Clarifying the iPod threat

From Inside Radio (and others):

The iPod will become a bigger in-car competitor to radio — but satellite radio takes a bigger hit. That’s what some analysts are saying — pointing out that both are alternatives to terrestrial radio…. What’s different now is that we’re seeing news headlines about “trouble for satellite from iPod.”

To the degree that a lot of Satellite’s appeal is sourced in the absence of commercial interruptions and the breadth of options, this is certainly true. However, radio – satellite or terrestrial – is aimed at folks who own the music they own, but want to hear more. Besides, much of the most popular programming on satellite is non-music programming – and some of it is exclusive to satellite. And little to none of this will be available on even the most packed-full iPod.

So it seems to me that the only reason why satellite would be hurt more than terrestrial radio in this game is that satellite is smaller and much younger in its lifecycle and, thus, has less it can afford to lose and would feel that loss more sharply. And, of course, you have to buy satellite while your car already comes with radio for free.

Don’t forget – you have always been able to listen to iPods in cars. And you don’t even need optional equipment – you just need earbuds and ears.

And there’s more: iPod owners and current and prospective satellite (or terrestrial) radio owners are not necessarily the same people. Their needs and motivations are very different. The iPod is a chore to program and maintain. The radio (terrestrial or satellite) is easy to listen to. The former is for your personal mix of music. The latter is for passive listening and your favorite non-music programming. While making it easier to listen to the former will affect the latter, it’s not likely to “kill” anything. There is overlap, but one is not necessarily a substitute for the other. There will be lots of drivers on the road with no iPod attached to their cars.

What does’t make the Inside Radio headline, of course, is the impact this will have on the prospects for HD Radio. HD Radio will be even MORE vulnerable than satellite to mobile iPods because HD is even newer and has an infinitely smaller market than satellite.

So will easy and attractive hook-ups for iPods affect radio and satellite radio? Absolutely. But it won’t kill either. It will, howevever, be another speed-bump out of the starting gate for HD. And another nail in the coffin for CD’s.