Internet casts shadow on satellite video broadcasting prospects

North American satellite radio service providers Sirius Satellite Radio and XM radio have announced plans to expand their bandwidth, and Sirius said it plans to provide video broadcasting services to the vehicle.

But ABI Research senior analyst Dan Benjamin cautions that if automotive broadcast video services arrive in 2006, the impact may not be as profound as the satellite radio firms expect. "Even with bandwidth expansion, the satellite radio firms can only offer a few channels of lower-quality video without sacrificing audio content and quality. Video-compatible radios will also be considerably more expensive than existing devices, not to mention the competition, namely from satellite TV and wireless Internet."

Benjamin said satellite TV from DirecTV and Dish Network is already available in the vehicle from firms such as KVH Industries and RaySat, but he added that the devices “are still hamstrung by high prices and bulky antennas,” which limits their potential market to SUVs and larger vehicles. "Don't underestimate Internet from wireless carriers,” said Benjamin. “When 3G services arrive, there will be enough bandwidth for video at comparable or better quality than the satellite radio providers. Unlike satellite radio, which will be limited to broadcasting, the Internet can provide content on-demand."