Some interesting posts abound that Google is interested in purchasing US satellite radio outfit Sirius (or maybe even the combined XM/Sirius). Pretty much as soon as the rumour came out everyone was dismissing it, however I think there’s some corporate sense in doing a deal. And that’s because satellite radio allows data and advertising distribution to consumers.
Collectively XM/Sirius have 16m subscribers each paying at least $10/month to receive 150-odd nationwide radio stations, some music stations are ad-free but the rest have some spots and sponsorship – that’s two revenue streams. Ads are important as Google’s been developing AdSense for Audio a radio spot selling business stemming from their purchase of dMarc in 2005. In fact XM has been a partner with Adsense selling ads on their stations already.
If you’re selling airtime, one of the main things you need is inventory, and there’s bucket loads of it on satellite radio. Some commentators say that this would annoy their terrestrial partners, I think regular radio has enough to worry about. If the cheque’s big enough they’ll happily take Google’s money.
In addition, Google’s desire for more location based advertising is a perfect fit with satellite radio. Different ads and in audio, video and text based on where you’re car is? Yes please say they advertisers.
As well as providing radio stations, satellite allows the operators to broadcast great chunks of data to mobile vehicles. This also fits into Google’s recent strategy of getting hold of more over-the-air bandwidth. Whether it’s back seat TV for YouTube or business-to-business applications, data over the air is a good business to be in too.