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A revolution via satellite

December 5, 2004

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Two radio outfits alter landscape

Howard Stern helped announce his decision to move to Sirius in 2006 by giving away satellite radios at New York's Union Square. Sirius expects to have 1 million subscribers by year's end.

America's two satellite radio companies are convinced that tens of millions of Americans will pay for radio if it gives them more than they now get for nothing. XM and Sirius satellite radio still have major obstacles, starting with the fact most people don't know they exist. They also need to make potential customers feel comfortable with a different, higher-tech radio.

But soon enough, said longtime media analyst Robert Unmacht, most people will know about satellite radio and consider it no more intimidating than cable TV. The radios themselves will be affordable enough so the biggest issue will be whether listeners want the content.

And how enticing is it?

"On satellite, I count 26 music formats I like," said Unmacht. "On regular radio, I count five."

Or to put it another way: A New Yorker who had satellite radio now could hear country music, popular standards, big bands, '50s oldies, and dozens of shades of rock, dance, classical and Latin music heard only in small blips on free radio.

Satellite is also starting to roll out star power.

XM has signed young-guy talk hosts Opie and Anthony and National Public Radio veteran Bob Edwards. Starting next year, it will carry every Major League Baseball game.

Sirius gets Howard Stern by January 2006 and carries all National Football League games.

"Good programming will survive and win," said Jay Clark, executive vice president of programming for Sirius. "There's room for both terrestrial radio and two satellite services."

"If you create good radio," said Hugo Panero, chairman of XM, "people will come."

Each year satellite programming will get a little better, the radios cheaper, the technology flashier. So it's a personal judgment call whether, and when, to jump in.

"Satellite is still a work in progress," said Unmacht. "The Sirius channels with real hosts, like Meg Griffin's, are terrific. But some just play music with an occasional joke over the intros. That's not the way you make radio a companion."

XM's '50s channel has a great range of music, from deep rockabilly and blues to the hits. "Hank's Place," XM's classic country channel, has a much narrower playlist.

Some channels sound just like "regular radio," with jocks. Others are jukeboxes. Both services are commercial-free on ­music channels, though not elsewhere.

Many of the early satellite subscribers, it turns out, are in their 40s and 50s, which Unmacht said isn't surprising.

"As terrestrial radio goes after younger listeners," he said, "those are the age groups it is increasingly disenfranchising."

That group can also afford another electronic toy. Satellite costs $9.99 a month for XM and $12.95 for Sirius, and the radio itself can run $100-$500. Both Sirius and XM now offer boom boxes and XM is about to roll out the first Walkman-style portable, which will run $350. That will come down.

New Yorkers mulling satellite should also consider the reception issue. Satellite signals, coming down from space, have more trouble penetrating obstacles like buildings or leafy trees than traditional radio transmissions.

XM and Sirius figured their primary initial market would be vehicles, so the in-home and portable technology is still being worked out. If you're deep inside a New York building, you may not get the signal unless you can snake the antenna to a roof or window. Both companies downplay the issue but admit it's a factor.

In the long term, said Unmacht, the technology will work itself out, just as he thinks the radio business will sort itself out.

Terrestrial radio will continue to do fine, he said, because it can offer a local, immediate presence that satellite cannot.

And satellite can offer popular standards, unsigned rock bands, uncensored rap, BBC World News and an Elvis channel.

Sounding out the differences between XM & Sirius

COST

XM: $9.99 a month (premium channels including Opie & Anthony are extra)

Sirius: $12.95 a month (no ­premium channels yet)

CHANNELS

XM: 68 music, 33 sports, talk and entertainment

Sirius: 65 music, 46 sports, talk and entertainment

SUBSCRIBERS

XM: 2.7 million, projecting 3.1 million by year's end

Sirius: 800,000, projecting 1 million by year's end

SPORTS

XM: NASCAR, Major League Baseball, college football and basketball

Sirius: National Football League, National Hockey League, college football, NCAA Final Four.

STARS

XM: Opie and Anthony, Bob ­Edwards, Jonathan Schwartz

Sirius: Howard Stern, Little ­Steven, Meg Griffin

UNIQUE CHANNELS

XM: Unsigned Bands; BBC World News; Playboy Channel (premium)

Sirius: OutQ (gay and lesbian); ­Sirius Patriot (conservative ­values); '80s Hair Bands; All Elvis

MOST INTERESTING LIFESTYLE AFFILIATION

XM: Starbucks

Sirius: Eminem

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