By DAVE GUSSOW
© St. Petersburg Times, published January 22, 2001
XM Satellite Radio is counting on an aptly named pair of satellites in a new race that will take radio listening beyond AM and FM. And beyond free.
By summer, the satellites are expected to beam 100 channels of music, talk, news and specialty programming, competing with a similar service from Sirius Satellite Radio.
Each company promises offerings not available on commercial radio, sharp digital quality, at least some advertising-free channels and coast-to-coast coverage.
No longer will people have to endure fading stations and static when they drive long distances, the companies say. Now they can have a favorite channel wherever they go.
Consumers will have to buy new car radios that are expected to start at about $250 and pay a $9.95 monthly fee. But each company thinks people will be willing to spend the money.
"People will pay for quality," said Hugh Panero, XM's president and chief executive. "Radio is to the car what TV is to the home."
He and others likened the situation to the start of cable TV, when skeptics predicted people wouldn't pay for something they could get for free.
Both XM and Sirius have well-known corporate partners betting billions of dollars that the concept of pay radio works. For XM, those include General Motors, Clear Channel Communications (which owns 900 traditional radio stations) and DirecTV, the satellite TV service. Sirius' partners include Ford, Volvo and DaimlerChrysler.
Sirius (www.siriusradio.com) seems to be a little ahead at this point. It has three satellites in orbit and is testing its system, said Joe Capobianco, senior vice president of content. The launch of XM's (www.xmradio.com) satellite named Roll was scheduled for Jan. 8 but was delayed until Feb. 28 because of a minor technical glitch. Rock will follow in April. They are part of a $750-million investment the company has made in satellites and their launches.
Here's how the services will work: Sirius built its studios in New York, XM in Washington. Radio signals will go from a ground antenna to the satellites, which will be in stationary orbits positioned for coverage of the continental United States.
Because satellite signals need a direct line to be received, each company also has set up a system of ground repeaters to retransmit the signal to ensure that it can be received in mountainous areas, cities with tall buildings and other places where obstructions could occur. As for weather, XM says rain and clouds shouldn't affect its signals.
XM's programming will be stored on IBM computers capable of holding the equivalent of 2-million compact discs, according to John Patrick, IBM's vice president of Internet technology. It includes a backup system that will prevent outages.
Consumer electronics companies such as Alpine, Clarion, Pioneer and Sony will be producing new lines of satellite car radios that will be available at retail chains such as Best Buy, Circuit City and Sears. And automakers may start offering the radios in 2002 models.
The new radios also will receive traditional AM and FM signals so listeners can continue to tune into local personalities, news, traffic and weather.
Cars won't need a dish on the roof to receive the satellite signal but will need a special antenna. While the services initially are aimed at vehicles, Sony will have one model for XM that can be moved from the car to the house, working through a special cradle.
Sirius says it can be profitable with subscription fees paying the way. It says it needs to reach 1 percent of registered cars and light trucks to break even. XM won't say how many subscribers it needs to break even, but advertising revenue plays an important role in its plan. "It's a business that's big enough for both of us," Panero said.
The Yankee Group in Boston predicts 1-million satellite radios will be sold within the first year and up to 20-million car radios could be tuning in programming via satellite by 2005.
"It's compelling, yet it's easy for people to understand," said Ryan Jones, an entertainment and media analyst with Yankee.
Ask each company what sets it apart from the other, and you hear similar answers: Look at the content.
On programming, each is lining up special content partners: Among XM's offerings will be NASCAR, Sesame Street, CNN/Sports Illustrated and the Hispanic Broadcast Corp. Sirius has the A&E Television Networks, Comedy World, the Weather Channel and Sports Byline USA.
Music choices will have traditional fare, such as Top 40, country and oldies, but also go into genres not readily available on broadcast radio, such as reggae, world music, new age and Broadway.
"Radio hasn't changed in 30 years," Sirius' Capobianco said. "It exists to deliver listeners to advertisers. We flip that on its head because we are focused on the subscriber."
