From Las Vegas-Satellite radio operators finalize deals for commercial launch this summer

Satellite radio made a big splash at this month’s Consumer Electronics Show, and depending how the Canadian government responds to these new "death stars", both the receivers and the service could arrive on this side of the border. XM Satellite Radio and Sirius Satellite Radio are preparing for commercial launch this summer across the continental U.S. The annual technology show in Las Vegas provided a perfect venue to promote their new services to brand-name car audio dealers. Some have already signed on to manufacture the receivers, with companies like Pioneer, Alpine, Blaupunkt, Clarion, Delco, Kenwood, Visteon, and Sony set to distribute through retailers like Circuit City by the summer. Sony is also building a receiver for XM that can be moved from the car to the home – though XM acknowledges it’s unlikely to receive the signal in the home unless carefully positioned. The antenna for these devices is about five inches high, and some can be built into the car’s roof. With some of their satellites already in orbit, it appears that both companies are about to become reality – but their success is by no means guaranteed. Each competitor has taken on expensive production demands and massive costs for their satellites and 50-100 terrestrial transmitters (without which they can’t be received in cities). They also need to convince subscribers to pay US$ 9.95/month for the service. One analyst predicts 18 per cent penetration for DARS by 2008. But given that the competition is free over-the-air radio, this prediction could be overly optimistic. Canadian broadcasters could be excused for failing to think that satellite radio is a big threat to their business. A subscriber fee will be the first deterrent, and on top of that, terrestrial repeater stations are needed for urban reception. In Canada, that would require a licence. The possibility of local licensing can’t be ruled out. Industry Canada is currently reviewing these frequencies with an eye to harmonizing them with those in the U.S. The Canadian Broadcasting Corp warns in a recent consultation that any harmonization plan would clear the way for a new grey market in Canada. In comparison, BCE Media recommended that Canadian companies be allowed to partner with U.S. operators to provide satellite radio. Both XM and Sirius will offer up to 100 channels of commercial-free music, news, sports, talk, comedy and other programming. Sirius has signed content deals with House of Blues, A&E, PBS, BBC, Discovery, the Weather Channel, among others. From Death Stars to Death Net Competing with radio from another direction is the new category of Home Component Internet Radio. New players, designed to fit into a stereo system, are appearing with the ability to stream Internet radio stations into the living room without the use of a computer. The Philips FWi100 can stream any of 800 audio sites via a free tuning service operated by IM networks, using its own Ethernet connection and a broadband modem. It’s a complete shelf system with a 3-CD changer and speakers. The Panja Broadband Music Player is a component that tunes web radio through Panja’s subscription "audio blast" service, and can access music from MP3.com or the user’s home computer. The Kerbango 100E is a standalone unit that looks like a 1950s radio, complete with rotary volume control and preset buttons. Scores of other manufacturers are also following suit. The concern for radio operators is in the quality of Internet radio, which offers a far better experience than streaming video. But there are limiting factors: the Internet is still less than ideal for serving mass audiences, and most houses won’t have a broadband connection in all rooms for many years. This could change, however, as home networks – an area of considerable innovation, especially in the wireless area – grow in penetration.

From Las Vegas-Satellite radio operators finalize deals for commercial launch this summer

News | 02/01/2001 5:00 am EST

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