Alan Levy Goes Head to Head with Newly Merged Sirius XM

BlogTalkRadio Founder & CEO Alan Levy

BlogTalkRadio Founder & CEO Alan Levy

So today’s article in the New York Post headlined “Downed Satellite” includes a one-line quote from me:

“‘I don’t think making people pay subscriber fees for content is sustainable,’ said BlogTalkRadio CEO Alan Levy.”

The quote elicited a somewhat harsh response from the newly-merged Sirius XM satellite radio network. Chief Financial Officer David Frear tried to dismiss my comment by asking:

“We generated $2.3 billion in revenue for the trailing 12 months, how much did BlogTalkRadio generate? Do they have a viable business plan?”

Before I respond to David’s question regarding the viability of our business plan, let me elaborate on why I think Sirius XM is in for hard times. Here’s a list of obstacles I see hindering satellite radio’s growth:

• The cost of content is way too high. Howard Stern, the $500 million man, is reported to have only 1.2 million listeners to his show a week. And those are not unique listeners. Howard has far and away the largest audience on Sirius. (Take a look at the numbers reported just nine months ago in The Daily News.) Notwithstanding the huge contracts awarded to Rush Limbaugh and Sean Hannity, I believe the days of big radio contracts are over.

• Cars are being equipped with devices that can accommodate Internet surfing. Why subscribe to Sirius XM when passengers can access their Last.fm, Yahoo or Pandora playlists? There are endless choices for streaming music, all far more appealing than the choices offered by satellite radio.

• Cars are also being equipped with iPod jacks and other MP3 accessories.

• When cars can accommodate the Web, why should someone pay a subscription fee for CNN or Fox News when content can be streamed directly off those websites for free?

• There’s a limit to the number of channels – and, thus, content – that can be distributed on the Sirius XM network. In July, more than 4,000 hosts produced tens of thousands of hours of programming on BlogTalkRadio. How many hours of programming did Sirius and XM offer?

• While I haven’t scoured Sirius and XM’s annual reports to determine the cost of maintaining a satellite network, there’s no doubt that a low-cost, Internet-based model for creating and distributing content is far more appealing to investors.

• We live in an on-demand TiVo world. To date, BlogTalkRadio has produced more than 110,000 discrete shows, all of which are accessible via our network. Audiences want to consume content when they want it and not when it’s scheduled. Does Sirius XM make all its content available in archives?

Of course, what do I know? As Sirius XM’s CFO asks, “Do they have a viable business model”?

Let’s see…

• Unlike satellite or traditional terrestrial radio, our costs to produce, distribute and store content is negligible.

• We have more than three million listeners per month to shows whose topics range from politics to entertainment to sports to parenting to paranormal. Our hosts produce more than 500 live shows a day, and there is no limit on the number of shows or hosts the BlogTalkRadio radio network can accommodate.

• We aggregate programming by topic, thereby offering a far more targeted audience to our customers.

• Lastly, we license privately-branded radio networks to major companies and organizations, including the Department of Defense, Sun Microsystems, HarperCollins and Golf Magazine.

It’s an interesting debate, and one I’m looking forward to engaging in as it develops.

Alan

18 thoughts on “Alan Levy Goes Head to Head with Newly Merged Sirius XM

  1. Jay Are

    Looks like you won that debate hands down, Alan. Good for you. Satellite radio is almost impossible to get up on as well, if you are not a big name or have big backing it isn’t going to happen. Conversely Blog Talk Radio gives anyone with a voice the opportunity to be heard via a phone…FREE. Somtimes it pays off handsomely as well, but even if it doesn’t what did you lose…NADA. Getting on satellite is costly even for the overnight spots.

    Thanks for providing a place where passionate people can air their views and be heard for anyone who cares to do so.

    Jay

    Reply
  2. Esau Kessler

    I subscribed to Sirius for a year. I was doing a lot of commuting. When it came time to renew I declined. It was just too expensive. They will always have a niche, but prices will have to get considerably lower to produce growth. I agree with your assessment of where radio is going. BTR is on my toplist of new technologies. It appears Wall Street agrees. Sirius would be wise to contract with Blog Talk Radio and carry some it’s programs.

    Reply
  3. LifeRemxedRadio.com

    BlogTalkRadio.com has changed the total direction of my career!!!

