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October 15, 2008
Who needs XM?
XM is dead. No not for what you think. Not because it is a bad business with high overhead and a scale problem. Not because the two satellite radio companies had to merge to cut cost and fix prices. No the whole model has been killed by the iPhone. Sure XM has some unique content, but if there is any life at all, it will be as a content network like HBO rather than as as an operator of a physical network.
So how did the iPhone hollow out XM's business? Pandora. I was driving up to the mountains Friday to go camping. Out in the woods the radio stations all got scratchy and country. So I plugged in the iPod to the car stereo and played the Genius playlist for awhile. I have over 8GB of music on the iPhone, lots of playlists, and the Genius playlist generator which does a great job. Do I really need to pay another $9.99/mo for someone else's playlists over another network? So I already have most of all the music content I want in the car resident locally. Strike one against XM. Well what if I want something I don't have in the car? What networks are available? Well XM is, but the cellular data network is available more places and it is ALWAYS with me, not just in my car. So I click over to the Pandora application and choose a station. It starts streaming immediately over the cellular network through my car speakers. All free (included in a device I am already paying for). No new car hardware needed, no additional subscription. Strike 2. Want to listen to your favorite radio stations back home while on the road? Download radio 105 or NPR radio iPhone application and you are set. Strike 3. XM is dead.
Posted by Martin at October 15, 2008 6:50 AM
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