• PC World
• » Home Theater

If two aerospace start-ups have their way, people will soon be listening to satellite broadcast radio while they drive.

Sirius Satellite Radio and XM Radio Holdings 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, says 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," says 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.

Tough Sell?

Still, neither firm has begun to tackle the arduous task of priming auto dealers or consumers for the services they plan to launch, analysts say.

"They'll have to rely on aftermarket sales for the first 18 months," says Sean Badding, an analyst at The Carmel Group in Carmel-by-the-Sea, California, 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 says 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, a division of Paccar in Bellevue, Washington, to provide satellite radios on its 2003 line of custom-built trucks and big rigs.

XM Radio also has agreements with General Motors, Honda Motor in Torrance, California, and Freightliner in Portland, Oregon.

GM, which holds a 23 percent 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 and Ford Motor. 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.

But dealers like Sanderson Ford in Glendale, Ariz., say they don't have plans to install the aftermarket receivers in automobiles, at a cost of $200 to $500. "It's still early to see if demand will develop," says Steve Wendt, a manager at Sanderson Ford.

XM Radio launched its first satellite, called Rock, last month and is expected to launch a second satellite, aptly named Roll, on May 7. XM Radio plans to offer the service to consumers in June. Rival Sirius Satellite put the last of its three satellites into orbit in November but won't launch its service until the end of the year because it wants to undertake some additional software development.

Sirius pledges that its music channels won't contain commercials and that its talk, sports, and news broadcast channels will contain only limited commercial interruptions, Goodnight says.

• See more like this:
• satellite,
• radio,
• music,
• car,
• SiriusSatelliteRadio,
• XMRadio