...Title of the Case: Satellite Radio (B) Time Context or Period: 2005-2008 Summary of the Case: Late 2005 proved to be the high point of expectations for satellite radio due to the unexpected increase of subscriptions for Sirius and XM Radio that even surpassed forecasts made a year earlier. As 2006 progressed, the growth rate started to decelerate and both companies have continued to lose money. Competition in the market became stiffer because of the rapid growth of technology which led to the birth of new gadgets used in consuming music. Also, a sharp downturn was also experienced by the auto business due to the crisis felt the by the United states. Because of these factors, Sirius and XM Radio have decided to undergo a merger agreement because of the benefits that the merger offers. However, the proposed merger faced regulatory hurdles with the Department of Justice and the FCC, and oppositions from the National Association of Broadcasters (NAB). Later on, in March 2008, the Department of Justice and the FCC gave their “go signals” to the merger provided that the new company, which is named Sirius XM, to offer more content a la carte pricing which gave a huge impact on its revenue. Despite positive cash flows that the forecasts stated, Sirius XM continued to have difficulties, especially in funding current liabilities, because of the crisis felt in the automobile industry, and by late 2008, the stock of the new company was traded under $0.40 a share. Mission/Vision...
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...Summary: XM satellite is a newly established company that has the potential and the ability to become leading satellite radio service provider in United States. At the time of the case, the demand for high quality, ad-free and mobile radio had a great potential and XM along with Sirius received a great opportunity to enter into the untapped market. XM’s only significant competition threat was Sirius. Both Companies were trying to capture market share from one another by creating superior customer access channels and build a brand image. These could have been done through retailers and strategic partnerships with radio producers for home and car markets. The home product brands include Sony, Pioneer, Matsushita and Car audio products include Sony, Pioneer Alpine, Delphi and Visteon The major issue for XM was how to market, how to price and what will be the value proposition. Since there were only two companies in the market the pricing of the service could significantly shift the demand and estimated/desired earnings. In order to thoroughly analyze the problem and seek viable alternative solutions I will try to list some of the key marketing issues. Key marketing issues include but are not limited to: * Creating brand awareness: In my opinion it is very important to mention that potential future customers are only the ones who are aware of the brand. The creation of brand awareness would be complicated given the company’s value proposition to keep ads off the radio. *...
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...2/27/12 Research Paper #1 Satellite Radio: Past, Present, and the Future Satellite radio, also called digital radio, is a relatively new technology to hit the audio broadcasting industry. Satellite radio is transmitted from 22,000 miles above the earth through a multitude of different satellites stationed over the United States (Bronsor, Howstuffworks.com). Through means of digital transmission the signal received and heard in satellite radio is often regarded as superior to the traditional radio experience. It emerged in 2001 with Tim McGraw being the first one to ever broadcast live on the newly developed system. It has been highly regarded as just a trend and having been invented in the wrong decade, however the major provider claims to have 20 million subscriptions to their radio programs (SEC, Form 10-K). While that is a substantial number of subscribers the technology has failed to capture the market as a whole. Its availability has been undermined by a monthly fee around 15 dollars, which has done a good job inhibiting ambitions to jump onboard this new advancement. Digital radio is a great invention however it is seen more as a prestigious service than it is as the next major form of radio for all. Two major players throughout its existence, Sirius and XM, have controlled digital radio since the beginning of its popularity. The two companies were the only two licensed for the rights by the FCC to broadcast radio by means of satellite (Hart, Washington Post)...
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...FM Broadcasting began in Alpine, New Jersey right on the top of the New Jersey Palisades. This was where Major Edwin Howard Armstrong, the inventor of FM radio built Alpine Tower, also known as “Armstrong Tower” in 1937. As the discoverer of frequency modulation “FM” in 1933, Armstrong spent many years experimenting on this discovery while working for RCA. Armstrong went through several legal battles throughout his thirteen years of FM discovery and research (and following his death). On April 10, 1938 Armstrong broadcasted for the first time on FM radio, from his experimental call sign W2XMN. The FM radio was discovered after RCA’s former president David Sarnoff asked Armstrong to provide “a little black box” that could eliminate the static that plagued AM (amplitude modulation) broadcasting (FYBush). Ten years later, Armstrong discovered how to change the radio waves frequency. After Armstrong’s discovery and when David Sarnoff realized how great his discovery was. “This is not an ordinary invention," Sarnoff declared, “This is a revolution." (Amplifier) Sarnoff gave Armstrong RCA’s experimental television laboratory on top of the Empire State Building. Eventually, Sarnoff felt threatened by this discovery. RCA was slowly working on commercial television, and they did not want to spend extra money replacing radio equipment once Armstrong’s FM technology was accepted by the FCC (Federal Communications Commission). Armstrong was asked to remove his equipment from the laboratory...
