Motorola Says iRadio Service Cheaper than Satellite, with More Channels
Motorola, making a foray into music, will offer a pay radio service boasting more channels and a lower monthly fee than satellite, it said Tues. The iRadio service, unveiled with few details, will deliver more than 400 channels of music and talk radio through Bluetooth-enabled devices. That’s about 3 times the number of channels carried by XM and Sirius. IRadio will cost $7-$10 monthly, said a spokesman for Motorola. That compares with just under $13 charged by the 2 satellite rivals. Five types of iRadio compatible phones are on display at CES, said the official, noting Motorola CEO Ed Zander will demonstrate iRadio features tomorrow (Thurs.) at the show. Officials at Sirius and XM had no immediate comment.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
The service, to be available later this year, won’t likely be subject to FCC regulation. That’s because content will be sent to devices including Motorola’s new ROKR headsets over a broadband connection, said the company official. A cellphone will send the signal to a car radio, home stereo or headphones. “It’s much more along the lines of a portable music player and is not a broadcast music service,” said the spokesman. That tack partly mimics Motorola’s strategy of offering music on other portable devices. The company has unveiled a partnership with Apple to create a wireless jukebox of sorts, albeit with less storage capacity than most iPods. Piggybacking on the success of music download services may help iRadio sign up customers, said analysts.
A lower price may be a prime selling point. “They're leading with price,” said Jim Kelleher, an Argus Research analyst with a “buy” rating on Motorola stock. “The other thing they're leading with is you can move the product from your cell phone to your car,” he said. Still, Kelleher and counterparts were cautious in expressing enthusiasm for the service. “I think pay radio in general is an uphill battle…radio by its nature is a broadcast medium that comes at you,” he said. “It’s an oar in the water to see if there is some traction here, but I wouldn’t be surprised to see if it belly flopped.”
Motorola was undaunted in its quest to get more money from selling services. “Consumers expect more choice and more portability,” said the company spokesman. “The market is ready.” Wireless providers can start “working with us” on the service, which could be available as soon as June 30, he said. Clear Channel will provide music for 75 channels, said Jeff Littlejohn, an executive vice pres. for the firm’s radio business. “Some details are still in flux,” he said. Clear Channel officials declined further comment. About 30% of iRadio’s channels will feature talk formats, said the Motorola spokesman.
Robust growth of satellite radio subscribers may signal success for iRadio, said an analyst. Sirius and XM have almost 10 million customers total. “Certainly XM Radio and Sirius have shown a level of popularity,” said Lawrence Harris, an analyst at Oppenheimer & Co. with a “buy” rating on Motorola. “There are a large number of AM and FM stations…but there does appear to be a high level of interest in different formats,” said Harris: “Some of the older business models for not only radio but TV as well are starting to break down.”