Cable television has shown that specialization does have appeal, and people are willing to pay for it. The proof is in home shopping networks, food channels, and history channels, as well as CNN, C-SPAN, and ESPN.
Blum is in the camp that believes satellite radio will not have a major financial impact on most of the stations in San Francisco. If anything, he figures that, rather than stealing listeners from existing stations, CD Radio will attract customers who now eschew radio in their cars in favor of CDs or cassettes.
Besides, Blum argues, San Francisco's radio offerings are already fairly diverse. Satellite radio will undoubtedly peck around the edges of traditional broadcasters, he says, but it shouldn't drive anyone out of business.
"You're already looking at a diverse and well-rounded offering," Blum says. "Now, if you can't get reggae in San Francisco but you can get it off CD Radio, then, yeah, that might bleed away people at the margins."
Alex DeMers, a Philadelphia-based media consultant, says satellite radio will mostly draw in the "disenfranchised audience." But over time, he says, satellite radio could become one of those insidious forces that worms its way into people's daily routine. Kids raised with satellite radio will embrace it the way their parents grew up with cable, and not find it at all odd to pay for radio service.
"Any sort of new technology diffuses in a pretty predictable pattern," says Atlanta-based Tom Barnes. "It will start out with the people who are gadget freaks, transition into hard-core music fans, and then the tale will be told."
KGO Operations Director Jack Swanson, for one, doesn't expect the tale of satellite radio to be a particularly successful one. San Francisco is so well-served by all the existing stations, he contends, that there's little reason for listeners to succumb to the newest technological siren. "The average commute in this town is about 30 minutes," Swanson says. "How many radio stations are you going to surf through in 30 minutes? I just don't see the demand. There might be a polka channel that some Wisconsin refugees might enjoy that they can't get in this market, but if you can already listen to 50 radio stations, what do you need another 100 for?"
That's an easy position for news/talk stations like KGO to stake out, though, since they are undoubtedly the least vulnerable to satellite radio's arrival. By definition, CD Radio's stations will be national, with no local news or weather, traffic updates, or interviews with dejected coaches after the Raiders blow another game.
"A local station has an advantage over distant signals simply because that local station is talking about things that are going on in the community," says Blum. "Local stations are always going to have an advantage as long as they provide that local service."
But the sheer reach of the first truly national radio system is not easily dismissed. All CD Radio has to do, analysts say, is lure in or cultivate a major radio personality, and its service will practically sell itself.
"If you look at the growth of any medium, it's been star power," says consultant DeMers. "Milton Berle comes along, and all of a sudden you gotta have a TV."
Either CD Radio or American Mobile Radio would probably pay dearly to attract a superstar, DeMers says, and somebody might be willing to jump. After all, look what CNN did for Larry King. "Frankly, if I'm Howard Sterns' agent or Rush Limbaugh's agent I'm talking to one of these [satellite radio companies] about getting on board," says DeMers.
Margolese demurs when asked if CD Radio is pursuing potential drawing cards like Stern or Limbaugh. "If the demand were there it would end up that way," he says.
And demand is what ultimately matters. After a lifetime with only two types of radio to choose between, listeners will soon have a third. Even curmudgeonly Swanson allows that the potential is too big to be ignored.
"The truth is, who knows? We really don't know," he says. "The key to me is less in the technology and more in the programming. Is there something really good that hasn't been done yet that needs to be done? If there is, they're going to be successful. If this does become a great technology, then they may be my new boss.
