There’s been a lot of talk this week about the role of the iPod and portable media with respect to the proposed merger of XM and Sirius Satellite Radio. Much of the talk has focused on the role of portable media players (particularly iPods) as a catalyst for change. We agree with this analysis and so do the satellite players involved in this proposed deal. But the major media is only reporting part of the story.
The shift that is driving the necessity for XM and Sirius to merge isn’t just about a particular device. It isn’t just about the programming either, because satellite radio offers a much wider variety of programming than traditional radio. And the battle that the satellite radio players is not against iTunes or other music services even though these are the reasons stated and widely reported.
The two major issues in this situation are cost and lifestyle. XM and Sirius have spent huge amounts of money to get their businesses rolling. Satellites cost hundreds of millions of dollars. And they’ve each paid hundreds of millions of dollars to retain top programming. So in order to make a profit these companies need to reach a critical mass of media consumers. And in order to do that they need to cater to people who increasing lead a portable digital lifestyle.
The rise of the portable digital lifestyle has occurred in parallel with the rise of podcasting. This new lifestyle is driven by technologies that enable high speed internet, incredibly small data storage devices and agile media players including portable media players and cell phones. As a result people are getting use to consuming media when they want, where they want and how they want. People like it this way. That’s why they buy iPods or Samsung Blackjacks or an Archos video player.
The combination of high connectivity, abundant storage, portability and alternative content (due to podcasts and independent music) has made the vision of untethered media consumption a reality. People get to build their own channels for information, education and entertainment. They get to capture their media and then throw away the cord until they want to get some more. Fighting this trend is like fighting sunset or the tide.
Smart companies are helping people to untether. Within two years 40% of vehicles in the U.S. will have a line in jack for connecting portable audio players. In 2007 major U.S. airlines will provide in seat charging and viewing for iPods. The iPhone is coming. More innovations will follow. Are media companies ready to meet the challenge?
Here’s the bottom line. Tethered media (like TV, Radio, Satellite Radio, Web Streaming, etc.) will always have a place in people’s lives. But that place is diminishing as people all over the world experience the freedom of untethered consumption. Companies who fight this trend will suffer the consequences. Companies who embrace the trend and enable consumers have a chance to control their own destiny.
RawVoice is here to help companies that want to learn about the trends and take control of their own destiny. As in any nascent movement affected companies needn’t abandon their current models at the drop of a hat. But those who start planning now can be ready to take advantage of the shifts occurring in the media consumption habits of individuals.