It’s almost hard to believe that satellite radio is a decade old this year. Actually the XM service launched in September, 2001 while Sirius launched service in four states in February 2002. I remember clearly the hoopla around the debut of this new radio service, and devouring a feature article about XM in Sound and Vision magazine. I actually first heard Sirius on satellite television when I subscribed to Dish Network around 2003, and then after that primarily heard the service in rental cars.

As I’ve noted before, it always seemed to me that the service didn’t quite live up to its billing as a richer, more diverse and commercial-free alternative to the declining quality of commercial terrestrial radio. For example, the XM Unsigned channel, which focused on up and coming artists who didn’t have big record contracts and was featured prominently in that 2002 Sound and Vision article, effectively disappeared in 2005 when it was merged with the more conventional indie rock XMU channel. As well, many listeners were disappointed when satellite talk stations first introduced advertising (although music stations remain free of commercials).

That said, I do understand how satellite is an attractive option for people who spend a lot of time on the road, especially outside major radio markets, and for listeners interested in exclusive specialty programming, like Howard Stern. And while it hasn’t always been smooth sailing, and it required a previously verboten merger of Sirius and XM, satellite radio appears to be on relatively solid ground as it hits its tenth birthday.

We’ll know more about just how solid that ground is on Thursday when the company will report its fourth quarter 2011 earnings and year-end results. Analysts expect revenue to be up around 6%, while its stock (“>SIRI) price sits at $2.12 as of close on Tuesday. While a little more than two bucks doesn’t sound like the best stock performance, it’s a significant gain from two years ago when SiriusXM was under threat of delisting from the NASDAQ as its stock dipped below a dollar.

Perhaps the company will have good reason to celebrate a month later, on March 9, when it throws a birthday concert with Bruce Springsteen at the Apollo Theater in New York City. The concert will air live on Sirius’ E Street Radio channel, three days after Springsteen drops his new album, “Wrecking Ball.”

The UK tech site the Register last week published an excellent two-article overview of digital audio from its birth to the post-Napster era, entitled “How digital audio ate itself and the music industry.” In part one writer Bob Dorman covers the first practical digital recorders used in studios. Part two picks up with the first home digital home recorders, such as DAT and minidisc, and digital sampling, taking the story through the modern post-Napster age. It’s a concise summary of the forces that have shaped our modern digital audio and music environment that, somewhat ironically, often finds artists searching to replicate the analog sounds and timbre of the past.

While not strictly related to radio, the question of digital vs. analog looms over broadcast radio as the commercial industry continues to try to push digital HD Radio, as it faces competition from all digital internet and satellite radio. But, as I must point out, with all of these technologies digital does not ever equal better sound quality. The advantage of digital is more often enjoyed by efficiencies the broadcaster can exploit rather than improved fidelity and experience for the listener.

It’s vitally important to recognize that every time a new audio distribution technology comes along, the word “radio” comes along for the ride. When the first live audio streams went online in the mid-90s, did everyone call this “streaming internet audio?” No, they called it “internet radio.”

In the early 2000s when Sirius and XM first lit up their satellites hovering above the earth did they call it “satellite audio?” That’s right, they called it “satellite radio.”

Sure, “podcasting” doesn’t have the word radio in it. But the one-time neologism was built upon the conflation of “iPod” and “broadcast.” The latter word is certainly very related to radio, which was the first form of electronic broadcasting.

What this all means is that we see radio as a thriving, evolving and growing set of media united by the common application of distributing–or, broadcasting–audio programming to masses of people. Radio is the transmission of audio entertainment, information and art across a variety of media and formats.

Reading this one might wonder, “well, then, doesn’t that make records, CDs, audiobooks and album downloads some kind of radio, too?” My answer is that they’re close to radio, but don’t qualify as radio.

While services like Spotify and Rdio have blurred that line between listening to an album and listening to radio, radio is still a different experience. Music radio, in particular, is about delivering a curated experience that is more spontaneous, less processed, and more ephemeral than an album, which is comparatively crafted and composed. Sure, progressive rock radio often featured album sides, but the more frequent programming were carefully chosen DJ sets. Music radio is about the mix. And even though Pandora and last.fm deliver a mix programmed by an algorithm, the listening experience is more like that progressive rock station than a CD.

It’s not for nothing that Spotify calls its automated music streams “artist radio,” and Rdio is a semi-contraction of “radio” that needs to buy a vowel.

A point that’s hard to avoid is that these forms of radio all hearken back to the modes of presentation first pioneered in broadcast. The DJ, talk show and music set all originated with broadcast. Internet and satellite radio unambiguously crib these forms with the only big difference from broadcast being their method of transmission.

