Sirius: should we be worried?

I was pretty excited when the CBC-Sirius deal was announced in Dec 2003. All my radio-loving American friends were praising the ad-free, excellent music on satellite radio, and no one seemed to care about the subscriber fees. Rabinovitch said:

By expanding the choices available to Canadians, this new service will enable the national public broadcaster to better fulfill its mandate by extending its reach and enhancing its services to Canadians.

What’s not to love?

I heard some people talk about low sound quality because Sirius was running 100 channels on bandwidth more appropriate for 50 channels.

Then eureka 137 posted some good questions about the 100,000 Sirius subscribers:

Now, at roughly 100 channels, that’s 1000 subscribers per channel. Which is a crummy way to estimate things, although frankly it seems fair to estimate that CBC’s Sirius services have below average listenership, compared to the rest of Sirius.

So, exactly how much is being spent on channels that have no more than a thousand listeners per channel, probably far less?

How many hundreds of thousands (millions?) of dollars are going to subsidise a venture that serves only a handful of people, who, subscription or no, can’t possibly cover the costs? Money is leaking out of core services to fund this project.

Then last Friday in the Globe, there was an article titled Satellite radio looks to long haul:

The first full-year glimpse of how Canada’s nascent satellite radio industry is faring has emerged, and the picture is one of deep startup losses.

CSR’s Canadian rival, Sirius Canada is privately owned and does not disclose its financial figures. Both companies have indicated they expect to lose money in the first few years.

How did that happen? Can a public broadcaster be a private investor? Is that even legal?

However, Canadian Satellite Radio (CSR) chief executive officer John Bitove said CSR expects to hit one million subscribers by 2010 and suggested the company could be profitable in the next few years.

2010?

I realize that at least our short-term goal is not to make money. It’s a mandate thing, right? And tapping into those American viewers wouldn’t hurt. But by that measure, with these numbers, it doesn’t seem to be working. And a lot can happen between now and 2010.

Will subscribers wait that long? Will someone invent something better? Will the internet go into hibernation? Will our own moneymaking digital TV station Galaxie knock out our own moneylosing digital Radio stations on Sirius?

This is starting to look like our own private Afghanistan.

But is it too late to cut and run?

Nov 22 6pm addendum
A few hours after I wrote this, Sirius Canada announced that it has 200,000 subscribers.
~O

12 comments:

  1. Johnny Happypants
    Posted November 22, 2006 at 7:33 pm | # | Reply to this masterpiece

    I’m a Sirius subscriber and I love it. The quality’s great and the choice is amazing. The CBC should be there (and on XM, too, for the rural and suburban set that like THAT kind of music). What we shouldn’t be is an owner. And we shouldn’t own/run Country Canada Channel, or the Doc Channel, or any other channel Corus is smart enough to divest itself of. We can’t even run our core service properly anymore.

  2. Allan
    Posted November 22, 2006 at 6:42 pm | # | Reply to this masterpiece

    just needed to fix a link, because I care about your internet experience

    what will content become?
    Answer: It’ll be Al Jazeera and the All Jizz network.
    (hey, that’s funnier than anything ,Michael Richards said)

  3. Justin Beach
    Posted November 22, 2006 at 5:31 pm | # | Reply to this masterpiece

    I’ve said it before and I’ll say it again. The CBC needs to stop worrying about CTV and Global, Canadian programming now has to compete with all of the programming in the world (it’s only just beginning) – the Internet and related technologies will see to it that anything made anywhere is available everywhere, all the time so CTV and Global (who primarily buy US programming) have their own problems.

    The CBC must grab and keep viewers by first figuring out who their customers are. By this I mean finding their niche, not trying to appeal across the spectrum. The market is fragmenting to a point where the Lowest Common Denominator is itslef becoming a smaller and smaller niche.

    Once they have identified that niche they must offer them the best programming they are capable of making (for that demographic).

  4. Allan
    Posted November 22, 2006 at 5:00 pm | # | Reply to this masterpiece

    Satellite radio – Oy veh! – don’t get me started.
    OK, you already did.
    It was baffling to see the CBC being part owner of Sirius, but I assume it had something to do with wanting to get a Canadian grip on a technology and service that was inevitable. Either get on board or get out of the way as an American company gives your people what they want.
    And who else would/could risk investing?
    Of course now I can hold the CBC responsible when Howard uses the F word.