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...to price, how to earn, sub or ad, single or tiered, manufacturers (how to proceed and which ones to contact), how to market –to consumers or to manufacturers and retail chains. Recommendations: Start off with higher radio and subscription prices because the market will take time to develop and XM should not be the bearing the brunt of the development costs. Later, lower prices on both aggressively in order to attract more subscribers and begin to introduce limited advertising. Work with auto manufacturers, offer subsidized prices, let radio manufacturers and retailers handle the home and aftermarket markets, offer subsidies. Target the male market and Hispanic/other direct, cell phone, content providers 1. What is the value proposition of XM to different consumer segments? Who should be the primary target market for XM? XM caters to the various consumer groups and better targets everything from broad groups to small niches. XM will offer better, more focused content to the consumer at a reasonable cost with ease of use and cheap to start and fewer commercials. XM should target the market that is most likely to result in paid subscriptions and to which its content is geared, look it up. 2. What aspects need to be considered in pricing the radio receiver and subscription fee? What is the optimal price for a monthly subscription? XM needs to consider the affect on the number of end subscribers based on the cost of the receiver and the subscription fee. They...
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...2.0 New technology disrupts the old model – Modern Day Challenges 2.1 Preamble With the increase in technological innovation we can observe how these forces are disrupting the conventional business models and marketing strategies of industries. These innovations have shaken core of the business world where several venerable facets of the media industry such as newspapers, radio and television are clamoring for their breadth under the impact of innovative giants such as Google and TIVO with large chunk of ad revenue shifting from conventional channels to more topical channels (refer graph 2.1). Why? Primarily, conventional media industries were not poised for changes, as we observed the break neck speed at which we have proceeded from web 1.0 to 3.0 within the last decade. Could the companies have avoided the wreckage if they had prepared for this pace of change? That is questionable. Graph 2.1 We can observe several strategic inflection points which have diminished the prominence of media industries; primarily, the ability of internet based technologies to deliver richer content in a cost effective manner in comparison to the high legacy cost of running a newspaper (i.e. office buildings, printing press, editors, photographers etc.). Second is the failure of the media companies to keep pace with the evolving changes around them, and the final elements of this downward spiral is the industries disregard for the customer base or the target market, i.e. producing content...
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...have high average fares with a diversified geographic flight schedules that include both short and long-haul routes. 2. Principle Products or Services: low-fare, low-cost passenger airline offering, high-quality customer service. 3. Markets: in Forest Hills, New York, 56 cities in 19 states, Puerto Rico, Mexico and five countries in the Caribbean and Latin America, international flights to Montego Bay(Jamaica), Cancun(Mexico), Barbados, Saint Lucia, Kingston(Jamaica), Santa Domingo(Dominican Republic). It is well positioned in the New York metropolitan areas (which is one of the largest travel markets). 4. Compete: new aircraft, roomy leather seats with lots of leg room, 36 channel of free DirecTV, 100 channels of free XM satellite radio, free and unlimited brand, and named snacks beverage. It also provides compensation to customers who experience avoidable inconvenience (JetBlue Airway Customer Bill of Rights). And refundable fares and new payment options launched JetBlue.com in Española. JetBlue Business Card can also be used. In flight, it is equipped with an in-seat digital entertainment system. Each individual seat has a monitor with armrest remote with channel and volume controls. 5. Concerns for Survival, Growth, and Profitability: operating expenses, functional costs, airline fuel cost and consumption increased, other airlines provide Wi-Fi access and enhanced in-flight entertainment options according to customer’s interests in low price as well as...
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...JetBlue reproduced many of SWA’s cost-reducing activities such as flying point-to-point to directly connect city pairs. It also predominantly uses one type of airplane, the Airbus A320, to lower its maintenance costs. And in addition, it flies longer distances and transports more passengers per flight per than SWA, further driving down its costs. So far, all these strategies have to do with cost-leadership. JetBlue also incorporated the differentiation strategy in their model. They executed the differentiation strategy by offering value-enhancing features include high-end 100-seat Embraer regional jets with regional jets with leather seats, individual TV screen with movies, Live TV, Fox TV, and Direct TV programming, 100 channels of XM Satellite Radio, and free in-flight Wi-Fi capabilities. By offering these unique features, JetBlue made an attempt to enhance their differentiation appeal. 2. What challenges is JetBlue facing with its chosen business strategy? What is the cause of these challenges? How should they be addressed? The challenges that JetBlue is facing not being able to create value anymore for the customers....
