Case Detail

Case Summary

Satellite Radio: An Industry Case Study

Case Number: 5-206-255, Year Published: 2006

HBS Number: KEL203

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Authors: Nabil Al-Najjar; Dershan Desai; Steven Hallaway

Key Concepts

Switching Cost, Lock-In, Bidding for Content, Satellite Radio

Abstract

Radio broadcasting is characterized by diffused taste for programming and highly fragmented supply of content. Satellite radio is a major technological breakthrough that promises to reshape this industry by, among other things, satisfying a greater diversity in tastes and promoting greater variety in content provision. A major issue is that the economies of scale are such that it is unlikely for more than a few (currently, just two) providers to operate in this market due to the considerable infrastructure and content costs.

Number of Pages: 13

Extended Case Information

Teaching Areas: Economics, Strategy

Geographic: United States

Industry: Satellite Radio, Communications

Organization Name: XM Radio and Sirius

Decision Maker Position: VP Business Strategy

Decision Maker Gender: Female

Year of Case: 2006