Radio Goes Sky-High At Xm Satellite Radio

In 1988, the American Mobile Satellite Corporation (AMSC) was established to provide satellite phone, fax, and data network. The Federal Communications Commission (FCC) decided that there was only one license for such broadcasting and was obliged to have competitors to establish a joint venture. The above-mentioned US Mobile Satellite Company (AMSC) acquired the license. In 1992, CD Radio, later renamed Sirius Satellite Radio, asked the FCC and Congress to review a new digital audio broadcasting service in the United States (Uhle, 1998).

A new type of radio that is becoming increasingly popular is satellite broadcasting. The two largest subscription-based radio services are Sirius Satellite Radio and XM Satellite Radio recently merged into Sirius XM Radio. Unlike terrestrial radio music channels, commercials are free and few commercials on other channels. Satellite broadcasting is not regulated by the FCC. Internet broadcasting and digital streaming service appeared during the advent of the Internet in the 21st century. Popular brands include Pandora and iHeartRadio. Nevertheless, the recording industry considers Internet radio as a threat and is trying to impose a high patent rate on the use of recorded music to prevent independent radio stations from playing popular songs.

Satellite broadcasting is an emerging industry with only one pair of competitors and XM satellite broadcasting is a gorilla of 800 pounds in this emerging market. Four of the five listeners subscribe to XM, which is the highest rated satellite broadcasting service, and in the United States more than 2 million paid users are using it. One of the main advantages of satellite radio is that if an individual prefers one or two channels, they can sound high quality CDs throughout the country. In many cases, this alone proves the validity of the equipment and the subscription fee. In order to allow users to move from one coast to another, XM uses the two most powerful satellites of the entertainment industry (XMRadio.com) suitably named "rock" and "roll" .

Satellite and wireless technologies are gaining great advantage in the fierce competition and trends in the multichannel video market in the United States. Both XM Satellite Radio and Sirius Satellite Radio are exhibiting the latest products in cars, stars, and music-filled stands. Industry leader XM announced that the total number of users as of the end of 2003 was 36 million compared with about 350,000 customers accumulated at the end of 2002. For rival Sirius, the number at the end of 2003 was 261,000. This is because the growth of users in the fourth quarter exceeded the growth of DirecTV, the leader of satellite television service. XM added 430 thousand in the fourth quarter and DirecTV added 45 thousand new users (see figure). XM announced that it will be the first time in the satellite radio industry to display radio services on JetBlue Airways and AirTran Airways flights.