    My show airs weekday’s @ 12noon EST and I have an amazing team in place to help push our show to the top!!!

    Thank you Mr. Levy.

    Reply
  4. Lesa Trapp

    Alan Levy rocks. He is telling it like it is. My show is getting downloaded all the time. My listens have grown to over 10,000 just in 3 1/2 months. We are now doing a magazine to list the guest on the show. Blog Talk Radio is easy and fun. It allows the listener to also get invovled and their voice and opinion to be heard. Keep going Alan we are right behind you.

    Thank you for giving the little guy/gal a voice.
    Lesa Trapp aka Angellesa

    Reply
  5. Just A Grunt

    You are comparing apples and oranges here. Satellite radio does fill a niche. I have had an XM Radio for a couple of years and absolutely love it. I have a couple of reasons not cited here.
    1) I can listen to it at work where streaming media is blocked on the work computers and regular radio reception is not possible.
    2) The vast array of channels allows me to listen to what I want depending on what mood I may be in.
    3) I do have a version of an XM receiver that allows me to save music or shows just like an MP3 player
    BTR fills a different need or pleasure if you will. I do host a show on BTR as well as listen to many others, but for me it is the live interaction along with the streaming broadcast that appeals to me.
    I also like the more personal nature of the shows especially when they have a prominent or big name person on. The chance to get to interact with the likes of John Bolton or congressmen in a more personal setting is outstanding.
    For me it isn’t an either / or proposition but rather a chance to stay connected and entertained on my terms and depending on my preferences.
    The two different businesses do not need to be in conflict, and both will have different business models just based on the nature of their businesses. Both could probably benefit from looking at the way each other does business and try to incorporate things that may work for them.

    Reply
  6. Alan Levy

    Just A Grunt,

    I fully agree with your assessment. I am a Sirius and XM customer and i have been for years. I think the content is great, I just question the long term viability of their business model.

    Alan

    Reply
  7. Pingback: BrandBrains » Blog Archive » links for 2008-07-31

  8. Shaun

    The shows on BTR are as good if not better than what is on XM/Sirius..

    Alan is a genius and each Sunday in my prayers I always include him and BlogTalkRadio in them..

    As the economy tetters, people are cutting costs and why spend money for content on XM/Sirius when you can get equal or better content on BlogTalkRadio for free??

    To me its a no brainer..I know many here in Vegas that have dropped their subscriptions as satellite is becoming more and more just audio platforms for CNN, Fox and MSNBC and their programs or platforms for Limbaugh, OReilly etc..

    Original programming is where BTR cleans everyones clocks..

    Reply
  9. Gary J. Harris

    As BTR host of “The Harness The Power Hour” I could’nt agree with you more Alan. BTR has filled a need in a powerful way by making it free to host, and free to listen, “worldwide”. Thousands of hosts producing original content that you would otherwise never have gotten to hear via XM. While XM has it’s benefits, though they do seem temporary as stated by Alan. There is no question in my mind about the future of BTR.

    Reply
  10. Jacob Gold

    Alan, you are on the cutting edge of the communication industry. Sattelite radio–great idea, wrong century. We are so far past it, and you have the vision to bring us toward the next generation of this great industry.
    Thank you for all you do.

    Jake Gold

    Reply
  11. Todd Farino

    Alan,
    Wa to hand it to them. I invested in Sirus radio and got out along time ago. The competition in the market exceeds even what they think it is. The bottom-line is if its free, people use it.

    Good debate and great job. I love Blogtalkradio.com. I have 4 shows!

    Todd Farino

    Reply
  12. Tim Burns

    You know what I like about BTR? EVERYTHING! I was living in LA less than 5 years ago and went in to pitch a show to KLSX. After “taking my meeting” the sales guy tells me he can put me on the air for 13 weeks…..FOR $50,000.00!!!!! Fifty grand for less than 50 hours of “blocked programming” i.e. one big fat commercial that I would have to pay for myself. Needless to say I’m grateful I didn’t have the 50 grand to waste because here we are less than 5 years later with BTR. I can’t wait to see how BTR develops in five years.

    Reply
  13. Pingback: BlogTalkRadio Says Good Bye to the Summer with Highlights of the Season « The BlogTalkRadio Blog

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