BY KURT HANSON
By offering their 60 channels of commercial-free music as free audio streams to Internet users -- albeit possibly only temporarily as a promotional tool -- nascent satellite radio competitor Sirius Radio launched on Monday what this writer believes may be the best multichannel webcast in America!

How did this happen? Well, the two satellite operators -- XM and Sirius are each (or have recently been and, depending on their stock price, may again soon be) multi-billion dollar companies with multi-million dollar programming budgets. Each has built elaborate, state-of-the-art facilities with dozens and dozens of studios, allowing each to broadcast more than 100 channels of digital radio programming -- aimed at an upscale, tech-oriened audience and with low spot loads.

Sirius, which is running several months behind XM in its launch (and dogged by questions as to whether the chipsets in its car radios actually work properly -- see story below in today's issue), realized that if you take those channels of programming, offer them in 47 Kbps stereo Windows Media streams, and build a customized front-end for Windows Media Player (to show graphics, display "Now playing," and provide presets), you can provide a great multichannel Internet radio product!

Whereas the existing major multi-channel operators (e.g., Spinner) are essentially just playing a series of CD tracks with pauses between cuts and occasional spots or sweepers, Sirius's live approach (although I assume it's actually live-sounding -- i.e., voice-tracked) means the stations can sound great. (For example, the records can segue tightly and the channels can feature DJs doing frontsells and backsells.)

The key is that Sirius has a programming budget that's insanely too large to make any sense for a webcaster -- probably by an order of magnitude. But the fact that the webcast is a "repurposing" of existing content makes this approach possible.


The biggest downside:
No interactivity, no limited personalization
Musically, most of the channels I checked out seemed, on first blush, to be extremely well-programmed. Some webcasters seem to program a channel by encoding every track from every CD in the genre that they own. (Remember when the now-defunct WWW.com bragged about having a 700,000-song playlist?) Sirius's music programmers, on the other hand, seemed to use some reasonable judgment in their music selections.

But the downside of a webcaster offering offering live or simulated-live programming is that they can offer absolutely no personalization or interactivity whatsoever. (It's inherently impossible.) What that primarily means to the listener, in my opinion, is that they can't offer the "skip" button -- and I believe that that's a key benefit of listening to Internet radio.


Nice player, weak website,
confusing channel names
Here are some other observations about Sirius as a webcast product, based on a couple days of listening:

(1) Sirius has designed a really nice custom player for its Internet listeners, including the unique feature of constantly showing the last five songs the channel played and a very efficient approach to settings presets. (Unfortunately, however, the player only has four presets, which might be an example of "broadcast radio" thinking. Broadcast radio listeners may only listen to three or four stations, but multichannel Internet radio listeners listen to more channels than that.)

(2) Although the player is really nice, the Sirius website, on the other hand, is a god-awful mess. (Multiple, conflicting menus, key features that are difficult or impossible to find...Enough fodder for a complete column at a later date.)

(3) Sirius has branded each of the channels with its own clever name, which has both pros and cons. It certainly has its branding advantages once a listener settles on a channel he or she likes. That's good. On the other hand, I can't find the new ones I want to try. For example, I want to list to CHR. Is that "The Trend," "The Vortex," "The Strobe," "First Wave," "E-1-7" or "Octane"? I have no idea! Nor the patience to try them all to find out!

(4) Sirius has chosen to stream its programming on the web, as noted above, in a 47 Kbps stream, which offers nice quality but makes it essentially unlistenable on a 56K modem. If the purpose of the streaming is to help sell radios and subscriptions, it doesn't quite seem to make sense to limit listening to a small percentage of the potential market (that is, those with high-speed Internet connections). If you have made the jump to broadband however, the quality of the stream is terrific.

(5) There are obvious missing formats, especially considering what I imagine is the target audience for satellite radio. (Prime example: Modern A/C. Either (a) they didn't research their format choices, or (b) my instincts, based on years and years of being a radio researcher, are wrong, or (c) the format is in there somewhere but I can't find it.) Rock and Pop are well covered, but Classical music has only three channels, and the entire span of electronic music is given two channels.

(7) Thus, let me reiterate my point #3 above: There are several different buttons on the player (Playlist, Rate song, Feedback, Buy CD, Help) but no way to get to the "Channel Guide" -- which would have to be the most-needed feature! (Yes, I tried "Help." It's not there.)


Conclusion: Webcast has sold me
on satellite radio
What surprises me most is that Sirius's multi-channel webcast has totally sold me on satellite radio. (By giving it away on the web for free, they're getting me as a customer in the "real world." This is exactly how the Internet was supposed to work!)

Until this week, in the back of my mind I guess I've equated satellite radio to the cable radio I subscribed to and liked for a couple of weeks in the early 1990s, until I got tired of its "Load-the-multi-disc-player-with-50-CDs-and-hit-the-'randomize'-button" approach to programming.

