HOW SATELLITE RADIO WORKS 5
How XM's System Works 6
How Sirius' System Works 7
TERRESTRIAL RADIO 8
SIRIUS' SATELLITE RADIO CORPORATION 12
Product Offering 15
OEM Vehicle Manufacturers Partners 16
Hardware Partners 17
XM SATELLITE RADIO CORPORATION 18
XM Satellite Radio Holdings, Inc. 19
OEM Vehicle Partners 21
Hardware Partners 22
SIRIUS AND XM; A COMPARISON 23
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... [continues]
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