A Comprehensive Study Of The Satellite Radio Industry:
...TERRESTRIAL RADIO 8
SIRIUS' SATELLITE RADIO CORPORATION 12
History 12
Demographics 14
Product Offering 15
OEM Vehicle Manufacturers Partners 16
Hardware Partners 17
Financials 17
XM SATELLITE RADIO CORPORATION 18
History 18
XM Satellite Radio Holdings, Inc. 19
Demographics 20
Promotions 20
OEM Vehicle Partners 21
Hardware Partners 22
Financials 22
SIRIUS AND XM; A COMPARISON 23
RECOMMENDATIONS 29
INTRODUCTION
Would people be willing to pay $12.50/month for commercial free radio beamed right to their car or home. Well two companies and many big investors are betting about $3 billion dollars that people are willing to do just that. In 1997, the Federal Communication Commission (FCC) granted a portion of the S-band spectrum for satellite radio and two companies purchased use of these bands and started the only two companies competing in the satellite radio business today, namely Sirius and XM. Analysts like William Kidd of CE Unterberg Towpin, predict satellite radio will generate about $10 billion a year in revenues by 2007 (McClean, 2001). However, to date neither of these companies has earned a dime. According to industry analyst though, "its not whether satellite radio will take off-rather it's a matter of how fast." (Helyar, 2004). Despite lofty predictions, satellite radio has some big issues to overcome before it becomes a serious threat to the $19.6 billion per year terrestrial radio industry.
The article that appeared in Fortune entitled "Radio's Stern Challenge" by John Helyar discusses Sirius' marketing strategy to not only take market share from the entrenched and free terrestrial radio industry but also to beat its only competitor, XM. The Fortune article presents how a fat and lazy radio industry has failed to react to an eroding listening base and an increasing number of competing technologies. Issues like lack of...
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