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Satellite Radio Comes of Age

I had lunch on Friday with Steve Blatter. Steve is an old friend of mine, who now oversees the programming for Sirius/XM. Steve is a very bright guy, who came out of terrestrial radio. I first met Steve when he was programming a really good radio station called X107. The station was a suburban New York station that did not have the strongest signal, but could be heard where I lived in Saddle River, NJ. It was a modern rock leaning station that played a lot of independent rock bands and unlike most radio stations at the time, was consistently interesting. Most of that came from Steve’s love of music. Steve and I had several long discussions back in the late 90’s about X107’s failure to play whatever was the current Bruce Springsteen album at the time. Steve felt it didn’t have a place on his station…I of course disagreed. I think at this time legitimate arguments could be made for both sides of the discussion.You would think that loving music and programming music radio stations go hand in hand. That is not always true. But to my thinking, when you have a guy calling the shots who is also passionate about music and especially new music, that always makes for a better product.

I’ve been a big supporter of satellite radio since the beginning. Somewhere around 1999, Lee Abrams, who was then a principal of XM came to our offices and gave a presentation. After Lee’s presentation it was obvious to me that satellite radio was going to be a big player in the future of music. When given a chance of listening to radio stations with heavy commercial loads or carefully niched formats with no commercials, I was confident the consumer would pick the commercial free world every time.

I was so impressed with Lee’s presentation and other stuff that was going on with XM that I went to their launch party Washington. Quite an affair. Lots of guys in suits, Aretha Franklin singing, great food, all in the rotunda of Union Station in Washington D.C.. But oddly enough I did not see a single record label exec besides myself. I felt that satellite radio had a bright future and I bought a bunch of stock at around $45 a share. Okay, so maybe it wasn’t the best investment, but I had a gut feeling.

Let’s fast forward through the next 10 years. The two satellite radio companies Sirius and XM fought it out. The market simply wasn’t big enough for 2 companies essentially doing the same thing. Both companies found themselves in grave financial difficulty. The product was good, but the problem was people still primarily listened to radio in their cars. The two systems had pretty much split the automotive landscape, one company getting Mercedes, the other getting Dodge. There still weren’t enough people buying new cars with satellite radio to make anyone happy. The radios you could buy after market looked a lot like the old FM converter that I had in my 1972 Vega. If you had a BMW, you were not likely to install one of these cheap looking devices. So the penetration into the market place just wasn’t there yet.

Howard Stern jumps to Sirius. In anticipation of all of Howard’s 15 million plus fans subscribing to Sirius, I bought Sirius stock. My XM stock had long since been sold for around $16 a share. XM was cheap!!!! Around $2 a share. How could I miss? So against the advice of my broker I bought a decent amount of stock in Sirius. It climbed to $9 a share. I didn’t sell and it fell back to around $1.75. Strike 2 for Jim.

I couldn’t understand and still can’t, why it wouldn’t be worth about $10 a month for all of Howard’s fans to hear him on Sirius. The handcuffs would be off and Howard could really say all the things he couldn’t while he was on terrestrial radio. Howard’s show is as good as ever and finally a lot of his fans decided to subscribe, once they got their next car. But it has taken several years.

About three years ago, it was obvious XM and Sirius had to merge in order to survive. Mel Karmazin, radio guru and financial genius came on the scene. After the merger, finally it seemed that the future of satellite radio was secure. This solvency combined with the fact that after 9 years enough people have bought new cars and decided to keep the satellite radio that the manufacturer had provided.

So, now we finally have national radio with a large audience. There are no Arbitron ratings for satellite radio, which is both a good and a bad thing. The good thing is that the programmers don’t have to worry about ratings. The bad thing is that you never really know how many people are listening. The only way you can really tell is when you get a reaction to some of the things that they are playing or saying. But the good far outweighs the bad. Also, Steve and his programmers are actively thinking of ways to develop artists and break new music. They are even trying to find ways to help superstars grow their bases. Right now, Steve and his team are trying to figure out what new Bruce Springsteen track they can play across multiple formats. That is something that never gets discussed at terrestrial radio. But without the constraints of ratings, they are free to get creative. That can only be good for musicians.

