INTRODUCTION
Are people willing to pay $12.50/month for ad-free radio directly delivered to their car or home? Two companies, with support from prominent investors, are investing around $3 billion in this idea. In 1997, the Federal Communication Commission (FCC) designated a specific section of the S-band spectrum solely for satellite radio use. As a result, Sirius and XM acquired the rights to utilize these frequencies and emerged as the only competitors in today’s satellite radio industry.
Analysts, like William Kidd of CE Unterberg Towpin, predict that satellite radio will generate about $10 billion in annual revenues by 2007 (McClean, 2001). However, these companies have not made any profit yet. Nonetheless, industry analysts believe that the success of satellite radio is certain; it’s only a matter of how fast it will occur (Helyar, 2004). Despite optimistic forecasts, satellite radio still encounters significant obstacles before it can become a major rival to terrestrial radio, which generates $19.6 billion in annual revenue.
The article titled “Radio’s Stern Challenge” by John Helyar in Fortune discusses Sirius’ marketing strategy. Not only does Sirius aim to gain market share from the established and free terrestrial radio industry, but it also aims to outperform its only competitor, XM. According to the Fortune article, the radio industry has become complacent and sluggish, failing to respond to a decline in listenership and an increase in competing technologies. Issues such as poor programming, lack of on-air talent, and a 166% increase in commercial airtime have driven listeners away from radio. Teenagers aged 12-17 now spend 11% less time listening to radio compared to five years ago, while adults aged 18-24 spend 13% less time (Helyar, 2004).
The article discusses the threat terrestrial radio faces from competing technologies such as satellite radio, streaming digital radio on the Internet, and Apple’s iPod. One advantage terrestrial radio has is that it is free, unlike these other technologies. However, satellite radio is hoping to attract listeners by offering a commercial-free format. Sirius, for example, provides 65 commercial-free music channels and 55 news, sports, and talk stations. Additionally, satellite radio has an advantage over terrestrial radio in that the signal remains consistent while driving across America.
Both Sirius and XM are major competitors in the satellite radio industry. Sirius is focused on outperforming XM by acquiring top on-air talent such as Howard Stern, whom they have committed to paying $500 million over a five-year period. Furthermore, Sirius has secured a $220 million deal with the NFL to broadcast every NFL game on their satellite radio stations. These substantial investments exemplify Sirius’s determination to close the gap with their sole rival, XM.
XM was the pioneer to penetrate the market and has formed agreements with both General Motors and Honda to incorporate their receiver in all newly produced vehicles. This constitutes approximately 50% of their new customer base. XM invests an average of $57 per subscriber, whereas Sirius spends $227. Nevertheless, according to the Fortune article, Sirius’ main challenge might not be terrestrial radio or XM, but rather the increasing presence of emerging technologies like Apple’s iPod and digital streaming radio.
To comprehend the assertions in this Fortune article, it is essential to grasp the overall trends in contemporary terrestrial radio technology. Furthermore, understanding the functioning of satellite radio technology as well as how XM and Sirius utilize it to gain a competitive advantage is crucial. Additionally, the history, structure, financing, and strategy of both XM and Sirius are presented to provide further insights into these two companies. Lastly, a comparison is drawn between XM and Sirius to elucidate how they are tackling the challenge of establishing a satellite radio company.
THE FUNCTIONING OF SATELLITE RADIO
Most of us have experienced the frustration of driving too far and losing reception on our favorite radio station. This is because traditional radio signals have a limited range of only 30 to 40 miles from the source (Bonsor, 2004). Fortunately, satellite radio has emerged as a solution, similar to how it revolutionized television. With satellite radio, signals can be transmitted over a distance greater than 22,000 miles, resulting in crystal-clear sound and minimal commercial interruptions (Bonsor, 2004). Essentially, satellite radio, also known as digital radio, allows for uninterrupted playback of near CD-quality music that is delivered to your radio from space.
According to Silverstein (2004), the process of satellite radio operation is relatively simple. Satellite radio providers transmit a signal to a satellite, surpassing the limitations of ground-based transmitters that weaken with distance. They aim to offer more captivating programming than traditional radio stations and reduce advertisements in exchange for a monthly subscription fee. However, Sirius Satellite Radio and XM Satellite Radio have slightly more complex systems. Developing this advanced technology took many years. Both Sirius and XM utilize different approaches but provide listeners with access to 100 channels of music, news, sports, and other programs throughout the continental United States. XM Radio uses two Boeing HS 702 satellites named Rock and Roll positioned in parallel geostationary orbit: one at 85 degrees west longitude and the other at 115 degrees west longitude.
