As I reported here some time ago, Opie and Anthony and XM Satellite Radio have been in talks with CBS' radio division to bring the duo (and third crew member Jim Norton) back to terrestrial radio. Now, as of April 21, 2006, it looks like the rumors were true and the deal is basically final.

The new Opie and Anthony Show appears to be an unprecedented arrangement. The current show runs from 7 AM to 11 AM on XM channel 202. In the future, the show will be three hours on commercial radio, with an additional two hours that can only be heard on XM. For satellite subscribers, the new show will be five total uncensored hours. Opie and Anthony will reportedly be permitted to talk about XM on traditional radio over the span of their two year contract.

The deal hasn't officially been announced yet, and already the detractors are coming out of the woodwork.

Rick Aristotle Munarriz says at The Motley Fool:

XM needs to focus on building a better moat, and that means more exclusive content. It had no choice but to share Oprah Winfrey with the larger television audience, but Opie & Anthony are a different case entirely. Sharing the risks devalues the product when something so much more than a free sample at a mall food court is being dispensed. Why lend a hand to a competitor slowly sinking in quicksand? If it isn't a fair trade, don't you dare sign on that dotted line, XM.

I am looking at this deal as something completely different. I think XM is tipping their hand as to what their greater business strategy is going to be. While satellite radio is a cool thing because of the technology, it might also be the company's greatest weakness. Satellite radio is harder to use than regular radio. The signals and equipment have improved over time, but it isn't yet where it needs to be. We all know this.

The satellite radio subscribers are still the early adopters at this point. People with satellite radio are people in remote parts of the country with little radio choice, or hardcore radio fans who want to pay for commercial free and uncensored entertainment. Your casual radio listeners and the iPod generation aren't going to rush to sign up at this point. This really puts a cap on the number of potential subscribers in the early portions of this business cycle.

Also, with technology the way it is these days, who is to say that Satellite is going to be the dominant technology over time? There are tons of competitors that are just an innovation away from entering the market with at least the possibility of creating a much more effective broadcasting standard.