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Satellite Radio Blasts Off

XM and Sirius satellite radio services reach orbital velocity with an army of listeners and tantalizing new options. What's your best choice?
Steve Morgenstern
From the Print Edition:
Morgan Freeman, Mar/Apr 2005

When satellite radio was introduced in 2001, the naysayers were out in force. Who in his right mind was going to pay $10 or more every month to listen to radio? And judging from the early numbers, it was hard to argue the point. XM Radio was first to market in November 2001 and, after the holiday season, had a measly 30,000 paying customers to show for its efforts.

Sirius's service didn't launch until July 2002 and, by the end of the year, had roughly 34,000 subscribers. In October 2002, Wired News ran a story headlined Was Satellite Radio a Big Waste? What a difference a few years make. Today satellite radio is soaring. By the end of 2004, XM Radio boasted 3.2 million subscribers, nearly doubling its audience in a single year. Sirius, while still much smaller, reported an even more impressive growth rate, nearly quadrupling its subscriber base to 1.1 million during 2004.

And, of course, Sirius grabbed headlines when it dropped the H- (as in Howard) bomb in October, signing Howard Stern for a five-year stint at a cool half a billion dollars. That's "billion" with a "b" my friends—this satellite radio stuff is serious business.

So what went right? First and foremost, cars started arriving in dealer showrooms with satellite radios preinstalled. While listening in your car isn't the only way to hear satellite radio, it's certainly the driving force (sorry) behind the industry. When XM and Sirius first launched, the only way to receive satellite radio in your car was to replace your existing car stereo, a process that combined three deal killers in one—the expense of buying a new radio, the hassle of having it installed, and the prospect of paying a monthly subscription fee. With the radio preinstalled when you buy a new vehicle, all you have to do is pony up for the subscription fee ($9.99 monthly for XM, $12.95 for Sirius). It must be working—GM alone has built more than a million cars and trucks with XM radios.

Second, the satellite radios themselves improved dramatically. Built-in car units became more attractive and modular radio receivers became small enough to carry and dock in cradles in your car or your home or even in a boombox. XM now has a line of handheld portables that let you listen iPod-style to satellite programming.

Increased consumer awareness of satellite radio has also fueled the boom. Throwing advertising dollars at the problem was fine for attracting early adopters, but now we've reached the stage where most of us know someone with a satellite radio receiver and may have experienced the benefits firsthand. As with other innovative technologies in recent years (TiVo and HDTV spring to mind), the good news spreads like a benign virus through the population.

And most important, it is good news. Both Sirius and XM are delivering on their promise, providing programming that entertains, informs and stimulates—a sharp contrast to the creative meltdown in commercial broadcast radio. Yes, plenty of top-40 rock music beams down from those satellites, but lots of classical, jazz, country, blues and reggae, with song choices that aren't limited to a straitjacket playlist, can be tuned in, too. Sirius and XM each offers more than 120 channels, over half devoted to music, the rest a diverse mixture of news, talk, sports, comedy, even radio drama. And all of the music channels on both services are delivered commercial-free. Ahhhh, sweet relief!

There's wholesome kids' programming, nearly nonexistent on broadcast radio, and uncensored standup comedy (the absence of censorship also extends to music CDs labeled with parental-advisory stickers that you can usually hear only if you buy them at your local store). Even the news and talk radio provided by the satellite services leave broadcast radio in the dust, with multiple round-the clock national and international news sources, sports talk and political commentary from all over the political spectrum.

Furthermore, both of the satellite systems broadcast program information along with their audio content, so the track name and artist for the music you're enjoying is always displayed on the radio's LCD screen.

And all of this programming is available from coast to coast. You know that sinking feeling when you're tooling down the highway and your favorite cool jazz station fades away, replaced by static or, even worse, some caterwauling country duo? Gone. You're never out of range of a satellite. You can stick with the same stations throughout the lower 48. And in cities where the view of the sky is obstructed by buildings too big to allow a clear satellite signal, you'll likely find a terrestrial repeater rebroadcasting the station lineup—you'll never know the difference; the receiver simply picks up the repeater's signal when the satellite's obscured.

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