Blatter hired a bunch of people to program the various music channels. These people tend to be former terrestrial radio people that all are passionate about music. So there is a lot of new music heard on Sirius/XM. Basically, “Alt Nation” which is a modern rock channel has become the biggest alternative radio station in the country. When they play an artist or band, the audience reacts. The measuring stick these days are Itunes downloads, usually singles. In the pop world one of the largest acts around the globe is a ‘Boy Band” named “One Direction”. Sirius/XM has played a major role in their success, having played them for six months before much of anything was going on. There is a new music channel named XMU that plays unsigned acts with a frequency that allows listeners to come to know them. Another good way for new bands to get “discovered”.

My favorite channel is E Street Radio. Obviously, my connection to Bruce draws me to this channel, but between the “two guys sitting at a bar” style of Dave Marsh and Jim Rotolo, who run the channel, the conversation is just as good as the music. Since I am a Baby Boomer, I also end up on either Classic Vinyl or The Bridge fairly often and I find Soul Town a lot of fun as well.

There are still some holes. I would love to see an Alt Folk channel. I really believe this music is going to really end up being the main rock format in the very near future. Artists like Amos Lee, Brett Dennen, Carolina Chocolate Drops, Alabama Shakes and others should be major stars. The problem is there is no place, besides your iPod to go hear this music with any sort of concentration. There is some played on the Loft and The Spectrum, but the listener has to wade through too many artists they don’t care about or openly dislike to hear their favorite artists. There is also a big hole for a “Tween” station. One that plays Justin Beiber ad nausea. Moms riding in their minivans with their teen aged daughters would be glued to this station. Radio Disney is the only real competition and they have signal problems in most markets.

Terrestrial radio, like many businesses, is trying to find a way to survive in the digital age. The morning shock jocks and afternoon drive shifts are paying the bills. Satellite radio has the same competition for the listener’s attention. Why should someone want to listen to what someone else is telling them to listen to, when they can put on their iPod and listen to whatever they want. There is probably no way to solve that problem. But, as music fans, we win either way.

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About jimdelbalzo

As the former Senior Vice President of Promotion at Columbia Records and now founder/helmsman of the artist management company-Jim Del Balzo Entertainment, Jim has managed, consulted, and developed/executed the promotion and marketing plans for some of the planet’s most beloved musicians. He has guided the careers of artists/acts such as Bruce Springsteen, Pink Floyd, Billy Joel, Bob Dylan, Alice In Chains, James Taylor, George Michael, Soul Asylum, and System of a Down; to name just a few. Jim also does consulting for labels and publishing companies including Columbia Records, Warner Brothers/Reprise Records, Hear Music/Starbucks, EMI Music Publishing and several other entertainment entities. Jim Del Balzo Entertainment clients include,  John Mellencamp, Elvis Costello, James Taylor, LL Cool J, Burt Bacharach, City Sleeps, Buddahead and Since October.     Jim’s highly successful career and great service to the music industry has earned him a number of accolades and awards over the years. Namely, he was voted one of the Top 25 Most Important People in Rock Music (2000) and Promotion Executive of the Year (5 times) by Album Network—from which he also received a Lifetime Achievement Award. And Clear Channel twice honored Jim with the Executive of the Year Award while Friday Morning Quarterback and Radio & Records named him Top Industry Executive 7 times combined.   Today, Jim Del Balzo takes his talent to the microphone, adding voice work to his remarkable repertoire. His promotional expertise and attuned top executive instincts-combined with his richly unique sound- delivers VO that is truly somethin’ else.   Jim Del Blazo VO.  Like nothin’ you’ve heard. Like nobody’s business.   Jim lives in Saddle River, New Jersey with his wife Mary Beth, daughters Jessica and Julia, and their two golden retrievers.

Discussion

2 thoughts on “Satellite Radio Comes of Age

  1. I always bring my satellite radio wherever i go because it is great listening to music.^

    <a href="My personal web blog
    http://www.prettygoddess.com

    Posted by Rhea Belfiore | November 21, 2012, 12:03 pm
    • Hi Rhea. Thanks for commenting on my blog. I love satellite radio too. It is not perfect, it is still someone else guessing what I may want to listen to, but it is pretty good. I am curious. What stations do you listen to most. I am sure my friends at Sirius/XM would like to know as well. How did you find my blog. If you like it, please share it with your Facebook friends. Have a Happy Thanksgiving.

      Posted by jimdelbalzo | November 21, 2012, 1:36 pm

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