Over the extended holiday weekend (at least for us), we read an interesting editorial by Dave Wilson from WHDX FM and WHDZ FM in RadioWorld. In the article he argues that terrestrial radio broadcasters should pool together their resources and buy Sirius XM.
We are not sure if this is a case of Schadenfreude on the part of a terrestrial radio veteran who is enjoying seeing satellite radio take a beating in the stock market. But assuming that he is serious, does this make sense?
He indicates that at the current market cap, Sirius XM could be bought for between $100k for a small market Class A station and $1.8 million for the largest high-powered FM station. Given that some large market radio stations are pulling between $30 and $70 million a year, this expense to co-opt a major competitor seems reasonable.
We think, however, that this would be a waste of money. Here is why:
1) Terrestrial radio already has better spectrum...as anyone who has tried Sirius indoors can tell you.
2) For the largest broadcasters, creating a national station is already possible. In fact, one of our early posts argued that HD2 stations should do exactly this.
3) Satellite radio does not address the biggest threat for terrestrial radio...namely the Internet and its unlimited and user-controlled options. Sirius is just another BROADCAST.
Given these points, Dave would be better off arguing that all the stations should get together and spend this money on more promising alternatives.
Of course, we have some ideas:
1) Better programming for HD2 stations
2) Fulfilling RadioSherpa's dream of a consolidated programming guide for both online and OTA broadcasts
3) Even an upgrade of existing HD Radio infrastructure to accommodate increased broadcasting power...which we are sure iBiquity would also love.
Monday, January 5, 2009
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1 comments:
"Even an upgrade of existing HD Radio infrastructure to accommodate increased broadcasting power...which we are sure iBiquity would also love."
With the state of the economy and with many radio stocks in the penny-stock range this will never happen. As NPR pointed out, this will cause massive interference to analog stations, where all of the money is being made - yea, bring it on and watch terrestrial radio implode. Maybe a good thing - I'm sure that the IBOC hash on AM is just driving listeners away in disgust, so the same will happen on FM. Great mentality!
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