The Geostationary Earth orbit (GEO) is the most commonly used orbit for communication satellites, situated approximately 22,223 miles above Earth. XM Radios ground station transmits a signal that two GEO satellites receive and subsequently transmit back to radio receivers on the ground. These radio receivers are specifically designed to receive and decode the digital data signal, which includes digital audio, song title, artist, and music genre. All of this information is displayed on the radio (Bonsor, 2004).
Since GEO satellites are positioned above the equator, it is necessary for the ground terminals to have an unobstructed view of the sky in order to receive signals from them. This presented a challenge for XM as obstacles like buildings or tall trees can block signals from the GEO satellites for listeners in cars. To address this issue, XM implemented a solution by adding a network of repeaters to their system. These repeaters are ground transmitters comprised of antennas installed on buildings and other locations. They receive satellite signals from an ideally positioned antenna and then retransmit them (Silverstein, 2004). Primarily located in urban areas where satellite signal loss occurs most frequently, these repeaters effectively supplement the system.
Each XM receiver includes two custom integrated circuits designed by STMicroelectronics. These receivers use a small antenna similar in size to a car phone to capture the XM signal (Bonsor, 2004). They can receive signals from both Boeing satellites and a repeater at the same time. As long as one of these sources is available, the radio will play without interruptions. In case of brief signal loss, the receivers have buffers that store programming for several seconds, ensuring uninterrupted programming (Silverstein, 2004).
Unlike XM, Sirius does not use GEO satellites. Instead, Sirius uses three Loral FS1300 satellites in unique elliptical orbits to avoid the problems of GEO satellites (Silverstein, 2004). The elliptical orbits ensure that each satellite spends approximately 16 hours per day over the continental United States, with at least one satellite above the US at all times (Bonsor, 2004). Moreover, the elliptical orbits enable the satellites to appear higher in the sky than XM’s satellites, reducing the likelihood of a listener being out of range and hence requiring fewer repeaters for Sirius (Silverstein, 2004).
Similar to XM, the Sirius system works by beaming programs to one of its three satellites, which then transmit the signal to the ground. Radio receivers on the ground pick up one of the channels within the signal (Bonsor, 2004).
The Sirius receiver includes an antenna module and a receiver module. The antenna module captures signals from the satellites or ground repeaters, amplifies them, and filters out any interference. The receiver module, consisting of eight chips, then receives the signal. This chipset converts the signals from 2.3 GHz to a lower intermediate frequency. Additionally, Sirius offers an adapter that allows traditional car radios to receive satellite signals (Bonsor, 2004).
TERRESTRIAL RADIO
Since 1919, traditional terrestrial radio broadcasting has been in existence. Two major broadcasting companies today include Clear Channel Communications, Inc. and Infinity Broadcasting Company. Clear Channel’s history dates back to 1972 when the San Antonio Broadcasting Company was established. In 1975, Clear Channel acquired its first radio station, WOAI-AM, which had a nationwide frequency of its own.
Clear Channel Communications, Inc ventured into the television industry in the late 1980s and acquired multiple TV stations. By 1994, it had transformed into Clear Channel Communications, Inc Common Stock and possessed a total of 43 radio stations and 16 TV stations spread across 32 markets. Currently, Lowry Mays holds the position of Chairman of the Board while Mark Mays serves as President and Chief Executive Officer. Randall Mays functions as the Executive Vice President and Chief Financial Officer. Throughout his career, Randall Mays has been engaged with over 1,376 radio stations either as an owner or programmer.
Infinity Broadcasting, a division of Viacom International, Inc., possesses over 185 radio stations in the top 50 markets across the United States. These stations cater to diverse genres including news, FM talk, modern rock, oldies, classic rock, and hip-hop/rap. Additionally, Infinity holds authority over 29 prominent sports teams such as the New York Yankees, Mets; Dallas Cowboys; New York Giants; and Chicago Bears.
Infinity’s programming exposure is strengthened through its longstanding partnership with Westwood One, which offers a diverse range of content and programming. This includes news, sports, weather, music, talk shows, and entertainment. Moreover, Westwood One presents an impressive array of events like the Olympic Games, NFL football games, NCAA basketball tournaments, the Grammy Awards, and the Academy of Country Music Awards.
