 |
||||||||||||||||||
 |
 |
 |
 |
 |
||||||||||||||
a song Satellite radio is a breath of fresh air to the AM/FM disenfranchised J201 Reporter
Mark Kratz used to sit in traffic for hours during his weekly trips from Southern Indiana to Chicago. His frustration mounted as the normally four-hour trip turned into six and sometimes even seven hours because he did not know where traffic jams would occur. Corey Schlegel always had a difficult time balancing
her portable CD player in one hand and the reins to her horse in the other. Her irritation was compounded after she fell off of her horse last fall while attempting to pause the CD. Mitch Greenfield knew he wanted to be a web developer for a nationally renowned company and help college music artists be recognized. Last year, he began working for CultureU.org and nearly accomplished his dream. The only thing missing was the national audience.
Today, Kratz's drive never takes more than five hours, Schlegel can listen to any type of music she wishes and hold the reins with both hands, and Greenfield is on his way to introducing the nation to these audiences. All three have discovered the unique benefits of satellite radio.
In a world becoming increasingly dependent on technology, satellite radio sales are booming. Increased convenience, accessibility and popularity are driving consumers to join the satellite radio craze.
While consumers are discovering numerous uses for satellite radio, leading satellite radio providers XM and Sirius are searching for ways to increase their sales. With amplified subscription rates surging from barely one million subscribers in 2003 to over three million in 2004, satellite radio is evidently here to stay.
In 1992, the FCC began to offer broadcasting licenses on the satellite spectrum known as the “S” band. In 1997, two companies each paid over $80 million for broadcast licenses.
American Mobile Radio, now known as XM Radio, developed two satellites named Rock and Roll. The satellites are placed in orbit and send signals throughout North America. CD Radio, now known as Sirius Radio, chose to place three satellites in orbit to ensure that one satellite is over the United States at all times. The satellites are capable of sending signals to a receiver over 22,000 miles away. This compares to the 30-to-40 mile range of some AM/FM stations.
On Sept. 25, 2001, XM Radio began broadcasting in the United States. The Washington, D.C. company soon accompanied New York-based Sirius Radio, which launched on July 1, 2002.
Satellite radio is a worldwide phenomenon. In 1999, WorldSpace began broadcasting in the Eastern hemisphere. The company developed much of the technology used by XM and Sirius today.
Both companies use cell phone towers, known as land repeaters in the satellite radio world, to ensure quality reception in almost all areas of the United States. With a mere four-second delay, satellite radio signals are sent to receivers in cars, boats, homes and even the wild.
Satellite in the palm of your hand… When satellite radio sales began with XM's launch in 2001, the only way to have the service was to purchase a large receiver for an automobile. The receiver then had to be installed and replaced the entire stereo system in a car. Today, however, satellite radio receivers can fit in the palm of your hand.
The current product on the market is the Delphi MyFi Portable XM Satellite Radio, the only member of the XM2go family available for sale. Both USAToday and Businessweek named the Delphi MyFi one of the top consumer electronic products of the year shortly following its release in December 2004.
The Delphi MyFi weighs seven ounces and is equipped with an internal antenna, 120 channels of music and a rechargeable battery. The MyFi allows users to record up to five hours of their favorite songs and is equipped with an FM modulator, allowing XM channels to be heard through any radio with an AM/FM tuner.
Consumers such as Schlegel find the XM2Go to be the perfect accessory for sports and other activities.
“I used to lug around a CD player. Now I can just strap the XM2Go on my arm and go and I still have two free hands. It really is that easy,” Schlegel said.
Others are also realizing the convenience offered by portable satellite radio receivers. Circuit City satellite radio representative Carl Pike said the company is selling almost two XM2Go receivers a day, making it one of the top selling electronic devices.
“I have people who want a radio they can take on their boat, bike or in the car. It's portable and that's all that they care about,” Pike said.
The current XM2Go product costs $350 with prices expected to drop as more products become available. XM has announced the production of two new portable receivers due out early this fall.
In response to the XM2Go, Sirius satellite radio has announced a line called the XACT ReGo. The product, scheduled for release this summer, will be compatible with a compact flash card, allowing users to transfer and play up to four hours of MP3 files from their home computers.
“It's an easy way to listen to the music you love,” Schlegel said. “And it looks pretty cool too.”
It's as easy as getting into a car… Prior to 2002, subscribers to satellite radio had to purchase the receiver and have it installed in their vehicles on their own time. Today, however, automobile manufacturers and car rental companies are offering the system as an option.
Recently, XM added Hyundai to its growing list of auto manufacturers offering satellite radio as a factory-installed option. XM is also available in most new Toyotas and General Motor vehicles for an added cost. Sirius has teamed up with Ford, BMW, Jaguar, Land Rover and Daimler Chrysler to offer its service to new car owners.
“You'd be amazed by how many people want the service. It's like the hot new toy for grownups,” said Kurt Schlinger of Fair Oaks Ford in Naperville, IL. “Once they see it's an option, it's not even a question.”
Satellite radio companies are also noticing this attraction and searching for more ways to make the service accessible to consumers, including installation in rental cars.
