{Herald Palladium} Sat. radio coming soon to a car near you

[danielbutler]

http://www.heraldpalladium.com/articles/2004/02/29/news/news1.txt

Satellite radio coming soon to a car near you

By TODD R. BROWN / H-P Copy Editor

Imagine driving cross-country and still being able to listen to a Lions or Cubs game.

Or consider having a hundred channels to choose from on your stereo -- from music and talk to sports, traffic and weather -- all commercial-free, 24 hours a day and in digital sound.
When such conglomerates as ClearChannel Communications are buying up radio stations and homogenizing their content nationally, having that freedom of choice might seem like a faraway dream.

But technophiles up on the latest trends know these scenarios already are a reality thanks to two companies, XM Satellite Radio and Sirius Satellite Radio, which beam continuous streams of audio to nearly 1.75 million receivers in car and home stereos for $10 to $13 per month.

"I've actually got Sirius in my own vehicle, and I've got quite a random channel listing," said Tim Burgess, an installer for Sound Creations in Benton Harbor. "This area's kind of bad for radio stations. We've got just a few local stations, mostly country," he said and laughed.

Burgess said he enjoys the listening choices Sirius provides, from several R&B and hip-hop stations to specific '60s, '70s and '80s classic rock channels and alternative music streams. "If you're in your car any great deal of time, it's definitely worth it," he said.


Guy Arthur, owner of Tri County Audio in south St. Joseph, agreed. Regarding XM, he said, "I think it's dynamite. For the older people, you can go back to the 1940s -- they've got a station with 1940s music on it.

"If you like blues or the old Southern jazz, then you can pick up that on a separate station and listen to it 24 hours a day."

Bob Richards, spokesman for Ann Arbor-based Skywaves Research, which monitors the satellite radio industry, echoed those sentiments.

"One of my favorites on XM is a station called The Village, which broadcasts folk music of all kinds," he said. "And then there's another one right next to it which is a bluegrass station. That's all you hear on that, and it's the best of it, and it's quite a variety."

Washington, D.C.-based XM took its service live in November 2001. As of mid-February, the company boasted 1.5 million subscribers, spokesman Allen Goldberg said.

Customers pay $10 per month for the service, which features more than 120 content streams, including 68 music stations in a wide variety of genres.

XM in March will launch exclusive, 24-hour traffic and weather stations for the 21 largest metropolitan areas in the United States, including Chicago and Detroit.

New York-based Sirius went live in July 2002. By Dec. 31 it had 261,000 subscribers who, starting last weekend, can pay for a year's service at $10 per month, vs. the month-to-month rate of $13, spokesman Ron Rodrigues said.

Listeners are offered more than 100 audio streams, including 61 music channels, some DJ'd by such celebrities as hip-hop pioneer Grandmaster Flash, ex-New York Doll David Johansen (alter ego Buster Poindexter) and Broadway pianist Michael Feinstein.

Earlier this month Sirius made a deal with the Dish Network and Radio Shack to recruit customers and also signed a seven-year agreement to broadcast NFL games beginning in August. The company already has similar deals with the NBA and the NHL.

Neither company has yet to operate in the black (Sirius earlier this month announced the sale of another $250 million in bonds to raise more money), though their spokesmen predict both will break even in 2005.

Eager rivals, big goals

With just two contenders in the budding satellite radio industry, it might seem consumers have an easy choice. The two companies are eager rivals, though, and their differences give each a niche in the marketplace.

Goldberg said XM predicts it will have 2.8 million subscribers by the end of this year and 20 million by 2010, while Rodrigues said Sirius envisions 1 million subscribers by the end of the year and double that by the end of 2005 -- ambitious goals, but apparently not impossible ones for satellite radio sellers.

"It's the second-fastest-growing consumer electronics item, second to the DVD player," Rodrigues said.

Furthermore, he said, Sirius has an exclusive agreement to install its receivers as options in Ford, BMW and DaimlerChrysler cars, while it works at the factory and dealer level with Volkswagen and Nissan. The costs of Sirius' car radios range from $300 to $700, plus installation.

There will be a special-edition Volkswagen with standard Sirius service later this year, the same kind of set-up the company implemented for a special edition 2003 PT Chrysler, Rodrigues said.

