There have been executives quitting over costs for content, a huge battle over buying up celebrities and sporting events plus a number of other elements, that make Satellite Radio a huge bubble that could possibly bust.
I wonder where they get their business model from? I've got a bunch of money, I spend it, I can't cover my expenses and now I'm out of business.
Anybody can spend money, that isn't a business model. The Internet bust proved that as money poured into it and it was spent with nothing to show for it.
Is this the same situation? Well, what the stations do have is content from big-time celebrities lined up. So from that point-of-view, there is something to show for it. But even the stations are negotiating a cease fire in the talent search as their costs are astronomical.
Naturally, both XM and Sirius claim the upper hand, but they seem to agree on one thing: A de facto truce has been declared.
"We're done with the big programming deals," Panero said the day he announced the Winfrey arrangement.
"We concur in that," said Sirius president of entertainment and sports Scott Greenstein. "Our lineup is complete the way it is."
While some are saying that Sirius has an edge in "compelling" content, most say it comes a too high of a price. This year alone they will spend $240 million on content.
But it remains to be seen if they really have a content edge. Sirius is set up for the young male audience, while XM is set up over a more even demographic, which probably will appeal to a wider range of people.
The question that decides it will be who is listening to satellite radio. The answer will determine the winner of this contest, if there even can be a winner after the spending spree both companies went on.
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