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Speaker 1: tech stuff from how stuff works dot com. Hey there,
Speaker 1: welcome to the podcast. My name is Chris Poette. I'm
Speaker 1: an editor here at how Stuff Works, and today I
Speaker 1: have with me Jonathan Strickland, a writer. Hey there, it's
Speaker 1: my radio voice. All right, Speaking of radio, we're today
Speaker 1: we're going to discuss a topic that's near and dear
Speaker 1: to my heart, which is satellite radio. And I should
Speaker 1: confess that it's near and dear to my heart for
Speaker 1: a couple of reasons. One, I've been a satellite radio
Speaker 1: subscriber since two thousand and two. I am also, I'm
Speaker 1: honestly on the on you know, sake of clarity, I
Speaker 1: am a stockholder of what is now Serious XM Radio
Speaker 1: since the two of them merged not too long ago.
Speaker 1: Um So, of course, feel free to throw things at
Speaker 1: me if I get too excited. I always do, all right. So,
Speaker 1: satellite radio, you might say that's of an odd idea. Well, yeah,
Speaker 1: you know, this is not Marconi's idea of radio, you know,
Speaker 1: which was essentially that the frequencies are traveling through the
Speaker 1: air and you pick them up once they've been broadcasting
Speaker 1: those signals. AM you know carries aways and FM carries aways,
Speaker 1: and they both have their advantages and disadvantages. But satellite
Speaker 1: radio UM has bounced off of satellites that are in
Speaker 1: orbit around the Earth, and UH, the UM enhancement here
Speaker 1: is it's gotten more bandwidth than the average FM signal,
Speaker 1: So you're getting more information in the signal, you're probably
Speaker 1: getting better quality sound, and UH it also allows you
Speaker 1: to listen to channels on the go. You can basically,
Speaker 1: if you're in the United States or Canada, you're able
Speaker 1: to subscribe to satellite radio and you could drive from
Speaker 1: one end of the country to the other without losing
Speaker 1: the signal that you're listening to. Right, You wouldn't have
Speaker 1: to sit there and keep fiddling with your radio and
Speaker 1: try and find that one station that's not playing country
Speaker 1: exactly right. UM. So it's uh, it's pretty nifty for
Speaker 1: for music aficionados, especially UH speaking again and you know
Speaker 1: from my own personal experience, because both what have been
Speaker 1: operating as individual companies, Serious Satellite Radio and XM Satellite
Speaker 1: Radio UH in the United States and Canada. Both of
Speaker 1: them offer dozens of music channels. Um. They also offer
Speaker 1: a variety of other programming news, sports radio, talk radio,
Speaker 1: public radio, UH, special interest radio, traffic and weather. You know,
Speaker 1: so the people who subscribe to satellite radio are the
Speaker 1: kind of people who want a university of programming and
Speaker 1: they wanted on no matter where they go. It's primarily
Speaker 1: used by people in cars and trucks, although you know,
Speaker 1: some of us bring ours in and listen to it
Speaker 1: at our desk while we're working. Um So, it's that's essentially,
Speaker 1: in a nutshell, what satellite radio is, right and and
Speaker 1: before the merger, when you could talk about XM and
Speaker 1: Sirious as two separate companies, you could really talk about
Speaker 1: the differences between them. Now those differences still exist even
Speaker 1: though it's one company. You have two different systems that
Speaker 1: you're working with. And we should give you a little
Speaker 1: quick rundown on that. And now XM Radio has a
Speaker 1: four satellites that travel in a geo stationary orbit. That
Speaker 1: means they stay in a fixed position above the Earth.
Speaker 1: Um So, as the Earth turns, these stay exactly where
Speaker 1: they are. And it's supposed to give you that coverage
Speaker 1: that Chris was talking about nationwide thank you, Arthur C. Clark, Yes,
Speaker 1: thank you very much. So those are Those are named
Speaker 1: rock Roll, Rhythm and Blues, which is much cooler sounding
Speaker 1: than x M one, x M two, x M three.
Speaker 1: They're also named that. But anyway, moving on now serious.
Speaker 1: They also have four satellites. One of them is GEO stationary,
Speaker 1: the other three are not, which means they actually kind
Speaker 1: of drift over the United States in a certain pattern,
Speaker 1: and now the coverage is still there. It's just that
Speaker 1: it's uh as as one satellite is moving away from
Speaker 1: covering North America, another satellite is coming directly over North America,
Speaker 1: so you're there. Theoretically you don't lose any coverage that way. UM.
