Satellite-to-Car Radio Deals Announced

Earlier this month, DirecTV announced that it is investing $50 million in XM Satellite Radio in an effort to capitalize on direct satellite-to-receiver broadcasting technology, which is intended to provide listeners in the car and at home with up to 100 channels of music, news, and entertainment available in North America. Additional XM investors include General Motors, Clear Channel Communications, and a private investment group.

XM reports that it has signed more than a dozen programming deals to provide content for the service, and plans more agreements in the future. According to the company, subscribers will pick up the XM signal using one of four receiver/antenna configurations: a portable adapter for existing car radios; an AM/FM/XM replacement radio, available in the car accessory aftermarket; an audio system factory- or dealer-installed in new-model cars; and portable radios and component audio systems for the home and office.

XM plans to begin its operations at the end of 2000, with commercial service available in the US in 2001. GM says it will exclusively distribute and market XM service in GM vehicles, and will factory-install AM/FM/XM-compatible radios manufactured by XM's consumer-electronics partners in both cars and trucks. The service is expected to cost less than $10 a month.

Hugh Panero of XM states that "Our business is delivering satellite digital radio primarily to the car, where most radio listening is done, and DirecTV, with its experience and expertise in delivering digital television programming via satellite, will be a valued strategic partner." Eddy W. Hartenstein, president of DirecTV, comments that "XM will offer commuters fresh, new satellite-direct audio entertainment options, much like DirecTV has done in delivering choices in multichannel entertainment to millions of households across the country."

Other contenders for the satellite-to-car radio market include CD Radio, which recently announced a deal with Public Radio International to create a 24-hour news, information, and entertainment channel. PRI says that the content will be developed in cooperation with public radio stations and independent producers nationwide.

Like XM, CD Radio is building a digital satellite radio system that will broadcast up to 100 channels of music and other programming to motorists throughout the US. The company plans to offer 50 channels of commercial-free music and up to 50 channels of news, sports, and entertainment programming for a monthly subscription fee of $9.95. Commercial operations are scheduled to commence at the end of the fourth quarter of 2000. The first of CD Radio's three satellites, which are currently under construction by Space Systems/Loral, is scheduled for launch in January.