The founder of Sirius satellite radio doesn't have high hopes for the company she left in 1997, saying that two technologies have since undermined it.
The first, obviously, were iPods and MP3 players, and now Internet radio is threatening to render satellite ratio obsolete. "There has been a huge growth in terrestrial alternatives," Martine Rothblatt said in an interview with Fortune magazine. "As we move from third-generation to fourth-generation cellular, there's going to be ever more bandwidth available to distribute content totally via terrestrial cellular infrastructure. And that will leave fewer and fewer unique market attributes to satellite radio."
In other words, mobile broadband is going to become easier to implement, and Sirius XM will soon have nothing to offer. This isn't a new revelation, but it's got to hurt coming from the person who conceived Sirius in the first place. "Technologies have their ideal times and places, and in my opinion the better time for satellite radio was 10 years ago," Rothblatt (pictured below) said.
The remarks came as part of a larger story on Mel Karmazin, CEO of Sirius XM, and his determination to keep the company afloat. Karmazin is sticking with the idea that celebrities such as Howard Stern and Bob Dylan will entice consumers. "I'm starting at a premise that says radio is not just recorded music - radio is discovery of new music," he said. "Some people would like to be able to hear songs they haven't heard before and that are not on their iPod."
The problem is, Internet radio is also delivering discovery -- that's the point of Pandora, after all -- but without the costly fees that are needed to cover top names and the upkeep of orbital equipment. The latter cost, in particular, is what I think Rothblatt is driving at. Stern and Dylan could just as easily broadcast to an iPhone, and they will once Sirius XM gets its iPhone App off the ground.
Unfortunately, Karmazin can't just drop satellite outright because the technology for listening on the go isn't ubiquitous enough. Until it is, satellite will be stuck carrying the torch.