    Why would anyone want another utility bill just for the sake of a random muzak service? And after all, isn’t this iPod territory?
    Well, I’ve tuned in.
    But for one reason only. To hear what I can’t hear elsewhere. And that’s Howard Stern.
    Yet more specifically, it’s to hear people speak and ideas being expressed without lame excuses and beeps covering the expletives of a Kramer rant ( because I want to hear it and judge for myself! ) and telling parents to tell their children to leave the room ( the dumbest thing I’ve ever heard ) because something naughty is going to be presented.
    I want to hear people speak freely, honestly, frankly and sincerely.
    I want Jann Arden.

    Looming larger still on our tsunami of technological reverberations that are, possibly, changing the essential content of media , is the introduction of the devices known as Stiletto 100’s, a portable device that delivers satellite services anywhere in the world.
    When this device goes from radio to television, what will content become?

  5. Anonymous
    Posted November 22, 2006 at 3:52 pm | # | Reply to this masterpiece

    Delivery systems and platforms are trivial concerns. Content is, and has always been, the only issue. Who cares how the audience gets it, only that they care to. And what if you had a network, and the content was so poor, nobody came. Priorities are severely out of whack. Make some good stuff first, have these debates later. It’s interesting that no one in this discussion has connected the lack of audience to the material on offer.

  6. Anonymous
    Posted November 22, 2006 at 3:01 pm | # | Reply to this masterpiece

    Someone mentioned in an earlier comment about Sirius Radio being some kind of mandate. If so, what was the mandate? Was it to acquire handful of American subscibers or was it to make CBC radio more accesible to everyone? I don’t really think it’s succeeded in either case. If you live in the middle of nowhere Canada, do you think you are clammering to shell out bucks for a sirius satellite radio AND a subscription fee for something with 2 CBC stations on it? Something you get for free anywhere else ? uh-huh
    At one time I thought I heard Jane Chalmers mention something about satellite radio being the new medium for the defunct Radio 3. That doesn’t seemed to have happened either and as mentioned earlier, young folks have lots of other means to get this stuff.
    I think the CBC should dump Sirius like a hot potato. Its a waste of money with no real targeted or sizable audience.

  7. eureka 137
    Posted November 22, 2006 at 1:59 pm | # | Reply to this masterpiece

    Well, I’m glad you think this is worth talking about. I’ve been grinding away in the radio service for a long time, and it’s always been a bizarre mix of overfunded and underfunded; guess where I live! And every time my shows get cut back, something ridiculous and expensive is building up somewhere else in the company.

    I don’t have any objection to Satellite radio, or to the cbc being involved in it, with the one caveat that I think Sirius and XM will inevitably have to merge, if there’s any future for this medium. It’s starting to look a lot like Iridium, the once bankrupt satellite phone network.

    What I do object to is robbing core services to fund a project that serves almost no one. As for the CBC being a private investor, it’s true, I believe we had to get permission from the federal cabinet to actually buy the shares.

    So, I guess this means the auditor-general can’t look at their books, even though it’s a company partly held by a crown corporation? Is there any oversight at all? Frankly I’m more worried about the money being spent on CBC-Sirius channels, which is part of our budget, and as far as I can see is just money being shot out into space.

  8. Anonymous
    Posted November 22, 2006 at 11:50 am | # | Reply to this masterpiece

    I don’t get it. If the CBC is available on Sirius internationally, how relevant are Canadian subscriber numbers?
    Also, did the CBC invest directly in Sirius, or are they just a content provider compensated with a percentage of subscriber revenue (like Country Canada on cable and satellite)?

  9. Anonymous
    Posted November 22, 2006 at 10:06 am | # | Reply to this masterpiece

    SIRIUS Canada Inc., announced today that it has surpassed 200,000 paying subscribers nationwide during its first year of operation.

  10. Justin Beach
    Posted November 22, 2006 at 9:19 am | # | Reply to this masterpiece

    I don’t think it (Sat Radio) has a long term future. You can already see the beginnings of it, but in 5 years you will be able to have not only MP3’s on your cell phone, and TV shows but will be able to browse streaming channels (tens of thousands of them around the world) – now, given their own private music library, and their own private video library, and thousands upon thousands of free radio and tv stations how many people will keep paying for a device that is not portable , and has only a single function? It just doesn’t make sense. The Dragons would shoot it down in a heartbeat.

    Sadly, even if I’m wrong about all of that, by every account I’ve heard XM is better.

  11. P
    Posted November 22, 2006 at 8:46 am | # | Reply to this masterpiece

    Good. Each one of those costs us for bandwidth. On Sirius, it costs them.

  12. Anonymous
    Posted November 22, 2006 at 8:22 am | # | Reply to this masterpiece

    Assuming that 1000 people listen to CBC Radio on sirius.. thats still 5 times less the number of people who listen to radio one online at CBC.ca


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