Speaker 1: So those are the Those are the differences just from
Speaker 1: satellite point of view. But they also use different proprietary coding,
Speaker 1: so if you have a serious radio, you can't pick
Speaker 1: up and decode x M signals and vice versa. Not yet,
Speaker 1: not yet. Um, you were theoretically supposed to at some point,
Speaker 1: but that never happened, although it's supposed to happen now
Speaker 1: that they are one company. Yeah, the merger was a
Speaker 1: very very long process in coming. It had to overcome
Speaker 1: a number of objections. Uh. You know, there are major
Speaker 1: lobbying groups like the National S Station of Broadcasters who
Speaker 1: were against it. Uh. They argued and and you might,
Speaker 1: as the listener, argue that hey, you know, there were
Speaker 1: two companies now there are only one. Yeah. In fact,
Speaker 1: the FEC, as part of the condition of giving them
Speaker 1: licenses to operate these services, uh, expressly said, you know,
Speaker 1: you may not merge, but you know, market conditions, it's
Speaker 1: not cheap to launch a satellite um and maintain it
Speaker 1: and maintain the you know, the number of people it
Speaker 1: takes and do all the advertising to get people to
Speaker 1: sign up. So both of these companies have been operating
Speaker 1: in a loss for for quite some time. I mean,
Speaker 1: they're making some money, but it takes a lot of
Speaker 1: money to to get more subscribers. So you know, that
Speaker 1: was a lot of the reason behind why they were
Speaker 1: trying to merge. And eventually they overcame the objections of
Speaker 1: of the lobbyists and the well they didn't overcome those,
Speaker 1: but the government agency agencies like the Department of Justice,
Speaker 1: the SEC, the FCC finally came together and decided, well
Speaker 1: it's it's okay. It was sort of grudging. They had
Speaker 1: to give up a lot, uh, twenty million dollars v
Speaker 1: they had to freeze rates for three years. You know,
Speaker 1: a lot of things that they had to do. Was
Speaker 1: very difficult for them to do it. But they finally
Speaker 1: merge and it wasn't it wasn't a blowout by any means. Uh.
Speaker 1: The FCC came to a decision. It was a three
Speaker 1: two decision, so three four two against and um and
Speaker 1: I mean you might be shocked to hear this, but
Speaker 1: it went straight down party lines, three Republicans voting for
Speaker 1: the merge and two Democrats saying please know so um yeah,
Speaker 1: I mean it's it's one of those things that people
Speaker 1: still feel a little unsure about. For one thing, there's
Speaker 1: the concern that since there's only one satellite radio company
Speaker 1: really in the United States at this point, it's a monopoly. Now.
Speaker 1: The the counterpoint to that argument is to say that, no,
Speaker 1: of course, not satellite radio is is competing with many
Speaker 1: other industries now, they're they're not other satellite radio companies,
Speaker 1: not in the United States and Canada, right right exactly,
Speaker 1: I'm just on the US and North America here. So, um, so,
Speaker 1: what you're talking about here is is competing with things
Speaker 1: like just traditional radio, so traditional radio versus satellite radio,
Speaker 1: or even things like personal music devices like iPods or
Speaker 1: other m P three players um or even the iPhone.
Speaker 1: One of the most popular new applications on the three
Speaker 1: G I phone is Pandora, which is a streaming radio
Speaker 1: h web application, and you can get music on that
Speaker 1: and it it'll just start pulling music and playing it
Speaker 1: through your your iPhone. So so the FCC said, all right,
Speaker 1: you know, that does sound like that's enough basis for competition.
Speaker 1: So this really isn't a monopoly. That's how they kind
Speaker 1: of got through that. It's funny that that you would
Speaker 1: talk about those objections because also in the interest of disclosure,
Speaker 1: when I signed up for satellite radio, I was working
Speaker 1: for one of the major UH, the two satellite television
Speaker 1: providers in the United States, and at that time, in
Speaker 1: two thousand and one, two thousand two, they were looking
Speaker 1: at the possibility of merging Direct TV and Dish Network,
Speaker 1: And an article in the Wall Street Journal just the
Speaker 1: other day, since Serious and XM were allowed to merge,
Speaker 1: UH said that they that Dish Network is actually considering
Speaker 1: the possibility of another merger attempt. Now they were denied
Speaker 1: the opportunity to do that because the people who are
Speaker 1: against it, I believe, if I'm not mistaken, this is
Speaker 1: off the top of my head, the NAB opposed that too. Um.
Speaker 1: But but that's a little bit different situation. Unlike radio
Speaker 1: and iPods and all the other things that you can
Speaker 1: do with with audio signals. Um. People in rural areas,
Speaker 1: say the mountains of West Virginia, you can't just lay
Speaker 1: more television. Cable is very very difficult to that. So
Speaker 1: the only competition satellite TV has in those areas is
Speaker 1: regular broadcast TV, so you might be limited to a
Speaker 1: very few stations versus you know, the depth and breadth
Speaker 1: of satellite TV programming, which is why they were unable
Speaker 1: to merge before. I was the big uh contingent you know,
Speaker 1: who was against it, saying it was an monopoly there.
