How the iPhone will kill XM and Sirius

It’s over.

I’ve just spent about 30 minutes in my car and the very thought of buying XM or Sirius satellite radio has been purged from my mind forever.

Internet radio on your iPhone will doom XM and Sirius. It will get to the point that the only saving grace they will have is the fact they have long term contracts with Howard Stern and some sports programming, but in a matter of years, when they lose the exclusivity to their audio content and the iPhone will drop even further in price, there will no longer be any reason for either, unless you are a long-haul trucker plying those bits of the Interstate that still do not have cell phone coverage.

I’ve downloaded all of the Internet radio applications from the iPhone application store. I have the version one iPhone which works on Edge, but pretty much any stream under 32k will come in just fine at that speed. Still, even with reduced speeds, the offerings are extensive.

I drove to the store listening to Virgin Radio out of London. I heard ads for ‘insurance cover’ for your auto from AA of England (maybe I should buy as I almost hit someone). I switched over to di.fm, the best Electronica station out of New York to hear the content you won’t hear on American radio stations. I then flipped to AOL’s radio plug-in and heard 1010WINS traffic (sorry for those in the Holland tunnel stuck in traffic right now).

I predicted this long ago (yes, I own the domain name ‘phoneradio.com’). But with iPhone’s ease of use, mass marketing power, and legion of adoring fans, I foresee the demise of the big satellite radio companies in just a few years. Radio is just a ‘free’ ad-on to the other services you get with the iPhone. There are very few business models that can compete with ‘free’, and XM and Sirius’ limited offerings are not one of them. There are a few out there who can’t see the forest for the trees, (’the iPhone is too expensive’, ‘the monthly service plan too costly’), but these same people did not foresee the iPod either.

Satellite radio is not network radio. It requires massive expenditures of cash to basically recreate ‘towers in space’. It’s not about getting your connectivity wherever you can (i.e. edge, 3g, wifi, dsl, cable). It’s a massive infrastructure and canned content deliver via satellite in much the same manner as radio has been done for 100 years. It’s an expensive and fancy recreation of existing broadcasting, not the future of broadcasting.

Sorry about the billions you spent throwing your birds in orbit.

UPDATE: More here on the future of radio with the iPhone, not just from me but also from Doc Searls of Linux Journal

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