XM Hopes to Reinvent the Radio
When Fortune magazine named its Product of the Year in 2001, the winner was a new technology that many feel may revolutionize the way we listen to radio when we drive. The magazine's rationale for its selection stated: "Of all the new technologies of 2001, XM Satellite Radio is way, way, way above the rest. It's the first major advance in radio since FM emerged in the 1960s, and the best thing to happen to mobile music since the dashboard CD player." After spending more than a billion dollars for programming and satellite operating expenses, as well as catchy TV commercials featuring celebrities such as David Bowie, B. B. King, and Snoop Dogg,XM Satellite Radio hit the airways in November 2001, claiming that it will do for radio what cable did for television.
XM radio uses "Rock" and "Roll," its two Boeing 702 satellites stationed over the East and West Coasts, to beam 100 audio channels from the stratosphere to subscribers' cars. While subscribers to satellite radio still get regular broadcast stations via their car antennas, they get 100 XM channels, about a third of which are commercial-free. Subscribers get 71 channels of music, including 7 for hip-hop, soul, and R&B; 5 for jazz and blues; 5 for Latin music; and 3 for classical and opera. Each decade from the 40s to the 90s gets its own XM channel, featuring not just music but period commercials and interviews with personalities from the era. XM rounds out the lineup with news, sports, talk, and children's programming. The 12 news channels include Fox News and CNN; CNBC, CNNfn, and Bloomberg News for business junkies; and CNET for the technofile. Commercial-free news is available on C-SPAN or BBC World Service. XM offerings also include radio versions of network fare from ESPN, MTV,VHl,the Discovery Channel,and BET.
Many industry observers note that there is a tremendous opportunity for satellite radio. There has been consolidation in the radio industry, which has led to repetitious,cookie-cutter formats in markets across the country. To pay for the huge radio conglomerates they have built, moguls must increase the commercial load, which means less programming and more frustrated listeners.XM's chief programmer, Lee Abrams, notes that the company hopes to have the same creative effect as the FM revolution of the late 60s and 70s, which brought major changes to the radio scene. FM's superior sound and lack of commercial clutter triggered a huge audience shift away from AM radio. However, Abrams argues that FM has sprouted a potbelly and gone gray at the temples and become the stodgy establishment, complacent and vulnerable to a hard-charging rival such as XM. "Right now, we live in a
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