Between XM and Sirius, satellite radio is approaching 12 million subscribers. Unquestionably, satellite radio is a player in the industry. Satellite radio has the Clear Channels and Citadels of the world paying close attention as they compile strategies to offset potential cuts in listenership--and therefore revenue.
Clear Channel Tucson Operations Manager Tim Richards has been aware of satellite's inevitable arrival for close to a decade. Its advent has not caught him off guard.
"It's become a pretty big factor in entertaining the audience," Richards said. "Having that as an option is great for the consumer, and in some ways great for us on the terrestrial side. For the consumer, they get more choices, which is always going to be better. You have more options. From our side, having more competition causes us to be on top of our game and come up with ways to make our product compelling.
"People have been touting the death of radio since the advent of television. That was the '30s and '40s: 'TV's coming; it's going to kill radio.' In the '80s, 'Cable is coming; it's going to kill radio.' Now it's satellite and mp3.
"As it is now, revenue in the (Tucson) market is up 12 percent. Radio is not getting killed here. What's happening is we're being forced to find ways to keep our product compelling."
Richards touts the benefits of what he calls unduplicatable content. This is a lynchpin of the satellite radio model. Hence the publicity given to Howard Stern when he made the jump to Sirius. If you want Stern, you have to purchase Sirius to hear him. XM inked Oprah for the same reason.
"Sirius got a deal with Howard Stern. XM signed Oprah. These are two major watershed moments in satellite radio," Richards said. "For us, I think a lot of it is going to be the same thing, content that is not duplicatable. At KRQ, we have Johnjay and Rich. We also have local DJs for contesting and local traffic. All of these things threaded together create an experience you're not going to get on XM."
Without question, if the Tucson listener wants to turn on the radio to get a feel for what's happening in the community, satellite radio isn't going to get it done. But beyond unduplicatable content, satellite has other advantages. One, the music is commercial-free; satellite radio makes much of its money from subscriptions. That means it can play more music. Additionally, it offers somewhere in the neighborhood of 200 channels, at least a third of which are dedicated to a variety of music formats.
I have a subscription to XM radio, and while I like that it has a sports contract with a number of college conferences, including the Pacific-10, and while it has every Major League Baseball and National Hockey League game, I tend to listen most often to its music selection, even though XM recently scrapped the Music Lab station on its portable units.
Marginal whining out of the way, let's do a quick comparison. I grew up on classic rock, but to be honest, I'm sick to death of the format generally offered by terrestrial rock stations. These people have played the same songs every day for sometimes more than three decades. I can live without ever hearing "Freebird" again, or "Stairway to Heaven," or "Bohemian Rhapsody," or "Comfortably Numb."
XM, by comparison, has a classic-rock station, called Hot Tracks, but also offers Big Tracks, dedicated to what might be called familiar but not as regularly played classics; and Deep Tracks, which is basically an album-oriented-rock-radio-esque-style station reminiscent of '70s free-form FM radio.
Add to that The Boneyard, which plays its share of '80s hair metal, and Liquid Metal, a new addition that features more aggressive modern metal fare, and that's an impressive list of stations dedicated to one umbrella format. Other music formats have similar representation.
This is a double-edged issue for traditional radio, which has to battle variety and commercial load. However, Richards says there are changes in the works.
"One is less is more. The whole concept is we cut our commercial time back every hour," Richards said. "On a station like KRQ, outside of morning drive, we may have been playing something like 13, 14 minutes of commercials an hour. Now it's more like 10 or 11. We're playing more 30s, 20s, 15 (-second commercials), but it's adding up to maybe one more song an hour.
"The second is (high definition). I think HD is a flanking move that's necessary and could, in a lot of ways, stunt long-term growth for XM and Sirius. Every radio company that has the resources to do so will work to put their stations on HD. The sonic differences are pretty vast. It's night and day--crisper, cleaner, sharper, jumps out of the speakers. The signal of HD radio on AM is about equal to terrestrial FM radio. In addition to that is the ability to broadcast HD side channels."
High-definition receivers will be able to access what amounts to three channels on one signal. Beyond that, the signal degradation is too great. KRQ hopes to have its first side channel in operation by the end of the year. Other Tucson radio outlets are expected to do the same in the near future.
"While we fall under the umbrella of Clear Channel Communications, there is no mandate from above as to how we program our radio stations," Richards said. "The company has been great about giving the market-based operators the opportunity to program and run their stations to the best of their abilities, as long as they reach their ratings and revenue goals."