Podcasting is a particularly curious case, because in my opinion its invention reignited interest in radio forms by making it so much easier to distribute programs. Podcasting also gave listeners a kind of radio TiVo by relieving them of having to tune in to a station or stream at a particular time. The clever innovation of the automated download freed radio from the tethers of the cable and the electromagnetic wave, be it FM, AM, wi-fi or cell.

In fact, the rise of podcasting breathed life into forms of radio programming that had barely been heard from since the 70s, like radio drama and long-form comedy. Turns out that the international reach of podcasting means a particularly esoteric show can find hundreds or thousands of listeners, even if there may barely be a dozen potential fans in the broadcast radius of a single station.

This is just my long-winded way of saying that here at Radio Survivor we take all forms of broadcasted and transmitted audio programming. We think that makes our website unique. There are plenty of sites that do a good job of covering the broadcast industry, a particular radio personality or music and radio. But we haven’t found any that consistently look at the whole wide world of internet, satellite and broadcast radio. To us, it’s all RADIO.

This also means we intend to keep expanding our coverage, writing more about new online services, ways to improve the listening experience, new radio technologies, along with our continuing coverage of broadcast. In particular I hope to see us write more about podcasts and podcasting, since we’re seeing more artists, personalities and producers make the decision to completely bypass the broadcast and satellite gatekeepers, self-producing and distributing podcasts directly to audiences.

Back in August we made a call for writers and contributors, and we’re still looking. If you’ve considered writing about podcasting, satellite radio, internet radio or other radio forms–not just broadcast–then drop us a line.

It appears that Sirius/XM satellite radio continues to bet its fortunes on big names, to the extent to which its willing to cut the salaries of its less well-known names. As we covered here, the big drama at the end of 2010 was whether or not the self-proclaimed King of All Media, Howard Stern, would renew his contract with the satellite radio provider. In the end he did, but the full financial terms of the contract still have not been made public. It was widely speculated that Stern was being pushed to take a hit to his salary, given how expensive it was to sign him five years ago.

It seems safe to guess that Stern probably came out of this new contract with even money. The key is probably his agreement to permit his show and dedicated channels to be offered on the Sirius mobile apps for the first time. But keeping Stern, even with being able to distribute his content more widely doesn’t come cheaply. Neither does signing Dr. Laura, Jamie Foxx and Oprah.

The pressure of these star salaries appears to have fallen upon Sirius’ second-tier talent. Most prominently, the Florida-based shock jock Bubba the Love Sponge Clem refused to renew with Sirius at the end of the year after being offered an 80% reduction in his salary. Reportedly making $1 million a year before, Bubba would have been cut down to $200 grand. Still good money for a morning shock-jock DJ, but I’m sure that would have cut into Bubba’s beer, porn and wild boar budget.

Bubba was featured on one of Stern’s channels, and this week Howard told listeners that he would like to see the Love Sponge return to Sirius. The big question is if Howard is willing to pony up his own cash or make other concessions to Sirius to make the deal happen.

What I find ironic about Sirius’ celebrity strategy is that it is so reliant on names that became famous in conventional broadcast radio and television. So far Sirius/XM has failed to find or nurture any radio stars on its own. Even many of the second-tier hosts, like Bubba and fellow shock jocks Opie and Anthony, defected from broadcast.

Yet, it’s arguable that a sizable percentage of Sirius/XM subscribers are not drawn in by names like Stern, Dr. Laura or Oprah, instead getting on board for the commercial-free music and other talk programming. This makes me wonder if the headline-grabbing celebrity signings are worth it for the service.

As a result, 2011 will prove to be a very pivotal year for Sirius, demonstrating if the big signings and renewals add any more subscribers than the previous few years. With 20 millions subscribers at the end of 2010, satellite radio is not a fringe service. But at the same time it’s still not an overall profitable service, either.

I’ve always been of two minds about satellite radio, especially since the merger in 2009. Yet, in addition to exclusive and ad-free content, satellite radio does offer a useful service for a lot of listeners, especially people who spend a lot of time in a car or truck. But I really wonder if the company’s pursuit of celebrity doesn’t thrust it down the same road the music industry got lost on, betting big on top artists, which can also mean losing big on them. I also wonder if the money spent on the Sterns and Schlessingers won’t take a toll on the less flashy channels, draining them of the qualities that separate satellite from the wasteland of commercial broadcast radio.

It should be an interesting year.

