| 6th September - With all the talk about convergence, it is
surprising that our industry’s attention is still grabbed
by a few chosen technologies and applications. Satellite radio,
for instance, continues to remain in the shadows, not acquiring
mainstream attention. It is worthwhile directing our focus to
the intriguing world of satellite radio, and examine how it
is likely to impact the industry.
Satellite radio services offer crystal-clear, CD quality
sound across their bouquet of channels, from satellites located
at a distance of 35,000km above the earth’s surface.
They operate over the 2.3GHz spectrum in the US and over the
1.4GHz spectrum in the rest of the world. A typical satellite
radio infrastructure includes satellite(s), terrestrial repeater
stations and individual radio receivers. Monthly subscription
ranges between $12 and $15, while the radio receiver itself
costs anywhere between $30 to $400. The stage is dominated
by three players: XM and Sirius in the US and WorldSpace in
Europe, Africa, The Middle East and Asia. WorldSpace holds
a stake in XM, one of whose other stakeholders include General
Motors. XM claims a subscriber base of around 7 million, while
Sirius claims it has more than 4 million subscribers. WorldSpace
has less than 200,000 subscribers (90% of which are from India),
but has been displaying 150% year-on-year growth.
Satellite radio does not operate in an isolated ecosystem,
and initiatives to integrate it with the mobile phone are
already in place. For example, XM allows its subscribers to
access their music online, and this music can then be beamed
to a mobile device with a GPRS connection and Windows Media
player (version 9 and above). This service, named MusicDock,
converts the mobile phone into a virtual satellite radio receiver!
Sprint has partnered with Sirius since September 2005 to make
20 of Sirius’ music channels plus a channel devoted to
artist interviews and exclusive guest performances available
to its subscribers. This service is available to Sprint Power
Vision and Sprint PCS Vision subscribers. Alltel has followed
suit and in August 2006, launched a partnership with XM Radio
with 20 channels available for a monthly subscription of $7.99.
This service is offered to customers through MobiTV, the digital
radio service provider for cellular devices, and consists
of a Java application that runs on the mobile phone and XM
Radio content, sourced from licensed content providers. Handsets
that support this service include Kyocera KX5, Motorola E815,
Motorola V3c, RAZR, Motorola V710, Nokia 6235i and Nokia 6255i.
While the above steps indicate only an indirect penetration
of the satellite radio into the mobile phone, more radical
steps are underway. NTT DoCoMo, one of the most innovative
wireless operators, has introduced handsets with integrated
satellite radio receivers. It has been offering satellite
radio reception on Music Porter X handset from Mitsubishi
Electric since April 2006, with content sourced from Mobile
Broadcasting Corporation, a Japanese satellite radio operator.
A 15-channel package of programming is offered to users for
980 yen ($8.30) per month.
Going further along the path of network-level integration
between satellite radio and wireless networks, Lucent Technologies
has recently filed a patent to enable mobile phones to receive
radio feeds directly from the satellite. The feed is carried
on the existing bearer channels, just like a voice call, and
additional bearer channels can be dedicated to the radio feed,
to allocate higher bandwidth. A gateway is located between
the mobile switching centre and the satellites, and a single
billing statement is presented to the customer, comprising
of the charges incurred by the customer for the services of
the satellite radio provider as well as the wireless operator.
IBM, VoiceBox and XM are in the process of building a solution
that enables drivers to communicate with XM Satellite Radio,
through speech. The solution integrates IBM’s speech
recognition engine with VoiceBox’s navigator, which is
a tool that runs algorithms to determine the user’s context
and intent based on the speech inputs. The user can interrogate
artist information, stock values, sports updates and other
data as well as issue commands about changing the channels.
The product is expected to be available by the end of this
year. Although, the traditional target market for satellite
radios has been the car owners, satellite radio operators
provide a wide range of standalone radio receivers to choose
from. XM has entered into a partnership with Google for automatic
insertion of adwords into its non-music commercial channels.
This arrangement opens up XM’s customer base to Google’s
advertisers.
Satellite Radio has its fair share of controversies. XM has
run into a lawsuit filed by the RIAA (Recording Industry Association
of America) over its alleged copyright violations. RIAA claims
that XM’s Inno device, capable of storing music and dividing
it into tracks, infringes copyrights. RIAA is claiming a whopping
$150,000 for every song copied! XM, on its part maintains
that music stored in Inno is non-transferable and is available
to the subscriber only as long as the subscriber remains with
XM. XM has also been in the news for the FCC enquiry initiated
against the unacceptably strong wireless signals of its devices.
The financial performances of the Satellite Radio majors have
been pretty dismal. XM lost $667 million and Sirius lost $863
million last year, leading to demands for a merger between
the two companies. WorldSpace 2Q 2006 losses stand at a poor
98 cents/share.
All the challenges surrounding its existence notwithstanding,
you have to admit that satellite radio has brought together
disparate entities like car majors, wireless operators, search
engines, content providers, ISVs, electronic equipment vendors
and others to the same table. If this is not convergence,
what is? Be prepared to hear more about satellite radio as
the war for content attains exciting proportions.
|