One significant difference: XM promises 15 ad-free music channels; Sirius, 50.
"That's our promise and we're keeping it," Capobianco said. "We think that sets us apart."
XM says its lineup could evolve as it sees listenership surveys, but it is committed to a diverse lineup. "We have an open-arms programming strategy," Panero said.
Both companies said they don't expect the number of channels to distract drivers, although some of the less expensive radios will permit pre-setting only 12 channels.
XM expects to start a $100-million ad campaign as the public rollout of the service nears, and Panero doesn't see satellite radio damaging commercial stations. "All we'll do is take a great medium and add another tier of entertainment options," he said.
Traditional broadcasters apparently agree. Dennis Wharton of the National Association of Broadcasters said most people want local information on the radio, such as traffic reports, something that a national service can't provide.
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- Information from Times wires was used in this report. Contact Dave Gussow at email@example.com or (727) 445-4228.
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Around the digital dial
Here are some examples of the programming satellite radio services say they will offer:
Sirius Satellite Radio
News, Sports, Entertainment
XM Satellite Radio
News, Sports, Entertainment
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A time line of radio history
1895: Italian inventor Guglielmo Marconi sends radio signals about a mile through the air.
1916: David Sarnoff first proposes the "radio music box," or commercially marketed radio receiver. He later becomes manager of the newly formed Radio Corporation of America, and in 1926 forms the National Broadcasting Co.
1919: First football game broadcast in Texas. Shortwave radio developed.
1920: Radio stations WWJ of Detroit and KDKA of Pittsburgh become the first commercial radio stations.
1921: First baseball game broadcast in Pittsburgh.
1928: Amos 'n' Andy, radio's first serial, premieres in Chicago. Picked up by NBC the following year, it was likely the most successful radio show in history, heard every week by a third of the nation.
1930: The first soap opera, Painted Dreams, the story of kindly Mother Moynihan and her boarding house, is broadcast in Chicago. The soap opera becomes a national obsession.
1933: President Franklin Roosevelt broadcasts the first of his fireside chats.
1934: The Telecommunications Act creates the Federal Communications Commission.
1935: Your Hit Parade debuts, featuring a countdown of the top tunes of the week.
1937: The German airship Hindenburg burns and crashes in New Jersey, vividly announced by a sobbing Herbert Morrison. It becomes one of the most famous audio moments of the 20th century.
1938: H.G. Wells' The War of the Worlds is broadcast, leading thousands to believe that an interplanetary invasion started in New Jersey and New York.
1939: Edwin Armstrong builds the nation's first FM radio station.
1947: Scientists at the Bell Telephone Laboratories develop the transistor, a longer-lasting and less bulky substitute for vacuum tubes.
1953: WNJR in Newark, N.J., puts Alan Freed on the air. He creates the modern disc jockey style, paving the way for rock 'n' roll disc jockeys such as Jocko Henderson, Wolfman Jack and Murray the K.
1960s: Stereophonic radio broadcasting begins.
1964: Controversial Los Angeles broadcaster Joe Pyne pioneers the belligerent, shouting-match style of talk radio.
1971: National Public Radio broadcasts its first program, live coverage of Senate deliberations on the Vietnam War.
1973: A New York radio station broadcasts a George Carlin comedy routine called "Filthy Words," spurring a lawsuit. Five years later the U.S. Supreme Court rules the comedian has aptly described the words that don't belong on the public airways.
1982: AM radio stations begin broadcasting in stereo.
1988: Rush Limbaugh begins his syndicated talk show with 50 stations, ushering in the era of talk radio and creating a flurry of conservative copycats.
1995: Infinity Broadcasting pays the government $1.7-million, the largest amount a broadcaster has ever paid in an obscenity case, to settle indecency complaints against shock jock Howard Stern.
1998: The world's first commercial digital audio broadcasting service begins in the United Kingdom.
2001: Satellite radio to begin.
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Sources: Billboard, World Book Encyclopedia, Brittanica.com; compiled by Times news researcher Kitty Bennett.
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