Radio wave: satellite programming offers something for everyone

Custom Home, Sept-Oct, 2003 by Rebecca Day

With CDs and MP3s delivering homeowners' favorite tunes on demand, radio doesn't pop to mind as one of the more enticing features of a whole-house audio system. But thanks to a new crop of transportable satellite radio products, radio may re-emerge as one of the hot sources for multi-room music.

XM Satellite Radio and Sirius are the two competing services in the subscription-based radio market. Both use the space-saving streams of digital compression to deliver more than 100 channels of music, news, sports, and other programming to land-based receivers. From rebroadcasts of '30s and '40s-era radio dramas to the latest hip-hop and salsa music, digital satellite radio offers the most comprehensive swath of audio programming this side of the Internet.

The obvious outlet for such a broad array of audio programming is a car or truck, which is where the services have targeted much of their energy to date. But XM Radio's recent success during 2003 with the first portable satellite radio--Delphi's SKYFi--has demonstrated that consumers want access both inside and outside of the car.

"Most of the market was initially thought to be the factory-installed radio market," says Chance Patterson, vice president of corporate affairs at XM, "but what's happened is the majority of subscribers have come from retail and most of them are buying integration units that connect to existing stereos." Both companies have given their manufacturing clients license to sell removable modules that can travel from the car to the home or boat, where they can plug into an audio receiver just like any other source.

Satellite radio hasn't exactly stormed the market to date, but its proponents cite lack of awareness and promotion as part of initial growing pains. Sirius beamed to 68,000 subscribers mid-year and is expected to reach 300,000 by the end of the year. XM, with 600,000 subscribers in June, forecast 1.2 million subscribers by the end of fourth quarter.

But both companies have seen their stock rise this year, based on heady forecasts for the future of the market. Sirius' agreement with Hertz to supply 33 airport rental locations with satellite radios is expected to boost awareness, and XM reports that more cars will come equipped with XM this year to improve availability. XM will be available in 70 2004 models either as standard or a dealer option, and 65 models will have the Sirius option by fourth quarter 2003.

In an age when broadcast radio comes under increasing criticism for homogenization of sound, satellite radio offers something for everyone. Dedicated channels for unsigned bands, opera, music decades from the '40s through the '90s, folk, regional Mexican, African, and Caribbean music join subgenres of classical, rock, and jazz to give users a reason to have more than five or 10 presets. Both services also feature interviews and live recordings.

News and information stations include CNN, BBC, Fox, ABC, and Bloomberg News. ESPN, The Sporting News, NASCAR Radio, and Fox Sports deliver sports programming, and other channels come by way of Discovery, E! Entertainment, The Weather Channel, and even Playboy.

A monthly subscription to Sirius is $12.99. Sirius justifies the $3 premium over XM's $9.99 rate with commercial-free programming on the 60 music channels (40 channels of news, entertainment, and sports do have commercials). Most music channels on the XM network have commercials but they currently nibble about 2 minutes out of each hour compared with nearly 20 minutes per hour on some commercial broadcast stations. There are no commercials on venues such as the opera channel where a 40-minute piece needs to be played without interruption.

With some 100 channels to fill, there's a lot of overlap in the music and news genres in satellite radio. Decades music, rock, classical, country, rap, jazz, and Latin music, for example, are covered thoroughly by both services. A few Sirius exclusives include Turntablism, a channel devoted to DJs and their scratching and cutting acumen; OutQ, a channel targeted to the gay and lesbian community; and NPR news and feature programming. XM exclusives include audio books, programming from radio's golden days, Playboy, and others.

According to Patterson of XM, most listeners listen to fewer than five channels on a regular basis. "People get close to and feel familiarity with certain channels and then they become regulars, fans," he says. "They're engaged and they feel a connection."

It follows then that consumers would want to carry that connection out of the car and into the home. Kenwood, Audiovox, and Delphi were the first companies to deliver home "kits" to enable subscribers to hook up their satellite radio tuners to home receivers. The modules require a power outlet and connection to a free input (such as an auxiliary) on a receiver. Because the radio programming is delivered via satellite rather than via terrestrial transmitters, users also need a small antenna that requires line of sight to the satellite. In XM's case, the satellites are located above the Equator in line with the East and West coasts. The Sirius satellites are positioned higher in the sky over the Dakotas. Additional repeaters in urban locations retransmit the signal to compensate for blocked lines of sites caused by tall buildings, tunnels, and other obstructions.