Would you pay $10/month for a digital car radio subscription?

I Find Karma (adam@cs.caltech.edu)
Sun, 13 Dec 1998 03:12:14 -0800 (PST)

The business model of the company CD Radio (Nasdaq: CDRD) intrigues me.
These people think we will be willing to pay $10/month for a nationwide
radio subscription service for our *cars* (that's right, you can only
pick it up in your car, not your home).

The more I think about it, there are several advantages:
1. No commercials.
2. Digital-quality audio. No more hissing and static (unless you're
listening to Marilyn Manson).
3. No driving out of radio range.
4. Extremely niched programming, e.g. The All-Reggae Channel.
5. One hundred channels; no more fiddling with the presets.
6. A digital display tells you what song you're listening to.
No more humming a tune all day without knowing what it is!

And compared to the $60/month I spend on cable, $10/month sounds
downright cheap. I wonder if radio can have decent premium channels
like HBO and Cinemax...

The reason I'm posting this now, by the way, is that we're almost
exactly halfway between when the FCC granted the satellite licenses, and
when CD Radio expects the system to be deployed. I'm ready to sign
up... man, I love these satellite companies...


> In October of 1997, the Federal Communications Commission granted CD
> Radio one of two national satellite radio broadcast licenses. The
> Company is building a satellite-to-car 100 channel radio system for the
> broadcast of music and other programming to motorists throughout the
> United States.
> The Company intends to broadcast 50 channels of commercial-free, compact
> disc quality music programming and 50 additional channels of all-news,
> all-sports and all-talk programming.
> The Company plans to broadcast its service, to be called CD Radio, via
> its own custom designed and built satellite system which is currently
> under construction at Loral. Satellite launch is scheduled beginning the
> fourth quarter of 1999. Three satellites will be launched, with a fourth
> to be held on the ground as a spare.
> The Company expects that existing car radios will be able to receive AM,
> FM, and CD Radio upon a consumer's sliding a "radio card" into a radio's
> cassette or compact disc slot. When tuned to CD Radio, a digital display
> at the end of the radio card would indicate the channel, format, title
> and artist currently selected.
> A battery powered satellite dish the size of a silver dollar, attached
> to a car's rear window with an adhesive backing, would relay CD Radio to
> the radio card wirelessly. Both card and dish would be installed
> directly by consumers in a matter of seconds.
> The Company will offer targeted programming formats, omnipresent signal
> coverage, freedom from advertising, and CD quality fidelity. It is
> anticipated that upon commencement of CD Radio the monthly subscription
> fee for receipt of all CD Radio channels will be $9.95.
> The Company will offer a broader selection of more finely focused
> formats than is available from broadcasters. In most markets, the
> economics of conventional radio force broadcasters to target their
> programming to broad audiences, and even in the largest metropolitan
> markets, station formats are limited.
> The Company will offer commercial-free programming, while most
> conventional radio stations contain significant amounts of commercial
> interruptions during each hour of programming.
> The Company will offer near omnipresent signal coverage throughout the
> continental United States. Conventional radio signal availability, in
> contrast, is generally limited to distances of approximately 30 miles
> before fading and loss occur.
> The Company will offer digital quality stereo audio. AM/FM stations do
> not offer this today, and only FM stations are expected to be able to
> offer comparable audio quality in the future.
> With respect to recorded music (tapes and CDs), Arbitron reports that
> 87% of commuters spend their drivetime listening to radio. Accordingly,
> the Company does not view its service as directly competitive with these
> media.
> The Company's primary market is expected to be operators of
> approximately 200 million cars and trucks throughout the continental
> United States. The Company knows of no existing terrestrial transmission
> system that can offer CD Radio to cars. Furthermore, no existing
> satellite system is capable of offering this type of service.
> As with cable, twenty years ago, which brought additional value and
> convenience to television, today satellites are able to bring additional
> value and convenience to radio. The Company believes that satellites are
> to radio what cable was to television.


It's a hard knock life for us, it's a hard knock life for us.
'Stead of treated, we get tricked. 'Stead of kisses, we get kicked.
It's a hard knock life.
-- Jay-Z, "Volume 2: Hard Knock Life," sampling from the musical "Annie"