Speaker 1: That's why they were successfully able to argue that. But
Speaker 1: there's a lot more that satellite radio competes with than
Speaker 1: than just those options. So that I think that's probably
Speaker 1: what was maybe the deciding factor, at least it would
Speaker 1: have been for me, right, But it might set a precedent.
Speaker 1: We'll have to just wait and see and see if
Speaker 1: if that lays the groundwork for satellite television mergers down
Speaker 1: the line. UM. Just to get back to the the
Speaker 1: discussion about the cars, something interesting I read was that
Speaker 1: some car manufacturers might not be so thrilled about the
Speaker 1: the merger of x M and Serious because a lot
Speaker 1: of cars are now including satellite radio UM as one
Speaker 1: of the options you can have and UH and different
Speaker 1: car dealers our car models. Car manufacturers have made deals
Speaker 1: with either XM or Serious, so it was one way
Speaker 1: to differentiate the model from other cars. And now that
Speaker 1: method of differentiation is gone because they're the same company.
Speaker 1: That's interesting. I never really thought that that that that
Speaker 1: would be a bad thing. I thought it would be
Speaker 1: a good thing because it makes it much easier you
Speaker 1: have a you know, you've consolidated your choices. You don't
Speaker 1: have to make that choice, right. But it turns out
Speaker 1: that that's not as simple as I thought. Yeah, it's Uh.
Speaker 1: It's funny because it's also both services are offered with
Speaker 1: satellite TV now they eat. If you're a Direct TV subscriber,
Speaker 1: you get XM channels as your music. If you're a
Speaker 1: Dish network subscriber, you get Serious music channels included with
Speaker 1: your TV, So I wonder, you know, I haven't seen
Speaker 1: anything about that, but I wonder if that's going to
Speaker 1: be an issue for them there. They have lot of
Speaker 1: agreements that they have in place that they're going to
Speaker 1: have to to work out. And that's why, Uh, you're
Speaker 1: not going to see a dramatic shifts suddenly in the
Speaker 1: number of channels if you are a subscriber or the
Speaker 1: kind of channels, because they're they're they've got a lot
Speaker 1: of issues yet to work out having a chip set
Speaker 1: that picks up signals from both kinds of of those satellites,
Speaker 1: so you know, it's it's gonna be a while before
Speaker 1: they really get the kinks worked out. Actually that that
Speaker 1: leads me. I don't mean to put you on the
Speaker 1: spot here, but I'm just curious what you think the
Speaker 1: the viability of satellite radio is. I mean, seriously, they're
Speaker 1: talking about a subscription based service, so people are paying
Speaker 1: for this, um when they can get things like Pandora
Speaker 1: Internet radio, Uh, when they can get things like a
Speaker 1: traditional radio. UM. Do you think that satellite radio really
Speaker 1: is does have a future after this merger? Yes and no,
Speaker 1: I think the idea is viable. I think it's it's
Speaker 1: sort of like DVR technology, where it's got a mass,
Speaker 1: but it doesn't seem to have reached critical mass. UM.
Speaker 1: I think that they have both well serious XM radio.
Speaker 1: The new company has an awful lot of debt to
Speaker 1: work off, UM, and I honestly think that if the
Speaker 1: merger had not gone through that they would have had
Speaker 1: a very difficult time surviving. I don't think both of them,
Speaker 1: maybe not either of them would have survived that now, UM,
Speaker 1: you know, with the semi monopoly conditions that also opens
Speaker 1: the field. I think it would be very easy, if
Speaker 1: you had the wherewithal to do it, uh, to launch
Speaker 1: another satellite radio service to compete with Sirius xm UM.
Speaker 1: You know, because then you could say, well, hey, you
Speaker 1: know there's a monopoly out here. I want to compete
Speaker 1: with them. You know. I think it would be much
Speaker 1: easier for a new player to get in the market
Speaker 1: and compete with it. And I think, you know, there's
Speaker 1: only so much iPod that you can take before I go,
Speaker 1: you know what, I just want somebody else to spend
Speaker 1: something new that I haven't heard before, right, And I
Speaker 1: do remember were reading something about them being locked into
Speaker 1: UH they couldn't go over a certain subscription sheet for
Speaker 1: a couple of years after the merger, which, as you
Speaker 1: point out, that means that if someone else were to
Speaker 1: come in they could they could take advantage of that.
Speaker 1: I mean, if if that amount of money isn't enough
Speaker 1: to keep the company afloat, then then they may it
Speaker 1: may have just prolonged the inevitable. Well, I guess that
Speaker 1: about wraps up this podcast. Do you would like to
Speaker 1: learn more? Please read how satellite radio works on how
Speaker 1: stuff works dot com and we'll talk to you again soon.
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