Thread: Muzak Files for Bankruptcy

Muzak has been on its way out ever since Sirius and XM decided to roll out their service since they are not competitive.



They first of all charge a few hundred dollars for the installation and then want $30+ per month for the service. With Sirius and XM, at the most there is about $100 for an outside antenna kit, and then the service is around $12/mo.

If they go away thats fine with me, I have gotten screwed by them too many times when I went to setup a commercial DISH account for TV and was told I could't because the customer already subscribed to Muzak and was considered a previous customer and would not qualify for new customer promotions and commissions. Try explaining to a customer they can't get Free equipment because they have a Muzak account, which really has nothing to do with Dish besides use the same equipment.

Put me in the ho-hmm about sat. radio group. I drive about 45 mins a day total and the local talk radio suits me fine for that short duration. I rarely take any lengthy trips or travel out of market where I need to channel surf. When the radio doesn't suit, the CD changer is always loaded and ready to take over. I don't listen to anything at work now and at home the other forms of entertainment are all I need. I worked with a guy for a while who always had his XM playing on the jobsites. I wasn't impressed either way. I just used my headphones and listened to the local stuff. I don't think I'd adopt sat. radio at this point even if it had no subscription cost. If I were to buy a new vehicle with a receiver and a free year of service that could change. But that's certainly no reason (in my mind) to purchase a vehicle. No-doubt some make the investment to keep Stern and others in their lives. I don't feel that way about any personality, but that's just me.

I'm a techno nut to a large extent and an early adopter of many things. For some reason sat. radio never caught on for me, particularly with the monthly fee.

What is the penetration rate? How much churn is there? $2B per year revenue seems significant, but what does it cost the providers to stay in business?

I always wondered what the musicians, who played on Muzak, looked like. Where they in tuxes? Jeans? And what about that damn flute player? He was all over everything!

The problem with Sirius / XM Radio is they refuse to change.

I can’t speak so much for Muzak because providing music to stores and other commercial entities is different then selling it to a home consumer.

That being said, if I was in charge at Sirius / XM Radio the first thing I would do is rethink things.

• Make smaller packages and make them cheap (Sports Only / Music Only / News Only. Etc.) and when I say cheap I mean like 1 or 2 dollars a month.
• Form partnerships with the big names in terrestrial radio. WNBC, WABC, WCCO, WCBS any one willing to pay. Offer to lease them a channel, or more, with the following understanding. The channel has to be FTA. Sirius / XM Radio simply needs to figure out how much a “channel” should be worth in order to be profitable while being able to give away the service. Land based broadcasters would like it because they could offer coast to cost coverage. Think of the die hard people that listen to WCCO AM on .830 AM. During the night it is coast to cost. But in the day its only like 250 miles.

Originally Posted by ikki

• Make smaller packages and make them cheap (Sports Only / Music Only / News Only. Etc.) and when I say cheap I mean like 1 or 2 dollars a month.

A customer paying $1 or $2 a month isn't going to cover the overhead billing / customer service / tech support costs, not to mention the fixed costs of the satellites and cost of programming.

Originally Posted by Claude Greiner

They first of all charge a few hundred dollars for the installation and then want $30+ per month for the service. With Sirius and XM, at the most there is about $100 for an outside antenna kit, and then the service is around $12/mo.

There's a major difference here, and that is licensing. You are not allowed to play standard commercial music from any source, be it MP3, CD, terrestrial radio, satellite, etc. without paying fees to BMI, ASCAP, etc. or using a service which pays the proper fees for you and charges accordingly. This is where Muzak comes in.

Sirius has an offering called
Sirius Music for Business

which includes the licensing and starts at $28/mo. These packages are what you should be comparing with, not the personal use plans.

edit: Sirius' Business FAQ explains it quite well:

Why do I have to pay more for a business subscription?
Use of music in a business requires the payment of royalties to ASCAP, BMI and SESAC, the organizations that represent the music copyright holders. These royalties are included in a commercial subscription. For more information on these royalties please visit
www.ascap.com

,
www.bmi.com

and
www.sesac.com


.

Do I have to pay for music licenses when I have already paid for the DJ, band or purchased the records, discs or tapes to be played in my establishment?
The Copyright Law of the United States, states that the owner or operator of the establishment where the music is being played is responsible for obtaining the required authorization. The compensation you provide to a performer such as a DJ or band does not relieve you of this obligation. When you purchase a record, tape, compact disc, DVD or similar product you are granted the authorization for a non-public performance, such as in your home or car. There is no public performance right attached to the sale of these products and if you decide to play this music in your establishment you are required to obtain authorization from the copyright owner or their representative.

I wonder what a 19" B&W TV set is worth today? Would it increase in value, like early TVs and radios?

I do have a sub to sirius/xm with two radios. One radio is on my ZX-10R Ninja, the other radio is in my truck (one of those little radar detector looking SV1's). I do not subscribe to tv services of any kind. I have digital over the air /HD, FTA satellite only.
couldn't be happier. I was in the same situation where the few channels i did want, I had to sub to a huge package that cost more than the few channels i wanted was really worth IMO.

I do however hope that muzak and sirius/xm does not go out of business. They are a great asset to our country's commercial free music delivery for homes, businesses. Its kind of nice to drive from Charleston, WV to Nashville, TN and not have to search for a radio station. Plus I enjoy the lack of commercials (for now) until they add them one day.