Eight years ago, I wrote an article for this blog titled “SiriusXM Radio is Now Free.” At the time I was speculating on what might happen to over-the-air commercial radio if the satellite company were to turn on their ad-supported channels in every vehicle equipped with a SiriusXM radio.
Well, it looks like that is finally coming to pass.
SiriusXM’s Growth Has Stalled
Fred Jacob’s wrote in his blog on Friday that…
SiriusXM, increasingly frustrated by their inability to grow their subscriber base. Looking at the Netflix model, the satcaster earlier this week unveiled their own ad-supported tier for no fee.
Obviously, this is a radical departure from SXM’s legacy subscriber-driven platform. Radio Ink reported that no matter how you look at the in-car battlefield, satellite lags far behind traditional radio listening. SiriusXM, however, performs much better in luxury brand, such as Mercedes-Benz and Audio, as well as in newer vehicles.
Inside Radio says there are other hoops for drivers to jump through. While SXM CEO Jennifer Witz says the new plan is all about “repositioning our business for the future,” the story goes onto say the free service is only available to owners of vehicles with the company’s 360L receivers. Additionally, eligibility is limited to those whose free trials runs out and can only be activated by one vehicle per customer.
But it’s a start. While the company acknowledges it will take time to amp up the platform’s commercial options for advertisers, you can see that’s where they’re headed. SiriusXM needs to jumpstart its user base, while cashing in on inventory sales.
Will it work? Can a radical move to offer a “free” version of satellite radio actually be a game-changer for SXM.
We can all speculate about the wisdom of this risky move by SiriusXM, but like the growth of [other ad-upported] channels, it attempts to cash in on the notion of not paying cash for any media content.
Pay & Free
It doesn’t take a whole lot of imagination to understand why satellite radio is deciding to have the best of both worlds. Offer the premium pay channels to those willing to pay for them and at the same time create a free tier of channels that could be ad supported by national advertisers.
What history shows us are things that happen in other industries and services – eventually making their way around to virtually all of them.
NOW – It’s only a matter of time.
Link to my 2016 blog article: https://dicktaylorblog.com/2016/07/17/siriusxm-radio-is-now-free/
DickTaylorBlog 
Dick, thanks for referencing my blog from this past week about SXM’s pivot. I’ll be interested to see what your readers think. As you note, this is a fascinating effort to have one’s cake and eat it, too. Two tiers are likely better than one.
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I think that Netflix has already discovered that two tiers are better than one.
I think the reason that SiriusXM didn’t do this sooner, was because they didn’t have the addressable technology – it was either turn everything on or turn everything off, like in my cars – but now they do with these new radios.
While I was already thinking about writing again about this, your blog pushed me over the edge.
Thank You for the incredible articles you write on a daily basis. I’m in awe.
-DT
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Sorry, but I’m willing to pay for keeping commercials off my feed! As an early supporter of Sirius (I almost left WABC to work for them when they first started and became a subscriber when I got to know what the product was) being able to find the exact music I wanted and not have to listen to commercial sets (which had gotten longer and populated with more annoying messages) was a wonderful break from what I did for a living. Having been in the radio business since the early 70s, I missed the days when the commercials were clever, well produced adjuncts to the programming. Let me tell you a little story…one night during my time at WHN after we went country, I was supposed to cart up a couple of Country Coke commercials from a 7 inch reel. That very full 7 inch reel of tape contained Coke commercials from EVERY radio format of the day, with not only the Coke jingle done in the style of the format, but sung by artists of the format and with voice overs done by the best DJs of the format! Although I had to cart just three 60 second spots, I sat there and listened to the entire reel! Now those were the days when the commercials were worth listening to!
Todays’s radio has little or no creativity in commercial content or production. Remember when stations had Copywriters who crafted spots for air on their station? Today the salesman writes the copy, and that’s why we get what we get! Over my 40 years at WABC and WPLJ, I worked with some of the best production people in radio, and even on a local basis, people like Johnny Donovan crafted spots that were informative while still being a creative well produced adjunct to the programming. That’s no longer the case in many places!
I don’t know how their add supported stations will vary from their paid channels or for that matter from terrestrial radio, but I’m not canceling my subscription just yet….Frank
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We too have been spoiled by commercial-free media.
We pay extra to Netflix and Prime to have commercial free viewing. Likewise, we have subscriptions to RadioTunes and Pandora that provides commercial free music entertainment. They stream seamlessly in both of our cars through their premium sound systems with crystal clear audio and no buffering via our iPhone15’s.
Once you’ve enjoy commercial free programming, its hard to go back.
Thanks for weighing in with your perspective, Frank.
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We have two cars and use Sirrus/XM often when on the road. We use only the symphony, jazz, Willie’s Road House and Outlaw Country. I would hate to see them go commercial as we pay a pretty good annual fee for the services. And, that is this that a change is only good for one car per owner? Sorry they are struggling, but…
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I don’t think you have any worries Robert. From everything I’ve read, the ad supported music channels will be new ones, and none of the current commercial free channels will be affected.
The goal is to add new listeners, not lose current paid subscribers.
Thanks for stopping by the blog and sharing your thoughts.
-DT
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Having been one of the few law students that wrote about SDARS and the regulatory and public interest schema for SDARS 25+ years ago, it will be interesting the see what, if any, impactthat a free tier of service will have on SXM. Sirius and XM chose to be subscription services at launch primary to remove themselves from the broadcast service obligations (including profanity/obscenity), such as they were Post-Reagan and ’96 Act. Being a subscription service allowed them to be treated like the old analog TV subscription services.
No doubt calling it a “free subscription tier” and limiting the receivers capable of acccessing the free tier indicates that SXM is conscious of the issue.
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Steve, that’s interesting background information about SiriusXM. I had completely forgotten about this aspect until you reminded me with this post.
Thank you for stopping by the blog and adding this piece to the puzzle.
-DT
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