The Federal Communications Commission (FCC) is responsible for regulating broadcasting companies, including the two mentioned. Since 1934, the FCC has been authorized by the Federal Communications Act to regulate broadcast content and enforce penalties for noncompliance. Its main objective is to censor media accessible to citizens, particularly vulnerable audiences like children. The FCC ensures offensive and inappropriate content, such as foul language, is not available.
The Commission can punish those who violate the regulations by imposing fines or revoking programming licenses. Clear Channel Communications, which airs the popular Howard Stern Show, is currently under scrutiny for its content. In April 2004, they faced a proposed fine of $495,000 for indecent remarks made on the show. This equates to $27,500 per each of the eighteen alleged violations, which is the maximum allowable penalty.
The Commission imposed the highest allowed fine on Clear Channel due to their past history of broadcasting indecent programming (Dietz, 2004). As Clear Channel decided to terminate the Howard Stern show, as the producers and creators refused to guarantee improvements in content and language standards.
Stern is currently preparing to broadcast his controversial show on Sirius Satellite Radio. He can now enjoy his newfound freedom from the FCC’s regulations, as satellite radio is not governed by the FCC. This means that Stern can express himself without any limitations, and he also intends to attack his rivals in terrestrial radio, such as Clear Channel and Infinity. Sirius is excitedly anticipating the show’s debut in January 2006, as it will help increase their number of subscribers and elevate their competitiveness against traditional terrestrial radio.
The satellite stations are not concerned about the competition as they have won the battle over commercials. While talk, sports, and news stations have commercials, Siriuss and XMs music stations do not. The costs of satellite radio, including salaries, technology, and equipment, are covered by subscription fees. Sirius charges $12.95 per month, while XM charges $9.99 per month, in addition to satellite radio and antenna purchases. Advertising spots are available on the other stations.
Terrestrial radio faces challenges in funding, resulting in increased commercial play time. Unlike other media channels, radio is free for listeners, leading to a lack of subscription fees. Combined with rising costs, the only option is to increase commercial-time while reducing expenses elsewhere. In many cases, stations replay pre-recorded shows or contest call-in winners to save on salaries and attract more listeners. This creates the illusion of numerous contest winners. The remaining airtime is dedicated to music and commercials.
Stations commonly broadcast 15 to 20 minutes of advertisements per hour due to the increase in commercial time. Advertisers consider radio as an effective channel for promoting products or services. In a study conducted by Arbitron, Inc., a global firm specializing in media and marketing research, it was found that radio surpasses other mediums in its ability to target specific consumers – a crucial factor for advertisers (McWhorter, 2001).
Analyzing a program’s content makes it relatively easy to determine the demographic characteristics and preferences of the radio audience, such as age, gender, political affiliation, and interests. This knowledge allows advertisers to create targeted advertisements for their desired market. Additionally, radio advertising is more cost-effective than other mediums like TV because visual elements are unnecessary. According to a study, cost efficiency is the second most important factor that leads advertising firms to choose radio. The economic advantages of radio advertising enable advertisers to have a longer on-air presence and maintain a strong presence in the minds of their target audience (Vasey, 2004).
Due to reduced advertising costs, there is an increase in the production and airing of commercials. This includes both new commercials and re-aired ones. To combat a decline in listeners, terrestrial radio is working on implementing a digital signal broadcasting method. Currently, more than 140 stations nationwide are involved in the development and testing of new digital terrestrial systems. These digital signals will be transmitted using the same frequencies as AM and FM stations. The lead developer for this new technology is iBiquity Digital Corp, which was created in August 2000 through the merger of Lucent Digital Radio and USA Digital Radio – both well-known developers of AM and FM digital broadcasting technology.
According to iBiquity.com, IBiquity aims to make money from digital radio and provide high-quality audio and wireless data services to audiences. They also aim to help broadcasters transition affordably to digital technology. Digital radio receivers were first released this year, with car radios starting at around $200. However, the prices are expected to decrease soon. With a digital radio, listeners can enjoy extra information like song title, artist details, stock updates, news, weather conditions, and local traffic.
Despite competition from satellite radio and technologies like the iPod, terrestrial radio remains the most popular medium. The rising costs of terrestrial radio have resulted in longer commercial playtime and a shift of on-air talent like Howard Stern. However, terrestrial radio maintains its strong presence with an annual revenue exceeding $19.6 billion dollars. In comparison, satellite radio only generated $111.6 million dollars in revenue in 2003. Therefore, satellite radio has a significant distance to cover before posing a serious threat to terrestrial radio.
