|
Alan Breznick
A startup headed by a veteran cable industry executive is bidding to become the DirecTV of digital satellite radio.
XM Satellite Radio Inc., a venture backed by Hughes Communications' American Mobile Satellite Corp. and privately held WorldSpace Inc., is gearing up to launch a 100-channel lineup of national radio stations by the end of next year. Run by president/CEO Hugh Panero, most recently president/CEO of Request TV, XM will be a premium service costing subscribers $9.95 a month after they purchase new digital radio receivers for up to $500 apiece.
Formerly known as American Mobile Radio Corp., XM will compete for listeners with another new firm, CD Radio Inc., that also plans to introduce a premium service for $9.95 a month next year. Both companies intend to target primarily car drivers, a potential audience estimated to be as large as 34 million to 44 million people, with palm-sized antennas taking in signals from their new satellites.
For the past few months, both CD Radio and XM have been busily signing up audio programmers for their rival services, including such cable stalwarts as C-SPAN and Bloomberg News. Both are also trying to stake out programming niches, such as Hispanic, African-American, foreign language programming and other ethnic channels.
But XM is seeking to distinguish itself by enlisting most of the major cable networks to join its advertiser-supported lineup. Under Panero's leadership, it's already lured Black Entertainment Television Inc. and is now wooing CNBC, Discovery Communications, E! Entertainment Television, ESPN, MTV, Turner Broadcasting and other cable programmers.
"We're talking to all the major cable brands," Panero said. "A lot want to extend their brands onto radio on a national basis."
In a four-way deal signed last month with BET Holdings Inc., Radio One Inc. and Syndicated Communications Inc., for example, XM committed to offering four African-American channels branded with the BET name. The four BET/Radio One channels will be talk, gospel, hip hop/rap and adult contemporary music.
Financial details of the BET agreement were not disclosed. But Panero said programming deals will generally be revenue-sharing arrangements, with each party splitting up front costs and ad revenues. Among other things, he envisions "a cable content radio channel," meshing programming from a number of cable networks.
XM also aims to stand out by playing up personality radio. More so than its rival, it aims to recruit disc jockeys, talk show hosts and other on-air talent with attitude, such as the next Rush Limbaughs and Dr. Laura Schlessingers.
"We will be very different from wallpaper radio," Panero said. "We will have personality."
XM recently penned contracts with Alpine Electronics Inc., Pioneer Electronics Corp. and the Sharp Corp. to manufacture and distribute digital radio sets, particularly for cars. But how well these radios, which will also receive AM and FM signals and will cost $199 to $500 apiece, will sell is an open question.
Noting that 15 million new car and home radios are sold each year, Panero said he's shooting for 2 million to 3 million subscribers by the middle of 2002, about 18 months after launch. Profits are expected in 2003.
Back to this issue
|
