Saturday, December 17, 2005

Satellite Radio vs the iPod

I've been thinking about getting a satellite radio for myself for Christmas, but I wanted to compare the TCO (total cost of ownership) vs an ipod.

Satellite Radio
Pros: Always changing content, always new content, no time wasted finding and downloading songs, never have to buy songs, 100's of channels, unique content like Howard Stern on Sirius live content like sports (NFL)
cons: monthly subscription fee, large form factor receivers

ipod
pros: listen to what you want when you want, small receivers, very nice looking, can hold other data such as pictures
cons: have to find songs, get them from your computer to your ipod, purchase songs or get them illegally, stale content, expensive units, expensive songs

So here's the cost comparison assuming you are downloading songs legally:

Satellite Radio: $100 for receiver (can get them for much cheaper if you look around) plus $12.99 per month subscription fee. That would be $255.88 for first year, 155.88 each year after.

iPod: $299 for unit plus $.99 per song
Lets say you want 50 songs to start, $49.50, so starting price is $348.50.

Now you easily tire of your fifty songs playing over and over, so you buy say a new album each month for $9.99. So the first year with the ipod, you're cost is $468.38 plus $119.88 each year after.


UnitAdditional YearFirst YearSecond YearThird Year
Satellite
$100.00
$155.88
$255.88
$411.76
$567.64
iPod
$299.00
$119.88
$418.88
$538.76
$658.64




With the unlimited songs and all the variety, the value proposition of the satellite radio is much better than the ipod. And as you can see in the table above, satellite radio is actually significantly cheaper than owning an iPod.

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