Multiple scientific theories suggest that when dinosaurs went missing some 65 million years ago, it was due to a massive meteor strike. While it's impossible to know the truth without help from Mr. Peabody and the Wayback Machine, we can be reasonably certain that it was death from above for all but the hardiest of the giant lizards.
The music industry as we've known it may soon be visited by its own set of dire threats from the heavens. Thursday's edition of The Wall Street Journal reported that industry bigwigs have become increasingly concerned with new devices from Sirius Satellite Radio
The Journal writes that the tussle between music labels and satrad is due to come to a head next year, when existing royalty agreements expire. Neither side shows signs of backing down. And that's good for, well, nobody.
Think about it. CD sales have fallen in four of the past five years, yet Apple
Not that the satrad duopoly has it any easier. For one, XM and Sirius are spending like mad to acquire new subscribers. Even market leader and Motley Fool Rule Breakers pick XM brought in only $10.69 per customer per month while shelling out $53 per new listener during the quarter ended in September, according to the recently filed 10-Q. Rising variable costs such as royalty fees could make that gulf even wider, thus delaying long-awaited profitability.
The truth is that the music biz and satellite radio need each other. Badly. But if the relationship goes sour, my money is on satrad. Why, you ask? Already, channels such as XM Cafe -- which made a recent appearance on Donald Trump's weekly ego boost, The Apprentice -- are proving that unknown artists can pull listeners. If that continues (and is there really any reason to believe it won't?), then the next big artist could be produced without a label.
In fact, the early signs of just such a revolution were revealed when upstart social networking site MySpace.com recently became a recording studio. That means the infrastructure that only the labels could once offer may become a whole lot less valuable than it once was. Whining about innovations that are hardly different from TiVo
Brrrrr! It's cold out there! Warm up with a cup of related Foolishness:
- Howard Stern is still turning heads for Sirius.
- Terrestrial radio is trying to catch up by going digital. Will it help?
(NYSE:CCU)is getting hipper.
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TiVo is a Motley Fool Stock Advisor recommendation. XM is a Motley Fool Rule Breakers pick. Take a 30-day trial to either on our dime. Or sign up for a year and get Stocks 2006 , which features our analysts' best picks for the year ahead, for free. Everything is backed by our airtight money-back guarantee. All you have to lose is the prospect of better returns.
Fool contributor Tim Beyers wonders when the iPod will broadcast satellite radio. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Fool profile . The Motley Fool has an ironclad disclosure policy .