Here's a good article from my local paper today regarding the state of the satellite radio industry. There are two reasons I'm holding out hope that the key players, XM and Sirius, can create successful business models. First, I own an XM player and I totally love it. Great product, great service. Second, and more importantly, local radio stinks, period.
The scariest fact from the article above is the point that subscriptions were down in 2006 compared to 2005. Ouch. What little momentum XM/Sirius had recently is now apparently long gone. Despite all the listeners Howard Stern brought with him, I've got to believe Sirius doesn't consider that deal to be a great investment. Both companies have been spending money at an insane rate, trying to lure new subscribers, but they obviously can't pedal fast enough.
What to do? A big part of the problem is also highlighted in this article: Even as a gift, satellite radio is an awkward product, thanks mostly to the never-ending subscription fees. Sounds like your typical cell phone, no? I mentioned this before and I keep coming back to it: The only way I see satellite radio "crossing the chasm", "reaching the masses", or whatever trendy phrase you want to use, is to marry it to a cell phone package. Most consumers don't think twice about adding the latest, greatest new feature to their cell phone plan. If convergence is really the name of the game, why not put the satellite radio electronics in a cell phone and add $5 to the monthly fees?
(Btw, that Sprint Ambassador program I got to test last year included a stripped-down pseudo-satellite radio service, but the signal came through the phone line, not direct from the satellite itself. The stream was unreliable and the channels were very limited, so it's not a fair test and I'm betting Sprint doesn't have too many subscribers for that feature.)