Coming Soon to Your Car Radio: Satellite Broadcasts

Computerworld - If two aerospace start-ups have their way, people will soon be listening to satellite broadcast radio while they drive.
Sirius Satellite Radio Inc. and XM Radio Holdings Inc. plan to charge people subscription fees of about $10 per month for satellite radio when they begin offering their competing services later this year. The rival companies will both offer 50 channels of music and about 50 channels of news, talk and sports radio 24 hours a day throughout the U.S.
Todd Goodnight, alliance manager for receiver marketing at Sirius Satellite, said he hopes consumer frustration with commercial radio broadcasts will prime the pump for satellite services in radio, just as it did for satellite TV.
"AM/FM radio is back in the caveman world, with static and noise problems," said Goodnight. "There is also so much built-up frustration with AM/FM radio and the commercialism of it."
Meanwhile, the two companies are in a mad dash to get their in-vehicle satellite communications services off the ground. Their efforts include building, launching and maintaining satellites at a cost of $300 million to $500 million each, setting up user pilot programs and establishing partnerships with national retailers, automotive dealers and automakers.
Still, neither firm has begun to tackle the arduous task of priming auto dealers or consumers for the services they plan to launch, analysts said.
"They'll have to rely on aftermarket sales for the first 18 months," said Sean Badding, an analyst at The Carmel Group in Carmel-by-the-Sea, Calif., referring to specialty equipment that gets added to vehicles after they leave the manufacturer. "The automakers won't play a critical role until the 2003 time frame, so dealers are essential to their success."
Badding said he hasn't seen a big push to stir up dealer interest from either company.
Washington-based XM Radio last week inked a deal with Peterbilt Motors Co., a division of Paccar Inc. in Bellevue, Wash., to provide satellite radios on its 2003 line of custom-built trucks and big rigs.
XM Radio also has agreements with General Motors Corp., Honda Motor Co. in Torrance, Calif. and Freightliner Corp. in Portland, Ore.
GM, which holds a 23% stake in XM Radio, plans to have XM radios available as a factory-installed option on some of its 2002 models, due this fall.
New York-based Sirius Satellite has a similar set of deals in place with DaimlerChrysler AG and Ford Motor Co. Both of those automakers plan to carry Sirius Satellite-compatible radios on some of their brands, including Ford's Jaguar and Land Rover luxury lines.
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