Davis ThinkingAsk any teenager the coolest place to listen to music online, and you'll likely be told Pandora. The service has 65 million registered users who tune in for customized streams of, say, artists similar to Lady Gaga or a selection of rockabilly or rap, interrupted by just a handful of ads per hour. Until now, though, Pandora has had trouble reaching people in their cars, where most Americans do the bulk of their radio listening.
The satellite radio company Sirius XM Radio posted its first quarterly profit since its merger and said it expected to add 500,000 new subscribers in 2010 as the recovery in the car market increased demand. The results on Thursday suggest that the company, run by the media industry veteran Mel Karmazin, has solidified. Just a year ago, it flirted with bankruptcy.
A lifeline from Liberty Media pulled his satellite radio company back from the brink. Now the CEO has to prove that the business model can still work.
It’s tempting to blame the downturn for all the bad news hitting tech in 2009, but downturns have a healthy impact too. They burn away the brush of businesses that looked good enough on paper to keep raising money, but never quite worked in reality. Consider two stories in the news today: The possible bankruptcy of Sirius XM Radio in the next 24 hours, and the slumping DVD sales that the so-called “winning” BluRay format is doing little to boost.
Howard Stern mused recently on the air that he was thinking of retiring when his contract expires in two years. “This is my swan song,” he said. Back in the day when Mr. Stern was on free radio and had an audience of 12 million, that remark would have cascaded through the media universe. But by switching to satellite radio three years ago, Mr. Stern swapped cultural cachet for big money.
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