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Radio gets Sirius
By DAVE GUSSOW Glen Wheeler finds himself behind the wheel more these days. Friends want him to drive when they go places, and he doesn't mind a bit. He just loves his satellite radio. "The only thing that has disappointed me is that I don't have it in my other car," said Wheeler, 36, a computer programmer in Tampa. Wheeler was one of the first to sign up for XM Satellite Radio when it began service in November. Consumers will have a second choice starting today when Sirius Satellite Radio becomes available in the Tampa Bay area and across Florida. The services are similar, offering 100 channels of radio with music, news, sports, talk and specialty programming. Both promise CD quality sound, with dozens of ad-free channels. Both require special car radios and antennas to receive the satellite signals. Both have deals with auto manufacturers that have said they will offer the radios in certain car models. But XM (www.xmradio.com) has several advantages: It charges $9.99 a month for its service, while Sirius' fee is $12.95. XM started service nationally in November; with today's rollout, Sirius (www.siriusradio.com) will be in 37 states, with a target to go nationwide by July 1. XM's early start let it sign up 76,000 subscribers by the end of March, and it has told Wall Street it will meet its goal of 130,000 or more for the second quarter. Sirius, which started service in only four cities in late winter, reported a paltry 412 subscribers at the end of the first quarter, a number the company calls "meaningless." "With only two players and the huge market potential, we don't think being second out of the door is any great disadvantage," said Jim Collins, Sirius' vice president of corporate communications. "People are interested in satellite radio and the benefits the programming can provide. We think it bodes well for us that they're doing well." Collins points to the competition in the satellite TV market, where DirecTV came out first, but Echostar became the market leader. And he discounts the higher rate Sirius charges. "We believe people will pay the difference for commercial-free music," said Collins, noting that some of XM's music channels run ads. Both services run commercials on news and talk channels. Sirius' expansion doesn't faze XM, which argues the competition will only increase consumer interest. "There's growth for the whole category," said Ildiko Novak, an XM spokeswoman. While many analysts are bullish about satellite radio's prospects, not everyone sees room for two companies. Baba Shetty, an analyst for Forrester Research in Cambridge, Mass., is among the doubters. He said sales will really heat up when auto companies, such as General Motors for XM and Ford and Chrysler for Sirius, start offering the radios in new car models. But he also says XM's early start and marketing may prove to be the critical difference between the companies. "The real insurmountable lead is not the consumers who have already bought," he said. "It's the consumer who thinks XM is satellite radio. That lead may in fact turn out to be very difficult for Sirius to overcome." Shetty also says the $3 a month rate difference will be more significant than Sirius indicates. "Yes, it's only $3," he said. "But it's a big perceptual difference when (consumers are) deciding whether to add another monthly bill or not." For now, satellite radio is mostly for cars, though XM has a radio that can be taken from the dashboard to a docking station in a house, and Sirius has a Jensen boom box in the works. Here's how the services work: Radio signals go from Sirius' studios in New York and XM's in Washington to stationary satellites positioned to cover the continental United States. The signals go from the satellites to ground repeaters that retransmit the signal. Listeners can tune in to one channel and keep listening to it while driving across the country. "Clouds and rain have no effect on the satellite service," said Wheeler, the Tampa subscriber. He said he has lost the signal only in tall parking garages and while dropping people off at Tampa International Airport. Wheeler spent about $300 for his radio and antenna, installing them himself in his 1997 Volvo, which took about an hour. The radios start at about $200, and antennas range from $30 to $70, both available at most electronics stores. (Another advantage for XM: Wal-Mart carries its radios). The radios also can play AM and FM stations for those who want to keep in touch with local news and personalities. Installation and a small one-time activation fee of about $15 will take startup costs to about $400. Finding the right channel while driving has not been a problem, says Wheeler, because it's easy to learn the categories and choose what you want. Wheeler said he most enjoys getting a variety of music that's not available on today's tightly programmed broadcast stations. "When it comes to local radio stations, there's no doubt about it, you're at their mercy," said Wheeler. "This really is the difference." -- Dave Gussow can be reached at gussow@sptimes.com or (727) 445-4228.
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From the Times Business report
From the AP
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