Imagine the Possibilities - Satellite Radio in Australia ????
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- Satellite Radio in Australia ????
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COUNTRY, ROCK, Pop, R&B, Classical,
Local/National/International News, Sport, Weather,
Traffic - imagine being able to create your own radio
station - listening to the types of music and information
you want - and being able to hear it anywhere
- wherever you are without changing stations or
frequencies. You can - but just not here in Australia!
Satellite radio is such a remarkably simple concept
that it's a wonder why it took until 2001 for the first
space based audio service to make its debut in the
United States. Or at least the concept of satellite radio
appears simple on the surface: Take music, news or
talk, beam the signal up to a satellite, and overcome
the limitations of ground based transmitters whose
signals generally drop off as distance increases. Then
make sure the programming is more appealing than
traditional radio stations and cut down on the number
of commercials in exchange for a monthly subscription
fee. As it turns out though, satellite radio is a whole
lot more complex than it seems on paper and it took
cutting edge technology and a significant investment to
make the systems operate.
The main satellite radio providers are WorldSpace
in Europe, Asia and Africa, and XM Radio and Sirius
in North America. All systems are proprietary and
broadcast non compatible signals, requiring proprietary
hardware for decoding and playback.
Satellite radio uses the 2.3GHz S band in North
America, and generally shares the 1.4GHz L band with
local Digital Audio Broadcast (DAB) stations elsewhere.
It is a type of direct broadcast satellite, and is strong
enough that it requires no satellite dish to receive.
Curvature of the Earth does limit the reach of the signal,
however due to the high orbit of the satellites, two or
three are usually sufficient to provide coverage for an
entire continent.
Local repeaters similar to broadcast translator
boosters enable signals to be available even if the
view of the satellite is blocked, for example, by large
buildings in cities and built up areas. Major tunnels in
the US have even been fitted with repeaters in an effort
to ensure uninterrupted broadcasting to customers. This
method allows local programming to be transmitted in
most major metropolitan areas.
Sirius & XM rely on strategic relationships with car
manufacturers to propel sales. These relationships
ensure that cars come equipped with factory or dealer
installed satellite radio receivers either standard or
as an option. The idea is that the cost of a satellite
receiver can be rolled into a vehicles' price just like
other options.
Satellite Radio is now big business in the United
States. Oprah Winfrey has become the latest high
profile celebrity to join a satellite radio station in the
US, after signing a US$55m three year deal with
XM Satellite Radio. This move is an indicator of the
intensity of the rivalry between Sirius and XM, with XM
also recently signing an 11 year, US$650m deal to
broadcast Major League Baseball.
Subscriber numbers continue to climb, but with rises in
revenue and subscriber numbers, so do the losses. Sirius
Satellite Radio reported recently that its losses widened
to US$311.4 million in the final quarter of 2005 as
a result of higher costs for acquiring subscribers. Both
Sirius and XM are spending heavily to expand their
emerging businesses, and charge around US$13 a
month for dozens of channels of commercial free music,
as well as talk, news and sports.
WHY SATELLITE?
Satellite allows what traditional terrestrial radio cannot
- reach. In Australia, a satellite radio broadcast via one
satellite could reach the entire country broadcasting to
a truly national audience, and allow a satellite radio
operator to recognise the benefits of this type and level
of coverage. Satellite also allows for greater number
of channels and content offerings. Dozens of channels
would now be possible and allow a direct source of
revenue from charging a subscription fee for access to
channel bouquets.
Satellite radio broadcasting also provides a robust
infrastructure that is relatively immune from the effects of
cyclones, floods and bush fires that afflict areas. This
has been particularly important overseas for providing
disaster warning and relief services, as has been
shown for the recent Asian tsunami. Melbourne based
company Asia Space provided emergency radio
services to support the Indian Disaster Management
and Mitigation relief operations at Chennai to provide
guidance, health and sanitation, stress management
counselling to those in distress at the coastal centres.
Later similar relief services, including the above as well
as news and children's programmes in local languages,
were also delivered to the Aceh disaster area.
Overseas experience with satellite radio has shown
that the key drivers to support take up are:
1. competive service providers
2. affordable receivers
3. new and innovative content with more choice
4. new data and multimedia services
5. extensive coverage
6. appropriate regulatory framework
The successful business model for satellite digital radio
in the USA has been based on a subscription service,
rather than the traditional free-to-air business model used
for terrestrial radio.
The rapid take up by satellite radio subscribers in USA
indicates that there is a mass market for a service that
provides more choice, high quality audio, and wide
area coverage. The predictions are that there will be
more than 20 million satellite radio subscribers in the
USA by the end of 2010.
Whilst Australia is seeing limited forms of satellite
radio, such as Austar's Interactive Radio Service (34
digital radio channels available on Austar's digital
television platform), and Commercial ventures such as
Satellite Music Australia (offering 30 channels of ad free
music for the hospitality and retail industry), there are no
'mobile' operators offering choice of content in the car,
or on the bus in similar style to the US' Sirius & XM.
In Australia, lobbying for appropriate licensing and
the allocation of spectrum has been occurring by satellite
operators and potential mass market satellite radio
providers for the last couple of years - ACMA is yet
to publicly comment on its policy towards satellite radio
services.
Terrestrial radio broadcasters are opposed to any
allowance for mass market satellite radio broadcasting
in Australia - as it is perceived that this would have a
negative impact on the commercial radio industry, which
is currently transitioning to digital and focussed on its
own commercial and consumer shift to ensure a smooth
transition.
In the immediate future, the industry should consider
opportunities to provide satellite radio services in
support of disaster operations and the dissemination of
information to remote communities.
A mass market satellite radio industry may be some
time off yet here in Australia, until at least the refinement
of successful business models based on overseas
experiences as well as some regulatory consideration
and concessions by ACMA for this type of broadcasting
to occur.
* Anthony Ward is the Executive Director, Strategy &
Business Development for Television Broadcast Services.
He is also the Chair of the Asia Pacific Chapter of the
Society of Satellite Professionals International (SSPI).