Satellite Radio Soars

Florida's Al Horford, left, blocks the shot of Butler's Julian Betko during the second half of an NCAA men's Midwest Regional basketball semifinal in St. Louis, Friday, March 23, 2007. Florida defeated Butler 65-57.
AP Photo/Jeff Roberson
Satellite radio service was launched about two years ago. The satellites beam down over 100 channels of digital sound, blanketing the entire country. The only time these radio stations fade as you drive is when you drive right out of the country.

And, as CBS News Correspondent David Pogue observes, the trend is only likely to intensify.

You can listen to 60 or 70 music stations, each dedicated to a different style of music-gospel, salsa, movie soundtracks, and nonstop dance music-all without ever hearing a single commercial.

You also get about 40 talk-radio stations that cater to every conceivable interest:

Comedy channels, business channels, all-hockey channels, all Catholic channels-for all I know, there's probably an all-Catholic hockey channel.

Of course, you can't listen to all these special channels without a special radio. Some of these models plug into your home stereo. Some go into your car.

And some models are designed to go back and forth between your house and your car.

The receiver will set you back about a hundred dollars and up-way up. But don't put your credit cards away just yet. You also have to sign up for the service, for the low, low price of 10 or 13 dollars a month. Yes, that's right: We've actually entered an age when people will actually pay a monthly fee to listen to the radio.

Still, the 2.1 million people who've signed up so far consider that a small price to pay.

In fact, one satellite radio wasn't enough for Sarkis Hagopian, "I actually have five official subscriptions."

The hard part is choosing between the two companies that offer satellite radio: Sirius and XM.

Each has invested over 2 billion dollars in equipment and satellites, and each is scrambling to sign up listeners-and start breaking even.

200 million cars and trucks on the road today, a built in growth rate of 16 to 17 million new sets each year,

"So is there a market? Sure. Is it huge? Yes. Is there room for two? Absolutely," says Sirius satellite radio's CEO, Joe Clayton.

"It's like we're a married couple," says XM Radio's CEO, Hugh Panero.

He and Clayton have quite a relationship

"We're tough competitors. And when lobbying issues come up in Washington, we're back at the altar," comments Panero.

If you want to know which service is better, these are the guys to ask.

"We clearly are the place to go if you're into sports," says Clayton. " We have the NBA, National Hockey League, and the NFL, National Football League."

"The monthly service is less expensive. It's only $10 a month. You know, theirs is $13," says Panero.

As far as programming goes, Clayton notes, "we have exclusives with National Public Radio channels, Public Radio International, we have The Wall Street Journal."

"Our hardware, our radio equipment, has been lauded as being the top equipment in the business. We've won a number of awards," says Panero.

Clayton: We have a young male channel, we have a female channel, we have a conservative channel, we have a left channel.

Panero: They maybe have 400,000 subscribers right now. We have over-- you know, close to a million seven.

In the end, though, these two companies have a lot in common. For example, each broadcasts from a very expensive, very state-of-the-art facility-XM in Washington, Sirius in New York.

These giant rooftop antennas blast the signal up to the satellites in space. But if you live in a big city, you're probably more interested in these smaller antennas. They're called repeaters. They capture the satellite signal and then rebroadcast it locally, so you don't lose the sound as you cruise through the concrete canyons.

The stars drop by for interviews or performances whenever they're in town.

It's not just a full-blown broadcasting facility; it has also got recording studios.

Each company handpicks music experts like Martin Goldsmith, who became XM's classical-music director after 30 years with National Public Radio, to develop its 100 channels.

"Over the last dozen, 15 years, in commercial radio and in noncommercial terrestrial radio, there have been increasing pressures to play the hits. But here at XM, there are no restrictions whatsoever," says Goldsmith.

And he's not the only happy refugee from traditional radio.

José Mangin, a DJ, programs two heavy-metal music channels for Sirius.

"Me being a metal head since I was a little tiny baby growin' up in Arizona, nine blocks from the Mexican fence, it's like, you know, I grew up with this," says Mangin. "And I really know what's gonna make someone smile in their car, or when someone's gonna say, 'Oh wow, they're playin' that?' That's what I'm looking for, and the feedback that's coming in every day is amazing, all positive, and I wanna cry sometimes."

It's a shame they couldn't find some DJs that are passionate about their work, you know?

So there you have it. Happy customers, happy employees. Everybody's happy.

"And what concerns our radio colleagues of course is satellite radio's obvious violation of FCC rules," says Ed Fritts.

All right, not quite everyone. Ed Fritts is the president of the NAB, the National Association of Broadcasters. You know-traditional radio stations. They are not among the fans of satellite radio-as XM's Hugh Panero knows very well,

"Well, I think the NAB is just an incumbent, you know, lobbying organization that doesn't like competition," says Panero. "As network television didn't particularly like when cable came out, and tried to do as many things as they could to thwart it or kill it."

"Also, the life expectancy of XM satellites has fallen from 17 to less than 7 years. That's why every morning when I get up; I look out the window to make sure an XM satellite is not plummeting toward my roof," says Fritts.

Say what? Falling satellites?

"No. All that's happened is that our satellites were supposed to last-- I don't know, 15, 16 years. And there's an anomaly on the satellite. And what we're doing is, we're launching new satellites faster than we anticipated, and actually want to probably go up by the end of the year," says Panero.

It is true, though, that satellite radio isn't perfect. The music stations don't have ads, but the talk stations do. The music quality is better than FM, but not as good as a CD.

And remember that except in big cities, the radio doesn't work unless its antenna can see the sky. At home, that pretty much means you have to park the radio near a window.

Even so, the two satellite companies are merrily signing up 150,000 new customers a month. And both have big plans for new services.

"Flashing your favorite sports scores on the screen, or your favorite stock quotes, and then down the road is video in the backseat of the car," says Clayton.

This fall, you'll be able to buy a car navigation system that color-codes the roads according to the speed of the traffic, using real-time traffic data from XM satellites.

"It will tell you the average speed of the cars, if there is any construction ahead, and then actually give you alternate routes," says Panero.

So, welcome to the new age of satellite radio. I'd stick around to chat, but-it's time for my favorite show on satellite radio: "All William Shatner, All the Time."
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