A few days ago, I heard a commercial for XM Satellite Radio (ticker: XMSR) while listening to 92.3 K-ROCK (WXRK, New York). Considering that the terrestrial radio industry is under siege from XMSR and Sirius Satellite Radio (ticker: SIRI), I found this very strange and somewhat ironic. Here are some thoughts:
Isn't it strange?
Radio stocks have been badly beaten down during the past year largely due to the threat from digital technologies, such as satellite radios, MP3 players and Internet radio. (see the latest post on media stock price performance for evidence), So it seems quite strange that WXRK advertise its competitors.
Isn't it ironic?
I also found it ironic to hear XMSR ads on my car radio? After all, one of XMSR's main selling points is its "100% Commercial Free Music" (note: its non-music stations do have commercials). The truth is that this isn't so strange. XMSR advertises through terrestrial radio because that's where its target audience is...listening to their radios. That's why internet companies advertise online to reach their target audience. So at some deeper level, even as it tries to defeat it, XMSR needs terrestrial radio...or at least its commercials.