Beam Teams

Satellite Radio Dishes: The Goods in 2006

By Audrey Gray

Imagine you’ve been invited to a party in mid-town Manhattan. You step into an elevator that rockets up thirty-six floors so fast you get a head rush. When the doors slide open, revealing sixty sound-proof, glass-walled studios, a glance in tells you the guest list of this bash is beyond eclectic. Eminem is spinning next to a gay talk show host. Thrash bands, reggae artists and classical violinists are all there. Oh, and did we mention? Howard Stern is in the house.

The next day, you get another invite, this time to DC. The address is decidedly downtown, in an old warehouse tricked out with psychadelic lighting fixtures, suspended speakers called “sound tubes” and, once again, dozens of glass-walled studios. The clientele here is just as diverse, euro rockers and honkeytonk hosts. You rub shoulders with baseball legend Cal Ripken and then hang with headbangers in a studio called “Squizz.”

Now, imagine both parties are running 24/7…and you’ve been offered a chance to listen in to every sound booth at either party for $12.95 a month. That offer, without the in-the-flesh rush, is the party plan of North America’s two satellite radio companies, and so far, nearly 9 million people have sent in their RSVP’s.

2006 is a big year for satellite radio’s two providers, Sirius in Manhattan and XM in DC. Now that their programs and products are finally registering with the larger public, not just early adopters, the companies are poised to market a new generation of more versatile receivers and a new set of services including graphic text and video.

Both companies have gambled big over the last ten years, spending about two billion dollars each to get the multi-channeled satellite service operational, in hopes that the public would indeed be willing to pay for radio just as it paid for cable in the 80′s. Neither company is turning a profit, yet. In fact, the 2005 net loss reports in the third quarter alone were $131.9 million for XM and $180.4 million for Sirius. But investors are sticking around because satellite radio is, as Delphi’s consumer electronics director Joe Damato puts it, “the fastest growing consumer technology of all time.”

Subscriber numbers soared over the last year in response to big talent aquisitions, contracts with major sports leagues, and increasingly better deals with car manufacturers to pre-load cars with satellite radio receivers. Sirius predicts the market will continue to explode, with 40-to-45 million satellite radio subscriptions by the end of 2010.

Content is king

So, why the boom? Why would so many Americans and Canadians pay for radio when they could just tune into the AM and FM “terrestrial radio” stations they’ve grown up with for free? Short answer: programming that doesn’t include twenty minutes of commericals an hour. Consolidations in the 90′s robbed many traditional radio stations of their unique flavors, replacing playlists, often overnight, with a generic neopolitan of top-40 pop, country and hip-hop. Terms like “twofer Tuesday” became common, as DJ’s tried to talk their way around increasingly frequent commerical breaks.

Into the homogenous spectrum sizzled satellite radio, offering nearly a hundred niche music channels 24 hours a day. Listeners could hear deep cuts off their favorite 70′s albums, choose from five different kinds of jazz formats, sample the EP’s of unsigned artists, worship at all-Elvis or all-gospel channels, and go “old school” with their rap or “cutting edge” with their rock. Both Sirius and XM have pledged to keep their music channels free of commercials.

No such promise with the talk offerings, though satellite radio services once again deliver a wide range of consumer-friendly shows such as “Radio Disney,” stand up comedy (family friendly and “uncensored,” since the FCC does not censor obscenities on subscription services), conservative talk, liberal talk, gay talk, Hispanic talk, and all manner of news programming from respected outlets like NPR or the BBC. Both Sirius and XM have created channels “especially for women,” like “Martha Stewart Living Radio” (Sirius) and “Take Five” (XM’s version with hosts like supermodel Tyra Banks).

XM and Sirius are fierce competitors, especially when it comes to making big programming announcements. One of XM’s biggest was an 11-year deal to air every game in Major League Baseball, a deal that cost the company $650 million. XM reports nearly one in four new subscribers signs up because of baseball.

Sirius had its own grand slam: the aquisition of Howard Stern, who begins hosting his show from custom-designed studios at Rockefeller center this month. Stern and his entourage will actually have two full-time channels, Sirius 100 and 101, to fill with interviews, stunts, and rants no longer held in check by the FCC. The deal puts Stern in 300 radio markets instead of the 47 he had on FM radio, and Sirius is putting down $500 million in hopes that the “King of Media” will inspire his faithful subjects (and new ones) to subscribe.