Howard and Sirius still stuck with each other

So much for the drama. Howard Stern announced this morning that he signed a new five-year contract with Sirius satellite radio, ending a protracted negotiation. He did not indicate how much the contract is for, only saying that it is “very fair.”

The end of this contract will be a different sort of drama since Stern also said that this will be his last five years in radio. Whether that means he’ll pursue other media opportunities or choose to retire altogether is anyone’s guess. No matter what he decides I’m sure that Stern will milk the mystery for all it’s worth.

Of course, this puts to bed the absurd rumor that Stern was contemplating a $600 million contract with Apple to distribute his show exclusively on iTunes. However, we still don’t know the terms of Stern’s new deal with Sirius, although eventually investors are going to want to know the details. There has been some speculation that a new deal would involve a little less cash and more stock, though the stock isn’t exactly performing its best. Nevertheless Sirius (SIRI) stock was up over 6% this morning following the news. I’m guessing that’s all the bump the stock is going to see unless it turns out Sirius got some real cash concessions in this contract.

We don’t know yet whether Sirius decided that a Stern-less future was too risky, or whether Stern realized that there are likely no more lucrative options than staying put at Sirius. Status quo is obviously the safest option for both parties, especially as Sirius closes in on celebrating the milestone of 20 millions subscribers. Losing Stern and triggering a possible exodus of possible hundreds of thousands of subscribers would have certainly marred the occasion.

Is Howard ready to stick it to Sirius?

Tuesday morning on his radio program Howard Stern reportedly discussed his ongoing contract negotiations with Sirius satellite radio, announcing that, “I am not taking a f—ing paycut.” His tirade was in response to comments made by Sirius CFO David Frear at a UBS investor conference where he hinted that a new contract with Stern might be for less money than his current $100 million a year. Frear also observed that the Stern contract happened in a climate where there were two competing satellite radio companies, whereas now there is only one. He said that as these contracts come up for renewal, “we’ll have the opportunity to get more favorable economic terms there.”

Last week a completely unsubstantiated rumor surfaced on Twitter claiming that Stern might get lured away by Apple, of all companies, in order to do an iTunes-exclusive show for even more money–$600 million. Despite the Columbia Journalism Review chiding journalists for reporting the completely anonymous tweet, the rumor took on a life of its own, with commentators left and right speculating about Stern’s next move, even if most doubt Apple would pony up that kind of cash for an exclusive deal with Stern. Nevertheless, even the Sirius CFO mentioned the possibility of Stern starting his own internet streaming channel.

The real question at hand is whether or not Stern and his power to draw listeners to Sirius is worth $100 million a year. I don’t doubt that Frear was testing the waters at the UBS conference to find out what investors might think of a Stern-less Sirius.

If Stern decides to walk away from Sirius I’m highly doubtful that he’ll find another company willing to pay him nearly as much to do his program, whether its online, on television or back on broadcast radio. He certainly could choose to go independent and online, but again, I’m doubtful he could gross anything close to $100 million anytime soon. Sirius’ gross income is only about eleven times Howard’s annual take, and the company’s got a couple of hundred other channels.

If Sirius decides that Stern isn’t worth $100 million annually, and Stern decides he won’t settle for less, it will be interesting to see if his departure costs the company. That $100 mil amounts to the price of 7.7 million monthly just over 641,000 annual subscriptions, about 39% 3.2% of the service’s current subscriber base. Are there really 7.7 million 641,000 Stern fans ready to dump Sirius if he goes? I really don’t know, and I’m sure that’s the question Sirius executives are trying hard to answer right now.

What we didn’t know last week when I last pondered the situation was if Howard was willing to accept less than his current salary. If one is to believe his tirade on Tuesday, the answer is, no, he won’t accept less. But Howard also trades in controversy and a willingness to bite the hand that feeds. So his on air comments might also be his way to stay in the news and stick it to Sirius.

Whatever happens may be a real test of both Stern’s star power and the value of Sirius’ entire slate of programming. It could also be a test of whatever medium Stern chooses after Sirius. The most boring thing that can happen is that he’ll sign that renewal.

Radio in Front of Pirate Cat Radio in San Francisco. Photo: J. Waits

What a year in radio it’s been!

Back in June, 2009, Matthew, Paul and I agreed to focus our energies on Radio Survivor in order to champion all things radio.

Coming from the perspective of radio fans, academics, and DJs; we’ve devoted much energy to espousing the virtues and lamenting the pitfalls of radio in all of its forms.

There is still hope for radio, not only in expected places like college, community and other non-commercial stations, but also in some free-thinking commercial stations, on the all-but-ignored AM dial, over satellite, online, and through mobile devices.

