Amazon Should Acquire a Satellite Radio Company

Amazon Echo for the car is going to dramatically disrupt the satellite’s existing radio business model. This may even impact the way we listen to am and fm radio over the next decade.

Amazon Echo for the car is a small device that leverages the internet on your phone to connect to Alexa.

It’s design is simple with only two buttons, the action button and the microphone on/off.

  • With eight microphones and far-field technology, Echo Auto can hear you over music, A/C, and road noise.
  • Use your voice to play music, check the news, open the garage door, find the nearest gas station, and more.
  • Play Audible audiobooks, stream podcasts, or listen to Amazon Music, Apple Music (coming soon), Spotify, Pandora, SiriusXM, or NPR.
  • Make calls, set reminders, add items to your shopping and to-do lists, or manage your calendar.
  • With over 50,000 skills and counting, Alexa is always getting smarter. Skills are like apps and let you do more with Alexa.
  • Set location-based routines — automated actions Alexa can start when you leave the office or get home.
  • Ask for directions and Alexa can start navigation on your phone with supported apps like Waze, Google Maps, and Apple Maps. Echo Auto is not compatible with Apple CarPlay and Android Auto.

With Internet everywhere now days, one might ask, “what is the purpose of satellite radio if I can get everything I want via the Internet, virtually anywhere?” The satellite radio execs will tell you that you have exclusive content with satellite radio that you can’t get anywhere else. They will also tell you it is already integrated in most new cars. They will also tell you that they can beam radio and audio content to you when there is no Internet access. All good points now, but what will all this look like within the next 10 years.

  1. More quality content is being produced now than ever before. The cost to produce high quality shows no longer means paying more for audio content that historically was expensive to produce. This cost will continue to decrease allowing for new audio media companies to enter the space.
  2. The barriers to entry for these smart speakers to enter the car is now virtually 0. Google Home , Amazon and even Sonos will continue to develop hardware that will make it easy to self install into any car, regardless of car age.
  3. Within 10 years, every sq in of the world will have Internet access. Access will come from satellites and even weather balloons.

In 2017, Nielson found that 50% of American discovered new music via online radio and online music services. This is compared to only 14% for satellite radio.

At the end of the day, audio content is becoming more democratized and accessible at anytime and anywhere. The need to pay monthly subscriptions for this type of quality content will no longer be the only option. With the digitization of audio, the future of audio will be free for listeners and be monetized through other ways including rich audio ad content that will be delightful to the listening audience.

So, with all that said, why should Amazon buy a satellite radio company? Here are a few reasons why it would make a ton of sense.

  1. Access to exclusive content that could be rolled into the Amazon Prime subscription model. (Amazon could sell many more Prime memberships.)
  2. The satellite network of a SiriusXM for example could help Amazon within other divisions of their business like logistics, Internet access, etc.
  3. AmazonMusic would benefit greatly with the additional music and unique content, differentiating them from Spotify and others.
  4. In the short term, the additional internet access in rural areas could boost Amazon listening and Alexa adoption.
  5. Amazon would gain immense listening and other forms of data to make other Amazon products better

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