But now that I've found some favorite Sirius channels at work, I want to listen to them in my car. So I'll bet I'll be going to Circuit City this weekend and signing up for satellite radio -- which, of course, in January 2002, means XM!

Look for RAIN's review of XM Satellite Radio in an upcoming issue of RAIN. And contribute your feedback on the topic of satellite radio here.

...

... One odd aspect of this chapter in the rollout of satellite radio is that the wrong company seems to be doing the webcasting! If Sirius was running some spots on their webcast stations, there could actually be a viable business model here -- not enough revenue to support a multi-multi million programming budget, but at least an initiative that could make a contribution to the company's revenues. However, it's XM that's running spots on their music channels! That's the one that could make a little money (from advertisers) by offering a webcast. ...

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From Bloomberg.com: "Sirius Satellite Radio Inc.'s partners DaimlerChrysler AG and Ford Motor Co. won't install many of the radios needed to receive its programming until the 2004 model year, said Chief Executive Joseph Clayton...

"By Aug. 1, Sirius expects to begin selling its service nationally, said Clayton, who was hired as CEO on Nov. 27. Problems with the integrated circuit chips used in its receivers delayed the launch for more than a year. He said he's confident the bugs have been fixed...

"Clayton said Sirius doesn't expect many sales to automakers until the 2004 model year. 'In terms of mass volumes, that will be with the next generation of our product, where the costs will come down almost 50 percent,' said Clayton in an interview at the Consumer Electronics Show in Las Vegas. 'That will be next year -- in the second half...'

"A spokeswoman for DaimlerChrysler said no decision has been made yet on when her company'sdivisions will begin installing Sirius radios. 'Those times are not set in stone,' said DaimlerChrysler spokeswoman Mary Beth Halprin. 'The quality has to be there...'

"Jeffrey Owens, president of the company's Delphi Delco Electronics unit, said Delphi is still waiting for the final chipset needed for testing and certification of the Sirius radios it will build for DaimlerChrysler. 'We should have had it a long time ago,' said Owens."

Read the article here. An R&R report, filed after this story, says Sirius spokesperson Mindy Kramer told the paper that they expect to have radios in DaimlerChrysler vehicles in the 2003 model year through both factory and dealer programs. Sirius also told R&R that the chipsets have indeed been delivered to Delphi and that they await OEM validation. Kramer told the paper, "That has no impact whatsoever on our Feb. 14 launch."

From Salon.com: "Under the terms of the 1998 Digital Millennium Copyright Act (DMCA), radio stations around the country are supposed to pay thousands of dollars in annual fees to broadcast streaming audio over the Web. Managers of college and community stations say while their commercial counterparts may be able to pay the fees, their stations don't have the cash and will shut down their webcasts.

"Webcasting was once touted as an example of the Internet's leveling power -- it allows small local stations to reach Internet users all over the world. And college stations, which run tight budgets and eclectic playlists, fit the webcast bill perfectly...

"As the 1998 Digital Millennium Copyright Act came together, says [eMusic founder Bob] Kohn, the Recording Industry Association of America (RIAA) and the Digital Music Association, or DiMA, struck a deal: The DiMA, made up of webcasting heavies such as MTV, wanted to shut small webcasters out of the market. The RIAA wanted money for its artists and record companies. The RIAA got their fees -- and the fees effectively strangled the interest in smalltime webcasting, says Kohn. The fees may end up doing the same for college webcasting.

"'That's just pathetic,' says Jonathan Potter [pictured], head of the DiMA. 'The MTVs and AOLs of the world have spent millions to argue for lower rates for everybody.' Agreeing to webcast fees was painful, and was only done because members of the DiMA, faced with huge lawsuits over copyright infringement, had their back to the wall, says Potter...

"KALX pays a total of $623 per year to songwriters (as opposed to performers) to play music over the Web. The fee is low, [station manager Sandra] Wasson said, because [UC Berkeley station] KALX doesn't run advertisements. If the recording industry's fee proposal goes through, KALX would have to dish out $10,000 to $20,000 a year in webcasting fees, Wasson said. And the fees would be retroactive to 1998. 'On our small budget, there's just no way we can afford those amounts,' says Wasson, who also notes that KALX's $200,000 yearly budget is huge compared to most college stations."

This entire article is here. RAIN readers can access the entire text of the DMCA (in .pdf format) by clicking the link under "Resources" in the left-hand menu of the RAIN page.

RAIN recently covered the story of a group led by Rice University radio station KTRU Will Robedee and their efforts to convince lawmakers that noncommercial broadcasters need special protection from the DMCA here. Some details of Potter's efforts to convince a House committee to begin legislation to relax DMCA requirements is here.