We think it’s been great fun over the past year, but know that we can always do better. To help keep us on our toes (and to help keep us around), we invite you to:

1) Send us suggestions on stories that we should cover

2) Follow us on Twitter, “Like” Us on Facebook, and tell your friends about us

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We appreciate all of the support, even if it’s just reading our site!

source: wikimedia commons

The great accusation fest which is the struggle between Sirius XM (SIRI) satellite radio and a host of wireless companies went to its next round on Friday, with Sirius accusing the companies of “warehousing” their licenses nearby the service’s bandwidth:

“There can be little question that WCS [Wireless Communications Service] licensees have warehoused spectrum in hopes of receiving regulatory relief to allow them to deploy mobile broadband services – even though such services are precluded under the WCS technical rules the Commission adopted in 1997. The WCS licenses sold for only $13.6 million in the Commission’s 1997 spectrum auction, in large part because of the restrictions the Commission established to protect satellite radio and other adjacent radio services. WCS licensees that have ignored their obligations to build out their spectrum now stand to collect a windfall profit as the Commission considers rule changes to now allow mobile use of the spectrum at the expense of increased interference into the Satellite Radio service. That profit is magnified by the minimal investment in equipment testing and development that WCS licensees have made over the past 13 years.”

Warehousing in spectrum-talk means just sitting on your licenses until you can sell them at a profit or engage in some similarly unproductive activity.

To recap this story for the umpteenth time: the problem here is that licenses in the WCS band and Sirius XM’s SDARS band are scrunched pretty close together, and the FCC fears that SDARS terrestrial repeaters could cause interference to WCS operations. WCS represents Comcast (CMCSA), AT&T, NextWave (WAVE) and other companies that want to launch WiMAX mobile services in their portion of the 2.3 GHz zone.

I’ve tried to stay relatively neutral about this issue, but accusing these companies of warehousing seems a little unfair. The WCS Coalition, which represents them, has been trying for years to get new rules that would allow them to roll out WiMAX on that 20 MHz of band. It certainly seems like that would be the best use for those licenses. So it’s still up to the FCC to get both parties to agree to sensible non-interference rules, and meanwhile try to duck while the accusations fly.

Sirius CEO Mel Karmarzin attributes the rebound to “the broad appeal of our unrivaled programming, the benefits of a recovering auto industry and an improving economic environment for consumers.” I’d reckon that increased car sales is probably the biggest factor, given that satellite radio is heavily dependent on its appeal to drivers, most of whom still can’t listen to internet radio while on the road. The downside of this reliance is that the first year or so of satellite radio service for a new car is free. The real sign of recovery will be whether or not these new non-paying subscribers re-up when they have to shell out for it. For the quarter that just ended 45.2% of customers decided to stick around and pay, which is a little better than the 44.6% who did in the first quarter of 2009.

The news caused Sirius stock to bump back up over a dollar today for the first time since February. Nevertheless, the company remains delisted from out of compliance with NASDAQ. It will be interesting to see if Sirius’ subscriber base grows over its 2008 level again, or if 19 million ends up being a plateau. Satellite radio faces very still competition from mobile broadband this year as higher-speed 4G rolls in many major cities and those first Pandora-capable car radios hit the streets.

After languishing in near-penny-stock territory for the last year, Sirius XM Radio stock hit the dollar menu on Wednesday, topping out at $1.05 a share. Investors who bought their stock a year ago when it sold for less than 20 cents are probably cheering. Sirius hasn’t seen the plus size of one buck since September of 2008.

The prevailing opinion on Wall Street seems to be that investors think Sirius XM has finally gotten its financial affairs in order, along with adding a net of 257,000 listeners–more than expected–in the fourth quarter of 2009.

There also seems to be a growing confidence that, despite all the recent hoopla, Howard Stern will sign a new contract with Sirius. I don’t really understand how that’s a strong sign of strength for Sirius, although I guess it can be seen as a indicator of stability. If Sirius has to cough up another $300 million to keep Stern I really wonder if it will really be worth it. Even given Stern’s recent headlines over his claimed invitation to join American Idol, I doubt he has the magnetism to draw a significant number of new listeners. At best, Sirius can hope to hold onto the current crop of die-hard Stern fans.

But, then again, getting the stock price over $1 is only a relative achievement. Although the increase will likely help the company avoid a reverse stock split. Sirius’ viability will depend on how costly it is to retain Stern and how well it can continue to add listeners, despite very few new receivers being announced at last month’s CES.