because there's too much money in it not to do it." This is an interesting perspective for the two main digital satellite radio providers, XM Satellite Radio and Sirius. This potential development sounds excellent for XM especially, as they would hold the exclusive rights to all major-league baseball games. Of course, that would be an important step forward for XM, as the MLB generates huge interest in the US, and it would mean that another building block has been added to the development of satellite radio.
MLB Radio and XM Radio
MLB also has its own subscription paid online radio channel, and if the same thing happens to radio as it did to television they would definitely enjoy the situation. Since experts in the communication field consider that satellite radio is still in its infancy, the trend of moving broadcasts of such games to a subscription paid environment would take digital radio broadcasting to the next level of development. The earnings from XM Radio and MLB Radio are split between the 30 MLB teams, but they are divided equally. This means that the MLB team’s interests would be high and the economical and financial factors could speed up the process of making MLB games exclusive to satellite radio. The statistics we have today tell an interesting story: presently around 23% of XM subscribers have signed up to receive the MLB transmission, so there is a lot of potential for growth. Terrestrial radio can already start to feel the danger of loosing MLB broadcasts to satellite radio as this revenue driven model is more attractive for the MLB teams.
Implications of such a transfer
As with anything that reaches such a controversial topic, the opinions are shared among experts and the general public. Some people are convinced that this whole movement is nothing more than a bubble of soap. Baseball is mostly a TV favorite and although there is still a lot of interest in MLB radio broadcasts, most people will not feel the transfer to digital radio as a major change. Although radio was the initial growing medium for baseball, television is king today, and they say that the transfer from terrestrial radio to satellite radio is not something that will have a significant impact. Other opinions say that “MLB would loose more audience then it would gain from the exclusive fees”. Since the format of the terrestrial radio stations is more flexible it also allows them to broadcast more games than broadcast TV. The same people say that “the MLB would alienate a lot of local fans if they took baseball off AM radio”. For other people, there is another comparison to be made – that between the impact this would have on MLB and the impact it had on NFL, where a similar process has already started. The Sirius NFL broadcasts brought the company some new listeners, but the changes were not extreme and since NFL is more popular than MLB, some expect the same trend to be followed in MLBs case as well. Of course, there are voices that say this change would have a significant impact on the way baseball is perceived. Since watching a game on TV can take away a few hours, many prefer to listen to the game on radio while they are doing something else. This is especially true during summer months, when many prefer to spend time in the yard or on the porch, not inside the room in front of a TV set. Of course, comparisons between the various major sport types in the US can be made from many perspectives, but most will agree that baseball is a game that can be followed on radio. For now, al the signs point at a transfer of broadcasts from terrestrial radio towards satellite radio, but this may change depending on the response companies and MLB receive from the public.
Online streaming and the changes in the way satellite radio works
The recent development of satellite radio received a lot of newspaper and web page space, as well as plenty of attention from traditional media channels. There are a few things that are changing rapidly in satellite radio, changes that may or may not affect the future of the XM and Sirius Satellite Radio companies, as well as the consumers. A few major steps towards the dynamic development of satellite radio have given consumers and financial analysts different perspectives from which to analyze this phenomenon. With the MLB moving away from terrestrial radio and heading for digital radio transmissions, with a Playboy Satellite Radio channel that has over a million subscribers and several other impressive developments, we can say that satellite radio is on an ascending path. An abrupt one, filled with shock news and unexpected developments, but ascending nevertheless. An interesting idea is the one that XM and Sirius are working on a single receiver unit that can receive broadcasts from both major satellite radio broadcasters. Another event that rocked the satellite radio world was Howard Stern’s online streaming on Sirius. His appearance on the Sirius Satellite Radio gave a new light on the Sirius company, as one that offers more than radios and broadcasting means – as one that offers genuine content.
Terrestrial versus satellite
One of the problems XM and Sirius have had is with making the satellite receiver something desirable, cheap and effective. In the beginning the satellite receivers were large and expensive, and performed poorly on moving vehicles. Of course, the modern satellite receivers are much better, very small and compact and offer excellent reception in any area. The digital quality of the satellite radio has some amazing benefits on its own since there are no noise disturbances that were traditional to FM and AM broadcasts. Both XM Radio and Sirius Radio can be picked up on all the US territory and they are also available in some parts of Canada and Mexico. Since the direct line of sight from the satellite to the receiver may often become obstructed by landscape or buildings, land based devices were installed in order to eliminate the lack of direct satellite transmission The broad range of broadcast and the superior sound quality have taken satellite radio high in the preferences of the consumers. On the other hand, terrestrial radio has some strong points of its own. To begin with, it’s free and readily accessible to anyone. Also, terrestrial radio is so common, widespread and easy to use that anyone can enjoy it and most people don’t find it hard to actually create their radio stations. Many people are reluctant to move on to satellite radio, which is more complex and complicated.
The end consumer – the real winner
In this battle of the radios, the end consumer is the one that gets the most benefits. And since the competition got even more fierce when satellite radio started taking away subscribers of regular radio, things have gone one step further. Also, the competition between XM Radio and Sirius is in the benefit of the subscribers. An interesting aspect of the competition between the two satellite industry giants was realized by Interoperable Technologies - a joint effort funded by both Sirius and XM Radio, with the intention of bringing dual-subscription satellite radios to the general market. Analysts expect to see even more development in this direction, with XM Radio and Sirius entangled in a strange relationship, where they are working together on one project and battling it out on the satellite radio broadcasters market. In order to understand the way online streaming develops and the changes in the way satellite radios work we have to keep an eye open to the industry giants but also to the companies looking to obtain a license from the FCC. One thing is certain, however – no matter if satellite radio or terrestrial radio come up with new ways of attracting customers, the end users are the ones who will always come on top.
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