Satellite Radio as a Wireless iPod

Thursday’s Wall Street Journal had a piece on their front page (timed for the Howard Stern’s move to Sirius satellite radio) which talked about how record companies which had cut the satellite broadcasters sweet deals on royalties because of their limited reach are now beginning to regret it.

While existing models (such as the Sirius S50 pictured) have only 1 GB of storage, the newer units due out next year are said to be able to store much more. With certain "artist only" channels for Elvis and Bruce Springsteen, these devices will become a portable "best of" device that will allow subscribers to sift through the stream and edit out and save the best of what they hear.

Other features include:

  • “My SIRIUS” channels automatically generate custom content based on your listening patterns.
  • Sports Ticker shows scores from any play-by-play broadcast on SIRIUS while listening to your favorite content
  • Game Alert prompts you when your favorite teams play and score
  • One-touch access to traffic and weather reports for your city or use to tune to your favorite SIRIUS channel

Sounds pretty compelling to me but I’m sure a satellite recorder was not what the record executives has in mind when they cut these deals. I’m sure we’re going to see a round of talks where the record companies are going to try and hobble the devices so consumers can’t do what they want to which is to have the digital equivalent of a radio/cassette player.

If the industry was really smart, they’d realize that to go against the consumer’s wishes is just an exercise in frustration for both parties and it’s much better to leverage the momentum and use digtially recorded broadcasts as a sales channel. Add meta-data to each song, detailed liner notes with information on where the song came from, which album, which musicians, a graphic of the album cover, anything that might entice the listener to dig in more. Embed information on where you can purchase the album as a "call to action."

Then let the music travel. Not only allow it to be downloaded off a satellite broadcast stream to the subscriber’s receiver, allow it to be recorded and shared. You could lower the bit rate upon export but leave it otherwise unblemished so that it can be shared with the subscribers’ friends and sent around easily with the meta-data intact. If the file name is intact, you can also track where the file gets posted and use search engines to discover where your fans are and reach new audiences. Each posting of your low bit rate song will be a beacon for one-click purchase of a high bit rate version which you sell online or as part of a pressed CD package.

The future is bright, so long as you look at it right. The power of free markets and consumer utility will ultimately prevail. It remains to be seen how long the record companies will struggle will be to keep this genie in the bottle.

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