XM installs its radios as standard on General Motors, Honda and Acura cars, while XM is a dealer option on Toyota, Nissan, Volkswagen and Audi cars. XM's price range for car radios matches that of Sirius: from $300 to $700, plus installation.

Either kind of radio can be custom-installed in most cars as well by such audio companies as Sound Creations and Tri County Audio.

The Best Buy chain sells a variety of plug-and-play satellite radio units for home and car use, including Kenwood, Audiovox and JVC models with Sirius service, for about $149, Rodrigues said.

Goldberg said XM receiver-equipped radios retail for about $100 for the Delphi SKYfi model, which switches easily between home and car use, and $350 and more for Pioneer, Sony and Alpine models.

He also said a "kind of overlooked product" that is "the most affordable satellite radio on the market" is the XM PCR, which sells for $49.95 and lets PC users listen to XM by plugging into a USB port and without going through the Internet.

Burgess said Sound Creations installs Kenwood and Pioneer receivers for home and car use with either XM or Sirius tuners priced at $100 to $275, plus $40 for installation. Arthur said Tri County specializes in $349 Alpine receivers with XM tuners built in for cars.

More than a jukebox

Streaming satellite radio might seem similar to nonprofit and college radio stations that broadcast via the Internet commercial-free, and to such Web sites as Radio@NetscapePlus powered by Spinner, which offers a variety of free and commercial-less music streams to PC users.

"There are some similarites between some of the online music services and what we do," Sirius' Rodrigues said. "The difference is ... we're more an entertainment experience.

"Spinner is basically a jukebox. We've discovered, and many of us are from the radio industry ... people truly are interested in hearing disc jockeys and hearing them talk about the records and where the artists might be playing that night."

XM's Goldberg agreed, explaining the company's DJs bring to the satellite medium a passion for music from their FM and AM radio experience. He said XM's reggae program director is from Jamaica, while its heavy metal director sports tattooes and long hair. "Our DJs are just kind of the real thing," he said.

In technical terms both services are similar. Both use satellites that transmit data to repeater towers, similar to how mobile phone networks transmit their signals. XM even has repeater technology in tunnels in the United States, Arthur said.

"You can go coast to coast, even if you're in a tunnel, and still be able to pick up your signal," he said. "It really doesn't matter where you go."

Rodrigues said Sirius uses variable bandwidth for its channels, so a song with particularly sophisticated orchestration can use increased bandwidth for its transmission, while less-dense data channels can yield bandwidth to more demanding streams.

Neither company is ready to offer satellite video, but both said they are developing the technology to broadcast images to video receivers. Rodrigues said Sirius might offer the service as early as 2005. "But there's really a long time between now and then," he said, "and there's a lot to get done before we can offer video."

XM's Goldberg said, "We've been able to demonstrate video, but we're interested in finding a viable business plan" before offering it to consumers. "We want to be sure the consumers want and need it."

Price-cutting may spur demand

Both Arthur, at Tri County Audio, and Burgess, at Sound Creations, said there is not yet much demand in Southwest Michigan for satellite radio.

"Older people probably go more ... for the satellite radio, but the young guys seem to go more for CDs and for the local stations," Arthur said.

But Sirius' monthly rate reduction, plus declining prices of satellite radio receiver units, may help raise demand in the area.

"When they first came out, you first had to buy a $200 radio and a couple-hundred-dollar package in order to get it," Burgess said. "And now pretty much if you buy the radio, you get the tuner for free. That cut the price in about half."

Richards, of Skywaves Research, said, "This is very high quality radio, and it's a bargain at the ($10 per month) price. Both XM and Sirius have a substantial range of music available already."

He added that while the companies don't offer the kind of community-interest content found on nonprofit and college stations, Sirius does offers three channels associated with National Public Radio and Public Radio International.

"Satellite radio is so good in its content ... and the music is so good, I find that I am much less upset by a traffic jam than I used to be because there's something interesting to listen to. You can find almost anything that you want."

On the Web:

Sirius Satellite Radio: http://www.siriusradio.com
XM Satellite Radio: http://www.xmradio.com
Skywaves Research: http://www.skywavesresearch.com

[XM in Dallas]

Nice article overall, but they really blew it on this paragraph: