Prediction: Two years left for satellite radio

This is not coming from a competitor in AM/FM radio. In fact, it’s from a fan whose family has two Sirus or XM subscriptions. But Mike Elgan, a columnist for the respected IT trade publication Datamation, wrote: “I hate to say it, but somebody has to: Satellite radio will come crashing down to Earth within the next two years.”

Elgan says satellite radio has gotten better, with smaller receivers and new features. And he’s a fan of the exclusive content that suits his tastes that’s not available on AM/FM radio. But the world is moving to fast for satellite radio to keep up. “The ugly truth is that satellite is simply an obsolete way to deliver sound,” he wrote. In his view, satellite radio is “already living on borrowed time – and borrowed money – and simply will not and cannot survive.”

He spells out six trends that will “kill” satellite radio. Five deal with technological changes, such as MP3-compatible cars and in-dash mobile broadband, that eliminate the need for audiophiles to have satellite radio. And #6 is the “cratering” economy. He questions whether Sirius XM will be able to refinance $1 billion of debt in 2009 “in the most hostile credit market ever” – and, if so, only “to buy time for some unspecified future miracle.”

It’s an interesting take on satellite radio’s future and you can click here to read it.

RBR/TVBR observation: We’d previously thought both XM and Sirius had about five years left as standalones, but that the completed merger might extend that to nearly a decade. But all bets are off in the current economic meltdown. Elgan offers six reasons why Sirius XM has less than two years of existence left – but #6, the economy, could be the one that hits hardest and fastest. Have an opinion on this article? Post your comment below.

Tweet