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Sirius XM Radio (NASDAQ:SIRI) Listeners Want BBC Radio 1 Back On The Satellites

|Includes: Sirius XM Holdings Inc. (SIRI)

By Demian Russian

Bring Back BBC Radio 1 to Sirius XM Radio (NASDAQ:<a href='' title='Sirius XM Holdings Inc.'>SIRI</a>)In a move that stunned many BBC Radio 1 fans, Sirius XM Radio (NASDAQ:SIRI) suddenly and without warning pulled the plug on the channel early last week, replacing the channel with the new Disco channel Studio 54. Many regular BBC Radio 1 listeners were taken off guard upon hearing Disco from their speakers when tuning to the channel. Further confusion resulted when BBC Radio 1 fans all across North America began looking for answers.

With no official announcement from Sirius XM, BBC Radio 1 listeners began calling Sirius XM’s customer service for an explanation. Some were told that the channel was still on the air and that maybe there was something wrong with their radio. According to reports, it appears that many customer service representatives were unaware of the channel’s removal and some were even confused about the difference between BBC Radio 1 and the BBC World Service channel. When it eventually became clear that the channel was indeed gone, many BBC Radio 1 fan’s confusion transitioned into anger.

BBC Radio 1 fans began to unite online via Twitter and Facebook. The ‘Get BBC Radio 1 Back on Sirius XM‘ Facebook page quickly garnered over 4,000 likes in a week. Not only were these Sirius XM subscribers and BBC Radio 1 fans angry about the sudden removal of their beloved channel, they were angered by how they were being treated as a customer by the company. Many were irate that as a paying Sirius XM subscriber they were given no advance warning or even a confirmation that the channel had indeed been cancelled. When looking to the company for answers, many were just looking for an explanation. Was there a technical difficulty? Was it temporary? Was there something wrong with their radio? Why was it gone? Was it coming back?

The following week, on Tuesday, August 16th, Sirius XM announced that BBC Radio 1 would be returning to their Internet Radio platform and that some BBC Radio 1 programming would also be returning to the Satellite Radio platform at various times throughout the year, coinciding with major events in BBC Radio 1’s programming schedule. This did little to appease Sirius XM subscribers who were hardcore BBC Radio 1 fans, as BBC Radio 1 was already easily accessible online for free via the BBC iPlayer as well as other apps such as TuneIn Radio. They wanted BBC Radio 1 on their Satellite Radio, in their car and easy to access.

Following a very informative interview with Strategy Analytics Senior Analyst John Canali on Wednesday night’s Playground Radio program, I was expecting to discuss the usual topics of the market and Sirius XM’s stock chart with my co-host Spencer Osborne and our listeners. We were amazed to see the switchboard light up with call after call from listeners irate about the cancellation of BBC Radio 1. For close to two hours we heard passionate callers eloquently convey how important BBC Radio 1 was to them on Sirius XM’s Satellite Radio platform and how upset they were with the channel’s sudden removal, as well as the lack of communication from Sirius XM. Many said that BBC Radio 1 was not only their favorite channel, but in many cases was the only channel they listened to. Many felt that they were being disrespected as a paying customer and indicated that they either already had or would be canceling their Sirius XM subscription.

Why was BBC Radio 1 cancelled? It comes down to bandwidth restrictions and how Sirius XM perceived the numbers. Sirius XM’s Satellite Radio bandwidth and the ability to launch new channels is limited until the roll out of Satellite Radio 2.0. Sirius XM’s contract with the BBC had come up for renewal and negotiations failed to bring a deal. While it is not publicly known what the programming cost of BBC Radio 1 was to Sirius XM, it is easy to assume that the in-house produced Studio 54′s programming costs are substantially less. With the cancellation of any programming, especially niche programming, there are always understood and accepted risks that some subscribers may cancel, but it is always hoped that the new replacement channel’s programming will garner new subscriber interest and/or that the resulting cost savings will be worth it.

Was the cancellation of BBC Radio 1 worth it to Sirius XM? While it’s easy for the company to track the interest in its online offerings, it is much more difficult for the company to know who is listening to what on its satellite platform. Especially since BBC Radio 1 was and still is available for free online via other sources other than Sirius XM’s Internet Radio platform, it would be even more difficult for the company to gauge the channel’s popularity with it’s Satellite Radio subscribers. While there are likely internal company studies estimating BBC Radio 1′s listenership, it is also important to measure the passion those listeners have for the channel. How many of the channel’s listeners only subscribe for that channel alone? How many will view the cancelation of the channel as a “deal breaker” and cancel? Factoring in the costs of programming throughout Sirius XM’s universe of channels, why cancel BBC Radio 1? Are there not other channels that could’ve been cancelled instead with less of a risk of subscriber outrage and cancellations? While substantive listener studies can be expensive, guessing can be even more expensive — especially if those guessing are unable to recognize the world class quality content that is BBC Radio 1.

BBC Radio 1 offered unique and compelling content to Sirius XM Satellite Radio listeners. For many British natives living in North America, the channel provided a connection to their homeland as well as an old friend. For others, it provided an entertaining window into another culture. Studio 54′s Disco programming cannot replace that. While the company has suggested to BBC Radio 1 fans that some of the channel’s music can be found on other Sirius XM Radio channels, BBC Radio 1′s variety, personality, and companionship simply cannot be replaced. Listening to the flood of caller’s passionate and heartfelt stories on my radio program last Wednesday made this abundantly clear. While listeners preferred the ease of use of listening to BBC Radio 1 on their Satellite Radio, many are now being forced to explore other Internet Radio options to access their favorite channel in the car. While many callers said that they either had or were canceling their Satellite Radio subscriptions, many callers also said that they were willing to pay more if only the channel would be returned.

From a business perspective, several important points were made clear from the flood of passionate callers:

  1. There is demand for and value in Sirius XM’s Satellite Radio platform, made clear by the fact that these listeners preferred to pay Sirius XM to hear BBC Radio 1 on their Satellite Radio rather than listen to the channel online for free.
  2. There is value in premium content such as BBC Radio 1, made clear by the number of callers who indicated that it was their favorite and in many cases the only channel they listened to — thus in many cases the only reason they were a paying Sirius XM subscriber.
  3. Consumers are willing to pay extra for premium content, made clear by how many listeners said that they would be willing to even pay more if only the channel was brought back.
  4. Consumers like to be kept informed about any changes to the services they are paying for and would also like their voices heard and their input considered in regards to any such changes, as evidenced by how many listeners felt disrespected as a paying customer by the company’s lack of or poor communication with them.

Did Sirius XM misjudge how many passionate BBC Radio 1 listeners they have/had as subscribers? Without knowing the actual BBC Radio 1 programming costs it’s hard to know for sure, but seeing the viral online outrage and hearing the flood of passionate callers on my radio program argues that they did. Furthermore, Sirius XM’s communication with it’s paying customers clearly needs improvement. Content is king and paying customers should be treated as such. Something is not right here. Sirius XM’s satellites are missing a friend. Bring back BBC Radio 1!

What are your thoughts on Sirius XM’s cancellation of BBC Radio 1? Leave your comments in the comment box below.

Disclosure: Long SIRI
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