Satellite Radio Industry

There are three major players in the Satellite Radio Industry, and they are XM, Sirius and 1worldspace. XM and Sirius mainly cover mainland United States and Canada, while 1worldspace covers most of Asia, the middle east and eastern and southern part of Africa.

In the United States, the Federal Communication Commission (FCC), in 1997, granted a portion of the S-band spectrum, for satellite radio transmission. Both companies bid for the spectrum and each bought a part of it. XM Radio was the first to start broadcasting in 2001 in United States. Sirius followed a year later and the two services operated independently till July 2008. XM offered around 170 channels and Sirius offered around 130 channels. According to analysts like William Kidd of CE Unterberg Towpin, the Satellite Radio Industry was supposed to generate around $10 a year in revenues by 2007. This prediction was nowhere near the fact, as neither company has been able to earn anything. Both the companies did not do well financially and they were not able to get the number of subscribers that they expected. Analysts still feel that Satellite Radio Industry has the potential to generate huge amounts of revenues, but are unable to tell how soon the industry will pick up. Despite these encouraging predictions Satellite Radio Industry in the United States has not  yet picked up and still has lot of issues to tackle. 

According to Bridge Ratings, 2007 should have seen an increase of 3.9 million net subscribers in the Satellite Radio Industry. The expected subscribers for XM for the year is supposed to have been 9.12 million and for Sirius it was 8.34 million subscribers. The sources of these do not matter, as it seems that there is a lowered expectations of satellite radio subscribers in the United States. The two companies, XM and Sirius have now merged and the organisation is called Sirius XM Satellite Radio. After the merger their total subscribers stand at just over 18 million. Even with this subscriber numbers, we see that the Satellite Radio Industry is not as widespread as the regular radio. Many people still feel that the equipment and the service still cost a lot of money and they are not wanting to spend so much on listening to a radio.

As for 1worldspace the picture is even more dismal. This organisation has its headquarters in Silver Spring and additional studios in Washingto DC, Bangalore, Mumbai, New Delhi and Nairobi. The company has two satellites, which broadcasts 62 channels. This is the only company that has the rights to the world's globally alloted spectrum for digital satellite radio transmission. In 2005 it offered an IPO on NASDAQ and the rate closed on the first day of trading at $22.36 per share. As of October 2008 the price had come down to $0.18 a share. This company is now in financial crisis, and has filed for Chapter 11 bankruptcy protection in October 2008.

The future of Satellite Radio Industry does not look so bright even though experts are still predicting that it will pick up, and pose a threat to the regular radio industry.