SIRIUS SATELLITE RADIO CORPORATION
The Sirius Satellite Radio Company, originally known as CD Radio Inc., was established in 1990 by Robert Briskman and another former GEOstar employee. Briskman, a former NASA engineer and chief at GEOstar, founded the company. Initially named Satellite CD Radio Inc., it saw significant expansion under its initial CEO David Margolese (McClean Fortune Magazine Jan 22 2001).
David Margolese, a Canadian who dropped out of college in 1978 to start a Vancouver based paging company, has a long history in the telecommunications industry. Alongside well-known corporate raider Ted Rogers, Margolese purchased licenses for Canadian cellular phone rights and together they founded what is now known as Rogers Wireless, the largest cellular phone company in Canada. In the late 80s, Margolese sold his shares in Rogers Wireless to pursue venture capitalism. Subsequently, he became the CEO and president of CD Radio Inc in 1991.
In 1994, CD Radio Inc changed its name to Sirius Satellite Radio and aimed to provide a subscription-based satellite radio system in the American market. The system included 30 music channels without commercials and near CD quality, as well as 20 other channels for news, sports, and talk (LexisNexis). Margolese projected that the company would be operational by 1997 with estimated costs of about $500 million dollars (McClean Fortune Magazine Jan 22 2001). However, this prediction greatly underestimated the amount of money Sirius has spent so far.
In 1997, the FCC sold the rights to a part of the S band (satellite) frequency in an auction. Sirius purchased one license for $83.4 million, while the second license was acquired by XM Radio (Corrigan, 1997). Shortly after obtaining the S band licenses, Sirius partnered with Space Systems/ Loral to develop four advanced digital audio radio service (DARS) satellites to be launched in 2000.
Three satellites would orbit the earth and serve as the foundation of the satellite radio industry for Sirius. Additionally, a fourth satellite would remain on the ground as a backup if necessary (Krebs, 2004). Sirius partnered with Agere Systems, Inc., a prominent semiconductor and networking company, to collaborate on the design and manufacturing of chips for all its receivers. Recently, Sirius and Agere introduced their second-generation chips, enabling plug and play receivers (Electronic News, 2003).
Sirius made the decision to establish its corporate headquarters in Midtown Manhattan. They specifically chose a 37-story building designed by Margolese for this purpose. The construction of this state-of-the-art headquarters cost approximately $38 million. It is equipped with advanced studios and broadcasting equipment. While most of Sirius’ broadcasting operations take place at this location, they also have smaller broadcast studios in several cities including Los Angeles, CA; Memphis, TN; Nashville, TN; New Orleans, LA; Houston, TX; and Daytona FL. This strategic approach ensures that SIRIUS listeners can stay connected to the focal points of music, entertainment, and information across America (Sirius, comp.info).
This collection of locations and diversity provides a total of around 120 channels, with 65 of them dedicated to commercial-free music and 55 offering talk shows, sports broadcasts, and news. Featuring renowned personalities like Howard Stern, Eminem, Lance Armstrong, and Bam Margera, Sirius has become a major player in the satellite radio industry. Thanks to its multiple studios and talented roster, Sirius has quickly become a multi-billion dollar per year business with promising avenues for future growth. Sirius aims to target the demographics of over 200 million individuals who still listen to AM/FM radio.
Recent studies indicate a decline in weekly listening across all age groups, with an 8% decrease (Haylar, 2004). XM has a subscriber base exceeding 2 million, while Sirius lags behind with approximately 800,000 subscribers. To increase their subscriber count, Sirius has made substantial investments to bring on board Howard Stern, who has a massive following of 12 million fans. However, relying solely on popular DJs like Howard Stern is insufficient for Sirius to establish itself as the leading force in satellite radio.
Sirius’s main goal is to increase its number of subscribers, as this is the primary source of revenue for the company. According to the Sirius Quarterly Report from September 30, 2004, they had a total of 662,289 subscribers who pay an average monthly fee of $11.15 for access to commercial-free radio. In the past five quarters, Sirius has gained approximately 500,000 new subscribers while maintaining an average deactivation rate (or churn rate) of 2%. The churn rate in the two previous quarters leading up to September 30, 2004 was respectively 1.2% and 1.5%, indicating a positive trend for the company. On November 24th, 2004, Sirius announced that they successfully added another 800,000 subscribers (Clendenning, American Intelligence Wire November25 ,2004).
