The voice of the late Bob Marley ushered satellite radio on the air yesterday (Sept. 25), promising listeners greater variety on the dial — for a price. Hugh Panero, president of XM Satellite Radio, flipped a switch in the company’s Washington headquarters shortly after 12:30 p.m. ET and began offering service in San Diego and the Dallas-Fort Worth area. The company plans to expand nationwide in the coming months, and a competitor, New York-based Sirius Satellite Radio plans to come on line later this year.
“It’s the signal of the future,” Panero said while tuning in his company’s reggae channel to Marley’s classic “One Love.” He described the concept as “part rocket science, part rock’n’roll.”
XM Satellite Radio is offering 100 channels of varied music and talk, with limited advertising on some and no commercials on more than 30 channels. The company has 1.5 million pieces of music in a digital library to aim at markets ranging from opera to Latin romance. Service costs $9.99 a month.
Besides the reggae channel, called the Joint, XM offers a hard rock station called Bone Yard and 24 hours of disco on Chrome. Teens can discuss their problems on Babble On, while adults can tune into comedy, sports or news from a dozen sources.
Each of the 100 stations has its own hosts, who broadcast from XM’s headquarters. Among them is Lou Brutus, whose Special X features every type of music imaginable, including people playing the spoons. “The word has gone out through the bizarre music community and they are coming out of the woodwork,” he said.
Programming is broadcast to satellites and then to radio receivers. The signal can be blocked by tall buildings, so ground transmitters will repeat the signal in urban areas. Some receivers can be used in both autos and in homes.
For autos, a new satellite stereo system costs about $400, said Stephen Cook, senior vice president of sales and marketing. But most stores that sell radios also sell satellite receivers that work with any existing car stereo.
The Pioneer Universal receiver, a small box with a remote control that shows the name of the song and the artist, runs about $250. A small antenna that sits on the vehicle’s roof can cost up to $79. Another option is the Sony Plug and Play for about $300. The size of a radar detector, it can be removed from its plastic holder and used in a home stereo system, Cook said.
The satellite companies have the ambitious goal of signing up more than 4 million subscribers each in the next four years to break even. Sirius will charge $12.95 monthly and offer more commercial-free programming.
Morgan Stanley Dean Witter analyst Vijay Jayant said success depends on how committed automakers are to installing the satellite-receiving radios in their vehicles.
General Motors Corp., which has invested $120 million in XM, plans to offer the radios as a factory-installed option in some 2002 Cadillacs and in 20 models the next year. The subscription can be included in the car’s financing.
Ford Motor Co. and DaimlerChrysler Corp. are working with Sirius and plan to offer the radios in 2003. Other automakers, including BMW and Porsche, are planning to install the radios at the factory.
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