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...Web and Mobile Application “PANDORA” Glenn Davis CIS/207 23 April 2014 Instructor: Brenda Holland Web and Mobile Application “PANDORA” In the last 10 years there has been several advancements in the way we listen to music and access it through the vast many upgrades in technology. My Web and Application icon I chose to do my paper on is the Application called “Pandora”. Pandora was founded in 2000 close to the era when NAPSTER was pretty much fading out and there was a big in surge of Satellite Radio companies such as “XM and Sirius starting to develop. XM and Sirus started utilizing internet technology back then along with their primary means of medium which was car stereos and portable devices before the mobile application started to boom later in the years. That’s where PANDORA really started to capitalize and mark there territory early in the mobile market as other apps began to follow. I personally didn’t discover Pandora until I got my first Iphone 3rd generation back in 2007. Pandora started up as a Web application capitalizing off of web advertising and based its sales market early in the game with the starting new trend of offering a wide range of music with many (GENRE’s)- Musical preferences to the users with a wide selection of formats. Pandora built up their servers to accommodate that massive share of music became a big task for PANDORA engineers in the beginning, but they quickly expanding...
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...1worldspace, formerly known as 'WorldSpace', is an almost but not yet completely defunct satellite radio network that in its heyday provided service to over 170,000 subscribers in eastern and southern Africa, the Middle East, and much of Asia with 96% coming from India. Timbre Media along with Saregama India plan to relaunch the company.[1] The final fate of the original Worldspace satellite radio service still remains a mystery. Despite the company's very public insolvency and the liquidation of all of its various commercial entities in 2008-2009, the company's Afristar and Asiastar satellites remain in geostationary orbit. Currently, the channels WRN 1 and WRN 2 can be received on Afristar with audio.[2] On AsiaStar, there are 2 channels broadcasting (the old Maestro channel and Sai Global Harmony which is an Indian religious channel). The precise commercial basis on which the Afristar and Asiastar satellites currently continue to be maintained in working satellite orbit by Intelsat is not known at the present time. Contents [hide] * 1 OverviHYPERLINK "#Overview"ew * 2 Content * 3 The 1worldspace System * 3.1 Space segment * 3.2 Ground segment * 3.3 User segment * 4 Controversies * 4.1 Stock value * 4.2 Debt * 4.3 Bankruptcy * 4.4 High-profile resignations * 5 Promotional information * 6 Philanthropy * 7 Historic Plans For Service Development * 8 References * 9 External links Overview[edit...
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...Introduction Headquarters in New Yorok City, Sirius XM Radio, Inc. is the only provider of satellite radio, broadcasting more than 130 channels of digital audio via satellite to subscribers throughout the United States and Canada. The company's programming includes 65 channels of commercial-free music from every genre and 55 channels of news, sports, comedy, and talk radio. With impressive line ups of celebrity such as Howard Stern, Oprah Winfrey and Martha Steward there is something for everyone. Sirius's broadcasts are beamed from four in orbit satellites to more than 19.5 million subscribers who pay a monthly fee of $12.95 (Sirius). The service is mainly offered through new car sales with companies including Ford, Chrysler, and BMW among others penetrating 55% into the US market which accounts for 40% of their annual sales based on the 2009 annual report. Retailers like Wal-Mart, Best Buy and Radio Shack sell similar Sirius units for home and boat use. “Recently, Sirius has expanded to include music and comedy channels to mobile phone users; and music channels and select non-music channels over the Internet; a suite of data services; services that offer graphic information; and various real-time weather services, as well as operates a television service, which provides content designed primarily for children in the backseat of vehicles” (Sirius). These expansions are critical to the long term success of Sirius Satellite Radio which claims to be the station you can listen to...