According to Bob Peck of Bear Stearns, Sirius is expected to achieve one million subscribers by the end of 2004.
Product Offering
Sirius provides 99 individual 100% commercial free music channels in various genres including Pop, Rock, Country, Hip-Hop, R&B/Urban, Electronic/Dance, Jazz/Standards, Classical, and Latin & World. These genres are further divided into channels ranging from 3 to 17 channels. In addition, Sirius offers 8 dedicated sports channels where you can stay updated on the latest scores and sports news anytime.
The major partnerships within sports include the National Football League (NFL), National Hockey League (NHL), and college sports conferences such as PAC 10, SEC, Big Ten, Big 12, and Big East. They also offer 14 channels of worldwide news coverage from respected names like CNBC, Bloomberg Radio, CNN, Fox News Channel, NPR Now and NPR Talk, PRI Public Radio World, Weather Channel Radio,C-SPAN Radio,BBC World Service and World Radio Network.
Sirius offers a total of 143 channels across a wide spectrum for talk and entertainment through various partnerships. These partnerships include Radio Disney, Our Time,Wisdom Radio,Radio Classics,Court TV ,Discovery Channel Radio,E! EntertainmentRadio ,WSM EntertainmentTruckingNetwork ABCNews&Talk,SIRIUS Patriot,SIRIUS Right,SIRIUS Left,Air America radio MaximradioCracked Up Comedy Raw DogSIRIUSTalkCentral SIRIUS OutQ EWTNGlobal Catholic NetworkThe Word NetworkRadio Catolica MundialHispanic TalkandBBC Mundo.
This allows Sirius to effectively target different markets while giving customers access to an extensive range of content.
OEM Vehicle Manufacturers Partners: Sirius has formed strategic partnerships with various automobile manufacturers to incorporate their satellite radio receivers in brand new vehicles. The main focus for Sirius lies in their partnerships with Diamler Chrysler and Ford. Diamler Chrysler, for instance, has agreed to include Sirius tuners in 500,000 cars, amounting to approximately 12% of its annual production. Additionally, other vehicle manufacturers have also reached agreements with Sirius.
BMW of North America plans to offer Sirius Satellite radios as a built-in option on the 2006 model year BMW 3 series at a cost of approximately $595. This will include a one-year subscription to Sirius Satellite Radio. Mercedes-Benz will also offer a fully integrated satellite radio option for its 2005 SKL350, which will be installed by dealers. The price for this option will be around $679 and will also include a one-year subscription to Sirius Radio. Additionally, various other car manufacturers including Volvo, Chrysler, DiamlerChrysler, Ford, Dodge, and Audi will have certain models available with Sirius radios as optional features.
However, one of the most strategic moves recently made by Sirius was forming an alliance with Hertz Rental car. Hertz will incorporate Sirius satellite radio in 53 of its main city locations. This will have a dual effect for Sirius. Firstly, it will increase its subscribership through the partnership with Hertz. Secondly, it will provide an opportunity for drivers renting Hertz cars to experience Sirius satellite radio without the need to make a purchase commitment. Hertz is renowned as the world’s largest and most famous rental car company, which will give Sirius substantial exposure and publicity.
Hardware PartnersSirius has established strategic alliances with various hardware manufacturers instead of manufacturing its own hardware. The company has partnered with renowned companies like Delphi, the largest producer globally of audio systems for automobiles, Clarion, Audiovox, JVC, Kenwood, and Sanyo. These partnerships provide Sirius with the marketing and manufacturing expertise it needs, enabling them to reach millions of new car and truck buyers every year.
Additionally, Sirius offers plug and play units that allow the receiver to easily and inexpensively be transferred between vehicles and homes. In addition, Sirius has partnered with DISH Network satellite TV, expanding its service to over 10 million satellite TV viewers. These marketing strategies will contribute to rapid growth and an increase in Sirius’s subscriber base, positioning it to capture a larger share of the satellite radio market. It is worth noting that starting a satellite radio company requires a significant amount of capital, as demonstrated when Sirius conducted its first initial public offering in September 1994, selling 2 million common shares at $10 per share (LexisNexis).
Sirius now has more than 1.25 billion shares outstanding from five public offerings, which have raised around $500 million for the company. Additionally, company insiders hold over 17 million shares, worth nearly $100 million. To ensure future financing, Sirius has secured investments from two major institutional investors. DaimlerChrysler invested $100 million, while Ford Motors invested $20 million. Despite having raised a significant amount of cash, Sirius still holds $500 million in cash reserves.
