Satellite Radio Is Ready to Go Live

0 Comments | Insight on the News, May 7, 2001 | by Catherine Edwards

What cable did for television, the creators of satellite radio say they will do for radio. Subscribers will get not only the AM/FM stations, but also programming from coast to coast.

During the last decade, talk radio grew exponentially. Radio hosts such as Rush Limbaugh and Dr. Laura Schlessinger began to reach millions of listeners. Other talk-radio personalities -- including Oliver North, Alan Keyes, Mike Reagan and Michael Medved -- found huge audiences, where just a decade earlier there only were a handful of talk-radio stations. Now there are 1,500, says Michael Harrison, editor of Talkers magazine.

But as the third millennium has dawned, so has a new format of radio with, perhaps, an even bigger market for a new generation of talkers: satellite radio. Starting this year it will provide coast-to-coast coverage and 100 channels of programming -- 50 talk stations and 50 music stations.

That means no more fumbling for the car-radio dial in traffic as signals fade. What cable did for television, the creators of satellite radio promise they will do for radio. For $9.95 a month, subscribers with a radio in the car can have their choice not only of AM and FM stations, but also of satellite programming.

"We look forward to being the mouthpiece of America," says Lee Abrams, chief programming officer for XM Satellite Radio Inc. "It is the ultimate place for a talk-show host to be. We have true national coverage, rather than the Swiss-cheese coverage that exists now across the country."

XM is one of two satellite-radio companies readying to go on the air with national programming. It chose as its headquarters a renovated printing plant in Northeast Washington, D.C., because radio itself is urban. Sirius Satellite Radio Inc., XM's competitor, is based in midtown Manhattan at Rockefeller Center. "We are the only company doing radio in Radio City," laughs Elana Sofko, director of talk/sales partners for Sirius.

Sirius will launch three satellites; XM two. In mid-March one of XM's satellites, named "Rock," was put into orbit. The other satellite, "Roll," will go up in May. Sirius is not far behind. Both companies will offer original talk programming, but neither has revealed the names of on-air personalities. Both have partnered with third-party news outfits.

XM has deals for channels with CSPAN, CNBC, BET/Radio One, Bloomberg News Radio, CNN, The News Hour with Jim Lehrer, NASCAR, the Weather Channel, Sporting News, Salem Radio, AP, USA Today and others. Sirius talk partnerships include National Public Radio (NPR), the Discovery Channel, the History Channel, CNBC, BBC World Service and three channels to cover all sports, including exclusive coverage of such special events as the Tour de France. A Sirius partnership with A&E will allow Biography fans to hear their favorite show as they drive, or listen to Pride and Prejudice and Horatio Hornblower in their cars.

The 50 music channels on both XM and Sirius will cover everything from classical to reggae. XM hired seasoned radio hand Abrams, credited with creating album-oriented rock and popularizing FM radio in the 1970s. They hope he can perform the same magic at XM. "We are in a digital age now, and it is time for radio's format to change -- something it has not done in 30 years since radio embraced FM and stereo sound," Abrams explains as he sits in his office with walls decorated with gold records from groups such as YES and the Moody Blues.

But Abrams tells Insight that the FM stations have become too commercialized and don't play as many songs. So, except for a few channels, XM will be almost commercial-free and will play music in a way never before heard on radio. "We will play the Beatles, but not just `Hey Jude,'" says Abrams. "People love Frank Sinatra and Ella Fitzgerald, but you never hear them on radio except on a few AM stations. We will have whole channels dedicated to them." The same goes for classical music. Abrams says there are only 40 classical stations left. XM has hired NPR's Martin Goldsmith to oversee three or more classical channels featuring everything from choral music to orchestral works.

XM and Sirius subscribers will be able to choose from more than 20 models of car radios from brand-name manufacturers -- including Sony, Alpine and Pioneer -- that will receive a combination of AM, FM and satellite stations. New cars will come equipped with three-band radios beginning next year. Sirius radios will be installed in BMWs, Jaguars, Chryslers and Mercedes; and XM radios will be in Saabs, Hondas, Chevrolets, Cadillacs and others. Sony is manufacturing for XM a portable digital radio that can move from home to car; they will cost between $250 and $400 and will be mutually compatible.

Charles Robbins, an XM spokesman, says the company expects to break even in 2004. Sirius estimates it needs just 2 million car owners to sign up for its service to do so.

Investors are excited. XM's biggest shareholder is Motient Corp., formerly known as American Mobile Satellite Corp. Other investors include General Motors, American Honda Motor Co., Clear Channel Communications and DirecTV. Both the satellite companies trade publicly. "I am holding on to the stock and plan to put my kids through college with it even though the market is down right now," says Diana Pagnotta, the former producer of the popular syndicated talk show Don and Mike.