murgirl: XM/cadillac and XM/Sony[edig?] for home:
Satellite Radio
No Static At All
by Alice Hill
Page 1: No commercials
It’s a fact we instinctively know without hearing any numbers: Commercial radio is mostly commercials. Two companies are betting the next generation of radio listeners are ready for something better—satellite radio, featuring hundreds of specialized channels, broadcasting in clear CD quality sound, minus the continual commercial interruptions.
Getting Serious
In 1997 the FCC granted licenses to New York’s Sirius Satellite Radio, and Washington DC’s XM, Inc. for a piece of the S-band spectrum—the segment approved by the FCC for satellite radio. Landing a license didn’t come cheap. Both companies ponied up a hefty $89 million apiece for the right to broadcast on this new frequency.
To raise the massive funding necessary to build and deploy satellites, Sirius and XM have partnered with a number of corporate heavyweights, including General Motors, DirectTV and DaimlerChrysler. To date, Sirius has launched three satellites, while XM launched its first satellite in early January, with a second going up in March. Between both companies, the price tag for the satellite portion alone has topped $3 billion.
You Have to Pay To Play
To make the venture a high-flying success, both Sirius and XM are betting that consumers will do the unthinkable: Pay $9.95 a month to listen to their car radios. As Dave Margolese, the founder of Sirius, put it: “TV is free, but 70 percent of consumers choose to pay for cable—and another 10 percent pay for satellite TV.” And while it’s true that consumers will pay for water and other items that were previously thought of as free, jumping to a paid version of radio will require some powerful programming.
Staffed by an expert in the genre (or a major content provider like NPR), a satellite classical station would feature live and recorded music as well as guest appearances and information 24 hours a day. This ability to segment even into obscure Celtic flute channels will give, according to Sirius and XM, a home for every listener. The listeners are there: Three-quarters of the U.S. population over 12 listens to the radio each day, and 90 percent of all commuters listen to as much as 50 minutes of car radio a day. It translates to a $50 billion business, which is why Sirius and XM are eager to grab your attention.
The Chips Are Down
The loose ends are radio chipset delays for Sirius, and no radios on the market yet for XM. XM is planning a massive $100 million campaign this summer to introduce its new radio in the 2002 Cadillac, and is also working on a radio with Sony that will slide into a docking station in your home so you can listen away from your car. Pricing has not been set. Expect to see XM radio in all upcoming GM cars and Sirius models in BMW, Ford, and DaimlerChrysler. By 2003 most cars should have a satellite option.
Digital audio in the home never caught on as a subscriber service until it was bundled with cable TV, and many analysts predict that satellite radio won’t become popular until it is included with your other car services. If it does take off, maybe we can kiss all that commercial noise goodbye.
AI