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...XM’s value proposition to the market is to deliver diverse high quality digital radio content to consumers across various demographics and nationwide via a complex satellite and terrestrial network. A key advantage with XM’s satellite radio over AM/FM radio is the near-ubiquitous radio coverage that significantly strengthens broadcast signals outside the traditional broadcast area. Given the vast and high-growth car radio market and strong home segment demand, XM should target both submarkets. When pricing the radio and subscription fee XM needs to evaluate the potential demand for the product/service based on various revenue and cost assumptions, cost/benefit of advertising vs. not advertising, and the profit implications for various scenarios. Based on expected consumer response and an analysis of the above factors over a five yr. customer lifetime, we determined that XM should start offering a $100 radio with ad-free service of $10/mo. (SIRIUS price) and with-ad service of $5/mo to attract customers ($9.2 bn profit). As XM builds its customer base over time, it can raise the product/service prices to generate higher profits. By doing so XM could reach out to potential consumers who desire satellite radio but are not willing to pay the high $10/mo. ad-free fee. Furthermore, XM could differentiate itself from SIRIUS and retain customers by offering exclusive programming. The benefits of including advertisements are expected to outweigh the costs and can provide...
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...Sirius XM has established a deep economic mote in its industry. Sirius Satellite Radio and XM Satellite Radio were the two largest satellite radio providers in the U.S., but these competitors were both losing. In 2008, they merged to become Sirius XM and are now the only satellite radio provider in the U.S. Due to high startup costs for a satellite company, Sirius XM does not have any competition. In 2014 Sirius XM had 27 million subscribers or about 13.5 % of the total market with annual sales approaching 4 billion. Sirius XM's signal spreads throughout the entire country and it has brand recognition countrywide. Contrary to free charge, ad driven radio such as Pandora, Spotify, and iHeartRadio, Sirius XM is a subscription-based model, which generates revenue via customer payments at a fixed cost. Sirius XM differentiates themselves by offering a variety of options and an abundance of stations for all listeners. They have select radio stations, artist specific stations, and talk shows that can only be heard on Sirius XM making it different from its low barrier to entry “free music” competitor market. For example, the Howard Stern show is exclusive to Sirius XM. They offer a unique commercial free listening experience that can be heard from your car, computer, tablet, or smartphone. Customers can listen via satellite or via the Internet. The company offers services not only for automobiles, but also for planes, boats, and businesses. The company has managed to partner...
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...XM satellite radio and Sirius satellite radio are the duopoly companies that compete each other in imperfect competition market in order to replace radio wave, FM AM, with satellite radio. There are barriers to entry this market since it needs a high cost. FM and AM are government owned and the network coverage is limited. In order to eliminate this complication, XM and Sirius introduce satellite radio, which have competitive advantages such as nationwide coverage, high quality audio, wide array of entertainment options, easiness to access. However, Sirius strategy is to create a free commercial radio and used subscription based service. In my opinion, in order for XM to win over Sirius is, to have wide variety of subscription fees targeting different segments of markets. For example, to price sensitivity customers, XM could charge them lower subscription fee but with a few advertisement. Nonetheless, higher prices for customers who want commercial-free radio. By that way, XM could generates revenue from advertising service from price sensitivity customer and at the same time not losing the advertising service revenue from not price sensitivity customers since they are charged higher price. The aforementioned strategy leads to higher income to the company in compare to Sirius company that adopt subscription-only model. Thus, the supernormal profit could cover the expected annual operating expenses that are high-priced. The other strategy is ‘keeping that customer’ strategy and...
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...The Sirius XM Radio Stock I chose Sirius XM Radio as one of my stocks because as I was reviewing the stocks I was going to pick for this project , I saw that Sirius XM Radio was doing rather well. Sirius XM Radio was founded in 1990 by Martine Rothblatt but officially became a big name in 2007 when it started being used in the production of popular cars such as Ford , Mercury , and Lincoln. Sirius is just a leading brand in satellite radio because it delivers absolutely the best quality service as I have personally experienced. Here is a picture of how dramatic the rise from 2007 to 2012 was in the Sirius XM radio stock. The EBAY Inc. Stock I chose EBAY as one of my stocks because I love ebay. Ebay is a great place to find really nice things for a really good price. Who wouldn’t want that ?!? Not only does it satisfy the public’s needs but it does phenomenal in the stock market. Ebay was founded in 1995 by Pierre Omidyar for the sole purpose of connecting people and trading goods and services. Ebay does so well because of the amount of partnerships it has with big names such as GM or Disney. Ebay is also used by certain stores who only sells things through ebay. Here is a picture of Ebay’s rise in stock prices from 2008 to 2012. The Netflix Inc. Stock I chose Netflix as one of the stocks for my report because I also love Netflix. All you pay is eight dollars a month for unlimited movies!! Its great! But , Netflix...
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