On September 29, 2004, Bob Peck from Bear Sterns upgraded Sirius stock and predicted that it would reach $5 per share by the end of the year (source: American Intelligence Wire Christine Romans, November 1, 2004). Additionally, David Kestenbaum, an IRG Research Analyst, raised his year-end price target from $4.5 to $6.75 (source: American Intelligence Wire, November 23, 2004).
On November 26, 2004 Sirius traded at $6.51/share, surpassing certain analyst estimates. Analysts credit Sirius for the growth in subscribers and emphasize the essentiality of expanding the company’s subscriber base for its survival. According to Lexis Nexis, Sirius reduced its breakeven estimate from 3 million subscribers to 2 million subscribers. While Sirius does generate revenue from activation fees, advertising sales on non-music channels, and direct sales of radios and accessories, subscription revenue remains the primary income source. Sirius has recently committed to investing $700 million dollars in upgrading programming.
XM SATELLITE RADIO CORPORATION
HistoryXM, previously known as American Mobile Radio Corp. (AMRC), was founded on June 6, 1992, with the aim of offering a nationwide audio service featuring excellent digital sound and diverse programming (XM History). On April 1, 1997, an opportunity arose when the Digital Audio Radio Service (DARS) and the Federal Communications Commission (FCC) sold off 12.5 Mhz of S band (Satellite) frequency through an auction. The bidding process began at $8 million and lasted for several days, resulting in bids that surpassed $80 million. Ultimately, AMRC and CD Radio Inc. emerged as the winners of this auction (Behrens, 1997). Despite facing substantial initial costs, AMRC invested $89.9 million to spearhead this entirely new industry.
AMRC acquired the license to broadcast satellite radio approximately one year ago. They then contracted with Hughes (now Boeing Space Systems) to create and launch two 702 satellites named Rock and Roll. Boeing is a renowned aerospace company that specializes in commercial and military aircraft, satellite, and rock manufacturing. ST Microelectronics was enlisted by AMRC for the development of receivers and chip sets. ST Microelectronics is a company that specializes in semiconductors and has expertise in flash memory and peripherals. They are credited with developing the first-ever chip set for automotive use (XM History). This whole endeavor is associated with XM Satellite Radio Holdings, Inc.
AMRC was engaged in a competition with CD Radio, Inc., the only other company authorized by DARS and the FCC. The company underwent changes, appointing Hugh Panero as CEO & President and renaming itself from AMRC to XM Satellite Holdings, Inc. (XM). Startup expenses were being offset by financial support from private investors, including a $250 million investment from companies such as General Motors (GM), Direct TV, and Clear Channel Communications. XM required additional funding to continue its mission. On October 5, 1999, XM initiated its initial public offering by offering 10,000,000 shares to the general public at $12 each.
Soon after XM relocated to their current corporate headquarters in Washington, D.C., which is a cutting-edge 150,000 square foot facility housing 82 all-digital studios. In addition to this site, XM also operates broadcasting facilities in Nashville TN, Boca Raton FL, Southfield MI, and Yokohama Japan. These various locations allow XM to offer its customers over 120 channels of programming. XM focused on nurturing their own talent pool and formed a team that they believed would deliver a groundbreaking audio experience for the nation. (XM History).
Partnerships with hardware manufacturers, automobile manufacturers, programming companies, and investors have been sparked by this. DemographicsXM aims to target 200 Million automobile and truck drivers as well as home radio users. Their goal is to capture the declining terrestrial radio users (XM Corp Info).
XM has developed partnerships with automobile companies in order to tap into the large market of 221 million cars on the road in the US. They believe that customers are interested in paying for the necessary hardware and monthly service fees to access advanced audio broadcasting. As of January 1, 2004, XM has acquired 1.37 million subscribers, and this number continues to grow. The customer base has now exceeded 2 million. XM offers a wide range of programming across different genres and has expanded its hardware options to accommodate a larger audience.
PromotionsXM offers a diverse range of 121 channels encompassing music, sports, news, talk, entertainment, and traffic and weather. XM has collaborated with prominent broadcasting companies like Clear Channel Communications and Radio One. The music selection boasts 68 commercial-free channels, span various genres including Country, Hits, Jazz, Urban, Christian, Rock, Classic, Latin, and Dance.