Hook ups

While basic service from either company is $12.95/month, the one-time cost for a satellite receiver can vary significantly depending on where and how you want to listen. The most popular products are “plug and play” units that allow you to use the service in the car and at home on just one subscription. Delphi’s “XM Roady2″ was the top-seller (January-August, 2005) according to the NPD group, a market research company. The runner-up receiver was a Sirius plug and play tuner called “Starmate.” As low-cost start-up kits (most are around $100), these gateway products have given thousands of Americans their first taste of satellite radio content.

Passively listening to scheduled broadcasts is practically un-American anymore, now that TiVo and iPods have given people the option to program their own entertainment, and satellite radio products are trying to keep up with the when-I-want-it trend. Plug & Play and portable devices, some new ones on the horizon, will record up to 50 hours of live radio, allowing a commuter to record her favorite shows at home where the reception is good and then listen to the broadcast on the train where the satellite beams are blocked.

Many first-time subcribers are disappointed when they realize satellite reception is more elusive than terrestrial radio, or for that matter, cell phones. Receivers come with an antenna that needs a direct hit from a satellite, a hit that is most likely in a south-facing window or out on the open road. New products like the XM Signal Repeater allow you to bounce the good beam up to 75 feet around your house, even through walls, using the wireless spectrum once reserved for the first cordless phones. That saves you from having to deal with long cord extensions, a passe thought in the age of WiFi. Another home product takes advantage of XM’s Connect and Play technology which puts the tuner chip in a small antenna that is then connected to compatible equipment such as Yamaha’s RX-V757 A/V receiver.

The very latest satellite radio products are small, wearable units that allow you to record programming and mix it with your own MP3 or WMA files. The first generations of wearables from Delphi, Pioneer and Tao use XM’s XM2go platform. They were slightly bulky and had a first-in, first-out recording feature as well as a receiver that would allow you to catch a live signal. Some customers complained that it was rarely an easy catch. So for now, the companies are concentrating on smaller units like the Sirius S50 that only record the signal in home/car docks. The S50 also features a full color display with a sports ticker for the latest scores and a throaty female “audio assist” who’ll tell you which channel you’re listening to.

The S50, like MP3 players that are wired for XM such as Samsung’s upcoming neXus and Dell’s promised “DJ Satellite,” are the subject of some debate as major record companies chaffe at the idea of consumers saving and rearranging songs they got from radio feeds instead of paying for individual downloads. Sirius and XM both argue that the MP3 players don’t violate any laws or agreements because they are not rebroadcasts, but storage devices. Products may be delayed a bit this year while everyone negotiates. Meanwile, XM is doing a work around this debate with a Napster deal that gives users the option to bookmark any song they hear on the radio and purchase it online when they dock the radio-MP3 player to a PC.

The most lucrative connection satellite radio companies are making is with the auto industry. General Motors plans to manufacture 1.5 million vehicles with factory-installed XM receivers in 2006. Sirius has an exclusive agreement with DaimlerChrysler until 2012. Pre-installations are easy for everybody, as new car owners are more likely to shrug at the extra few bucks a month for a subscription fee when it’s thrown into their car payment.

XM is offering extra data features for cars and boats that include graphic weather and traffic systems. 2006 Acura RL’s and Cadillac CTS vehicles with pre-installed GPS systems can receive an XM “overlay” which color-codes certain highways to let you know how fast traffic is moving and shows icons for specific roadblocks like an accident or highway construction. Pioneer and Garmin are making aftermarket plug-in navigation systems (ranging $1200-$1800) with similar functions as well as a feature which will estimate your travel time to a specific destination taking into account the current traffic conditions. Sirius is promising to have its own graphic traffic products on the market this year.

2006 could be the year we see video streamed to cars as well, a possibility that could have kids cracking up to cartoons in the backseat instead of rolling their eyes at a parent’s ancient alternative rock channel. If satellite radio companies are focused on anything, it’s making sure every generation has its own flashy invite to the party.

“DON’T TOUCH THAT DIAL!” AM/FM’S DIGITAL UPGRADE

Listeners loyal to their preset buttons will have a better chance of hearing high-quality digital versions of their favorite AM and FM stations in 2006. 1200 stations have committed to upgrading to HD Radio (a digital technology developed by the iBiquity Digital Corporation) by the end of this year and manufacturers are promising to offer tuners in the $200-300 range along with higher-end products.