For no extra charge, Vanguard Car Rental USA, Inc. is now offering XM in all 2005 Chevy Cobalts, Buick LaCrosses and Pontiac G6s. The subscription costs are being covered by the rental companies with XM-provided discounted group subscription rates to National Car Rental and Alamo Rent-A-Car, both owned by Vanguard. Customers who enjoy the 130 channels of music, news and sportsare offered a discounted activation fee from XM if they choose to purchase the service for their personal use.
“I wouldn't be surprised if eventually this is all cars have,” Schlinger said. “It's too easy to use and too fun to play with to not want it in your car, especially if it's offered when you buy or rent it (the car).” Already winning the popularity contest… Subscription rates for both XM and Sirius prove that satellite radio is becoming increasingly popular. What many fail to realize, however, are the versatile uses for the service.
Kratz, a truck driver for International Trucking, used to dread his drive to Chicago. Despite checking traffic reports and taking the advice of fellow truck drivers, he always seemed to end up in the middle of a jam. Then someone recommended satellite radio as a cure for his traffic conundrum.
“I was wary at first. It was a lot of money for this thing. Then I used the traffic station for the first time and the trip took two hours less than normal,” Kratz said. “I could miss accidents and go around the busy areas. Now I love it.”
Kratz is not alone in his love for satellite radio. XM estimates that over 100,000 truck drivers currently subscribe to its service. With the ability to listen to the same station from coast to coast, it's no wonder America's most-traveled have installed the system in their big rigs.
XM, in fact, has dedicated an entire channel to truck drivers. Known as Open Road, the channel allows truckers to call in with traffic information as well as other miscellaneous information regarding their occupation.
With decreased driving time thanks to up-to-date traffic information, trucking companies are now willing to pay to have the systems installed in their vehicles. U.S. Xpress allows its drivers to purchase satellite radio and a two-month subscription for just $170, almost $200 less than the manufacturer's price.
“I can't imagine driving without it now. In a way, it keeps me company,” said Kratz.
Truck drivers certainly are not the only ones increasing the popularity of satellite radio. Businesses, too, are finding the many advantages of the service.
Greenfield began working for CultureU.org less than two years ago. CultureU.org is a website devoted to promoting culture on college campuses. The site offers student musicians, photographers, painters and fashion designers a place to display their work and, hopefully, get discovered.
As the chief web developer for CultureU.org, Greenfield's current project is working with satellite radio companies to put college artists on a satellite channel. “The thought that you can listen to a station from coast to coast is very powerful. College students deserve the chance to be heard on it too,” Greenfield said.
Acquiring a satellite radio channel would only complement the success CultureU.org is already experiencing. “It will get our name out there and hopefully be a springboard to greater things,” Greenfield said.
While some are using satellite radio to promote their businesses, others are using it for pure entertainment purposes. Sirius recently announced a deal with shock jock Howard Stern as well as the National Football League. In response, XM has signed a contract with Major League Baseball, promising to broadcast every game of the season.
Maybe it isn't for everyone… Despite the $15 billion dollars made by XM and Sirius combined in 2004, some consumers continue to be wary about the service.
“I'm happy with a simple radio. I don't need all the hi-tech fancy stuff that comes with satellite radio,” said construction worker Matt Mulacek. “I just can't see paying $12 a month so I don't have to hear a commercial. I mean, how greedy are we?”
Cost is an issue with many consumers. XM charges $9.99 a month, while Sirius costs $12.95 per month. Car installation can run between $200 and $300, with personal receivers ranging from a $100 boom box to the $350 XM2Go.
Cost certainly is not the only shortcoming of satellite radio. One of the major drawbacks facing consumers is the lack of reception with certain products and in certain areas.
XM2Go owner Travis Frate discovered a problem almost immediately with the device. “It has an antenna built in, but it never works inside. It would be nice if I didn't have to hook up another antenna to it get it to work in my bedroom,” he said.
Others become frustrated with the inability to interchange XM and Sirius receivers. The owner of a BMW with a Sirius receiver built-in cannot subscribe or use XM in the car without paying to uninstall the Sirius receiver and install an XM receiver.
Parents are also finding that satellite radio may not be ideal for children.
“Satellite radio isn't regulated by the FCC,” said Pike. “With Stern and other explicit channels, kids just don't need to be listening to it.”
The lack of FCC regulation also draws many consumers to purchase satellite radio and ultimately has a negative effect on regular AM/FM radio stations. With listeners being able to tune into their favorite sports game or music without interruption on satellite radio, AM/FM stations are seeing a small decrease in listeners.
According to the Annual Report on American Journalism, AM/FM listening has dropped over the past four years from almost 96 percent of people over the age of 12 to nearly 93 percent. While this number may seem small, the rates have been steadily dropping since the introduction of satellite radio in 2001.
But this is just the beginning… Regardless of the drawbacks, satellite radio continues to be an increasingly popular phenomenon. With subscription rates predicted to more than double by the end of 2005 for both XM and Sirius, some are wondering if the increasing sales will ever stop.
Marcus Darsee, a satellite radio technician in Indiana, said his days continue to become busier. With over 22 counties in his district, he travels all over Indiana and up to 300 miles a day.
“I am constantly running to new stores, setting up displays, offering new products,” Darsee said. “I definitely think satellite radio is catching on, and I don't expect it to stop any time soon.”
Would you spend the extra dough on satellite radio?
Page designed and edited by: Ari Jacobovits Last Updated: May 1, 2005 |
||||||||||||||||||
 |
 |
 |
||||||||||||||||
