Satellite Killed the FM Radio Star

State Hornet
Sacramento State University

Those tired of commercially driven radio stations, loaded with everything but music, can sit back and enjoy the clear, commercial free stations of satellite radio.

Satellite radio, an alternative to commercial radio stations, has emerged as the fastest growing electronic medium, surpassing the initial growth of cell phones and PDAs. According to recent reports from both Sirius Satellite Radio and XM Satellite Radio, an estimated 9 million people will be subscribers to satellite radio by the end of the year. Radio analysts predict that by 2010, subscriber levels will reach 30 million. The announcement made last year that Howard Stern would move his controversial talk show from Infinity Broadcasting to Sirius has Stern followers rejoicing.

An uncensored Stern debuts on Sirius in January. Stern is likely to be as vulgar as ever, considering satellite radio is not held to the same decency standards as commercial radio. The exclusive deal will net Stern $500 million over 5 years after incentives. Stern said in a recent interview with Reuters that the move will allow him to escape the regulations of the FCC. Some feel the signing of Stern will result in a defection of his loyal fan base to satellite radio. According to Sirius, Stern has over 12 million listeners and his main demographic of males ages 18-49 are more likely to spend $12.95 a month for service, to listen to Stern. Sirius is hopeful to acquire a large amount of Stern’s fan base to add to its already growing subscriber base of 2.17 million.

Carol Albe, an undeclared freshman, is one of Stern’s fans. “I will probably have to subscribe because I really enjoy his show,” she said. Albe thinks satellite radio is the way of the future and doesn’t mind paying for it. “I’ve been thinking about signing up and for Stern, I will have to,” Albe said.

Sirius offers 120 channels of music, sports, news, comedy, and talk shows. In addition to the exclusive deal with Stern, Sirius offers an exclusive Eminem channel. Another channel is dedicated solely to Martha Stewart. Skateboarder, Tony Hawk and cyclist Lance Armstrong each have exclusive talk shows as well. Sirius is the satellite radio home to sports such as the NBA, NFL, NCAA March Madness, and horse racing. They also offer many college sports and the NHL, which are also offered by XM.

Sirius’ main competitor, XM, is the larger of the two companies, with just over 5 million subscribers. XM was the first satellite radio company introduced, debuting in late-2001. It offers 150 channels for the same price of $12.95.

XM counteracted the Stern deal by signing notorious talk show hosts Opie & Anthony. The two were kicked off Infinity last year for airing sounds of couples having sex in public places. XM also has exclusive rights to shows from musicians Reba, Ludacris, and talk-show host Ellen Degeneres. XM offers satellite radio broadcasts of sports such as MLB, NASCAR, and golf. They also have rights to the NHL, recently purchasing exclusive rights to them after the 2006-2007 season.

Both companies have deals in place with satellite TV companies to provide commercial free music to their subscribers. Dish Network offers 65 music channels courtesy of Sirius, while DirecTV will begin offering 72 XM channels beginning Nov. 15.

Both companies have battled over content, but each have plenty to offer consumers. Subscription prices as well as receiver prices have made some consumers skeptical.

Sacramento resident, Frank Cater said he won’t be buying satellite radio anytime soon. “The receiver I want costs $300, and I cannot see shelling that kind of money out and then paying a monthly fee for music,” he said. Cater, 23, thinks if prices continue to fall and improvements are made on equipment he may consider a purchase.

Christina Xiang, a junior communications major, said after debating about price, she bought a receiver and signed up for XM radio. “I chose XM because they had a portable receiver for a decent price,” Xiang said. She said she enjoys the quality of the music and the access anywhere to the channels. “With XM, I have access wherever my receiver goes and on the Internet.” The unlimited access to satellite radio is one of its appealing traits. Consumers can place receivers in vehicles, their home, or carry them with them. Both XM and Sirius have exclusive deals with vehicle manufactures to equip new cars with satellite radio receivers. New car buyers are then given a free trial before they decide to continue with service.

Mario Cuellar, 28, was turned onto satellite radio this way: “I felt it was important to have in my car, and I liked it so I subscribed.” Cuellar, who subscribes to XM, is also a Howard Stern fan. “I probably won’t switch to Sirius because I am lazy and don’t want to have to change receivers,” he said.

The impact that satellite radio has had on commercial radio is still debatable. Former San Francisco disc jockey, Mo Deller, believes the impact will be larger in the future. Deller, 45, now resides in Carmichael, and thinks that commercial radio is in trouble, but satellite radio is not nearly as popular as it will be. “Satellite radio is still in its development stages, eventually it will be on par with satellite TV,” Deller said. Can the arrival of Stern only benefit satellite radio? Time will tell if the technology has staying power. “If they continue to sway top level celebrities and sports, then people will be forced to jump on the bandwagon,” Deller said.

Timeline of Stern, Opie and Anthony Satellite Radio Situation

8/15/02 | Opie & Anthony air a couple caught having sex at the Saint Patrick’s Cathedral in New York. (Source: AP wire stories)

8/22/02 | Infinity Broadcasting announces cancellation of Opie & Anthony show, but does not fire them. Infinity pays the rest of their contract until August 2004. (Source: AP Wire)

Late 2002-2004 | Opie & Anthony wait out their contract and speculation about where they will end up occurs.

Late 2003_”Early 2004 | negotiations with both XM and Sirius occur.

10/04 | Howard Stern begins negotiations with both XM Satellite Radio and Sirius Satellite Radio. (Billboard Radio News,

8/1/04 | Opie & Anthony announce a deal with XM Satellite Radio, following the expiration of their Infinity contract. (XM Radio press release)

10/1/04 | Opie & Anthony’s Infinity “No Compete” clause expires. (Opie & Anthony website)

10/4/04 | Opie & Anthony’s first XM radio show airs. (XM Press Release)

10/6/04 | Howard Stern announces his deal with Sirius. (Sirius Press Release)

10/6/04 | Howard Stern announces his deal with Sirius. (Sirius Press Release)