Like other digital audio players, HD Radio receivers have a screen that shows the name of the artist and song currently playing. Stations can send weather, traffic, stock quotes, or advertisements to that screen as well. Some products allow you to pause or repeat a song. HD Radio sound is CD quality and static-free wherever you currently get your AM or FM signal.

Sirius VP of Communications Jim Collins says better technology doesn’t solve terresrial radio’s biggest problem, annoying ads. “All those commercials will sound a whole lot better now!” But HD radio stations are answering that jab with “multicasting,” their ability to send alternate music-rich channels over their digital signal. They also counter with the fact that digital radio has no monthly fee. “At the end of the day, the vast majority of people will take free over subscription,” says iBiquity COO Jeff Jury. Infitity Bradcasting, one of the nation’s largest major-market radio operators and the former employer of Howard Stern, is now marketing its stations as “Free FM.”

Free once you buy a new receiver, that is. In 2006, JVC, Kenwood, Panasonic, Delphi and Sanyo are offering after-market digital car stereos in the $350-$500 range. Tabletops by Boston Acoustics, Radiosophy and Polk are on the market for $269-$699. Yamaha’s RX-V4600, a home theater receiver that’s HD radio compatible sells for $1900. Jury says he expects prices to drop this year as consumer demand increases and more retailers pick up digital radio products. He calls portables “the next big move” for manufacturers, but he says we’re still years away from having digital radio reception on our digital music players or cell phones. Now that terrestrial radio has a digital platform, add it to the list of features consumers will be looking for in home entertainment systems and in the ultimate converged device.

XM ROADY XT

$99.99

Delphi’s Roady XT is a two-by-four…inches that is, the smallest Plug and Play on the market. This was the radio that went home with thousands of baseball fans at last year’s World Series, a major givaway celebrating XM’s baseball deal. Fans of all sorts can catch sports scores on the 2-line display, along with channel, info and the lastest stock prices all backlit in a choice of 7 different colors. The RoadyXT comes with “TuneSelect,” a feature which can save 20 songs and let you know if any of your favorite artists are playing on another XM channel.

Pioneer AirWare 

$300

A sleek XM2go portable with 30 channel presets and a 20 song memory, this handheld tuner shows off its features with a fat 6-line display. It stores five hours of XM programming. Fill it up with InfoExtras like sports scores or a stock quote ticker that you can customize to track the companies you are most interested in. Belt clip and earphones included.

Samsung NeXus

$TBA

2006 is the year XM gets a piece of the MP3 action. This portable is a satellite radio tuner only when it’s docked…unplugged,  it’s a digital multi-tasker, playing MP3 or WMA files and storing up to 50 hours of XM radio programming so you can time-shift radio shows or create playlists combining your favorite radio hits with your own downloads.  Comes in a 512 MB or 1 GB version.

Sirius S50

$360

Take your playlist to the next level with this combo satellite radio/ MP3 player. The Sirius S50 can record up to 50 hours of radio programming while it’s stationed in a car/home docking kit, alerting you when your favorite artists are on any Sirius channel. On the road, you can scroll through the programs to choose the songs you liked best and add them to your own MP3 playlists.  The color LCD display’s a beauty, showing you artist/title/track info and even album covers as well as stock quotes and sports scores.

Xact XTR3

$50

Unclutter your dash by mounting this slim Sirius Plug and Play right on your sun visor.  The one-line display flips around, allowing you to read channel, artist, and song information as it scrolls by right-side up.  A built-in wireless FM transmitter works with your car’s FM radio.  With 36 channel presets and a remote, this adaptable tuner is an easy and affordable add to your car stereo system.

Sirius Sportster Replay

$170

Listening to the NFL playoffs and want to hear that last call again? The latest Plug and Play from Sirius lets you do your own instant replay.  In fact, you can repeat (but not store permanently) up to 44 minutes of action, talk radio, or music. Thirty channel presets and a scrolling sports ticker are all easy to set up, and a “Game Alert” signals you when your favorite teams are in action.  The Sportster Replay comes with a car kit, but a sweet-sounding boombox is available in case you’d like to tailgate.