XM Satellite Radio
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XM Satellite Radio Holdings, Inc.
Type: Public Company
Address: 1500 Eckington Place NE, Washington, D.C. 20002-2194, U.S.A.
Telephone: (202) 380-4000
Toll Free: (866) 962-2557
Fax: (202) 380-4500
Web: http://www.xmradio.com
Employees: 500
Sales: $244.4 million (2004)
Stock Exchanges: NASDAQ
Ticker Symbol: XMSR
Incorporated: 1992 as American Mobile Radio Corporation
NAIC: 515112 Radio Stations; 517410 Satellite Telecommunications
XM Satellite Radio Holdings, Inc. broadcasts more than 120 channels of digital radio via satellite to subscribers throughout the United States. The company's programming includes nearly 70 channels of commercial-free music and more than 50 of news, sports, and talk. Its offerings range from broadcasts of Major League Baseball and NASCAR events to channels featuring content from CNN, Playboy, MTV, ABC News, Disney, Sesame Street, and Discovery. XM's's broadcasts are beamed from two satellites to more than three million subscribers who pay a monthly fee of $9.95. Automakers including General Motors, Honda, and Toyota offer XM-ready radios as options, and the company has gained half of its subscribers through installations in vehicles. Others listen via XM-ready boomboxes or personal stereos, and over the Internet. XM has also created a radio channel for the Starbucks coffee shop chain, and provides data services such as traffic information for Cadillac and Acura owners.
The origins of XM Satellite Radio date to 1988, when a consortium was formed to buy a license for satellite broadcasting of telephone, fax, and data signals. It was made up of eight organizations including Hughes Aircraft Co., McCaw Communications, Inc., and Mobile Telecommunications Technologies Corp. The U.S. Federal Communications Commission (FCC) had ruled that sufficient bandwidth existed for only one license to be issued for such broadcasting, which forced the competing firms to form the joint venture. It was named American Mobile Satellite Corporation (AMSC).
In 1990 AMSC announced that a $100 million satellite would be built for it by Hughes and launched by the mid-1990s. Before that took place, the firm would lease space on other satellites for its data transmission services. The company was also looking into offering other satellite-based services, and in June 1992 formed a unit called American Mobile Radio Corporation to develop a satellite-based digital radio broadcasting service. In December 1993 AMSC went public on the NASDAQ.
AMSC's first satellite was launched in April 1995 from Cape Canaveral. The company was now planning to offer a bulky $2,000 satellite telephone to customers which would work anywhere in the United States. The growth of cellular telephone networks was mushrooming at this time, however, and the usefulness of AMSC's phone service was decreasing almost daily. As a result, the firm signed up far fewer customers than expected, primarily trucking companies, boaters, and airplane owners.
In April 1996 AMSC reported that it was close to bankruptcy, but it was bailed out when Hughes and several other firms granted it a $225 million line of credit. In the spring and summer there were a number of management changes, with new board members, a new chief financial officer, a new chairman, and a new CEO in Gary Parsons, who had been recruited from MCI Communications Corp.
In 1997 AMSC's radio unit spent $89.9 million to buy an FCC license to broadcast digital radio by satellite. It was one of just two licenses the agency granted, the other going to a firm called CD Radio, Inc., which had been working since 1990 on developing the digital radio concept.
In 1998 AMSC hired former journalist, Time Warner Cable executive, and Request TV head Hugh Panero to run its radio unit, with Gary Parsons serving as its chairman. Shortly after being hired, Panero renamed the operation XM Satellite Radio. In June 1999 XM received a $250 million investment in the form of convertible debt from General Motors, DirecTV, Inc., Clear Channel Communications, Inc., and three investment firms. The company was now planning to launch two stationary satellites which would beam down signals to listeners across the United States. In large cities, where the signal would be impaired by tall buildings, XM planned a network of 1,700 repeating towers to ensure uninterrupted coverage.
In October 1999 AMSC spun off XM Satellite Radio Holdings, Inc. via an initial public offering of stock on the NASDAQ. The sale raised nearly $110 million of the $1 billion it anticipated spending to build a satellite network. AMSC would retain 17 million shares of its stock and controlling interest in the firm. XM hoped to begin broadcasting in 2001, following the anticipated start of rival Sirius (formerly known as CD Radio), which was planning to launch its satellites during 2000.
XM soon leased an old, unused printing plant building in Washington, D.C., and spent $62 million to renovate it. The company's new headquarters would house 82 digital studios, one of which was large enough to record a full orchestra, as well as providing space for the 400 employees the firm was planning to hire.
To put together the 100-plus channels it would offer, XM hired well-known FM radio consultant Lee Abrams. Famed for developing the research-based approach to radio programming which had helped make FM radio both immensely popular and highly profitable (but also increasingly homogenous and stale, according to critics), Abrams had recently quit the business out of his own frustration over the industry's focus on the bottom line at the expense of creativity and quality. Asked to recommend someone to head XM's programming department, he became excited by the opportunity it offered, and took the job himself.
Abrams soon began working to create a diverse range of programming that would enable it to entice listeners to pay a $9.99 monthly fee, as well as $300 for a digital radio. To CEO Panero, it was important that the channel lineup consist of more than just a library of CDs set to shuffle play mode. He told the Washington Post, "We have to make this real and authentic, so that on the blues channel you feel like you're in a blues club drinking whiskey, and on a classical channel you feel like you're in a symphony hall."
For XM's music stations, Abrams hired experienced hands like Bobby "The Mighty Burner" Bennett, a popular rhythm and blues disc jockey of the 1960s, who would program soul music for an XM channel devoted to that genre, as well as doing a show of his own. Other channels were devoted to the music of each decade between the 1940s and 1990s, as well as various forms of rock, country, jazz, and classical music. The firm was also starting to sign up outside providers such as Discovery Communications, Inc., the Associated Press, and Bloomberg to provide content for its talk channels.
In the fall of 2000 the company began preparing for the launch of its two satellites, which had been christened "Rock" and "Roll." The first was scheduled to take off on Elvis Presley's 66th birthday, January 8, 2001, but its countdown was halted just 11 seconds before liftoff when a minor technical glitch was discovered. On March 18 it successfully reached a stationary orbit 22,236 miles above Texas, and the second satellite was launched in May. XM was now seeking additional funding, and sold $201 million in stock and notes to pay for operational expenses until broadcasting could begin.
Deals continued to be signed for content, and the company reached agreements with ABC Radio Networks and affiliate Disney, MTV Networks, CNN, and USA Today. Some of the informational channels would be heard on both XM and rival Sirius, while others were exclusive to XM. The company was also working with retailers including Best Buy, Circuit City, and Sears to sell its radios.
The company was now planning to begin broadcasting on September 12, 2001, to Dallas and San Diego. A $100 million advertising campaign was launched in August with movie trailer spots depicting David Bowie, B.B King, and rapper Snoop Dogg falling from the sky along with piles of musical instruments.
On September 11, 2001, as company officials flew to the firm's first two broadcast cities, terrorists crashed planes into buildings in New York City and Washington, D.C. In the aftermath of the attacks, in which numerous people had fallen to their deaths at the World Trade Center, XM's ads were pulled and re-edited, and the company's broadcast launch was put on hold for two weeks. It officially debuted on September 25, and by October XM's signal extended to the entire Southwest. On November 12, it was available from coast to coast.
In late September the firm had discovered that, due to a manufacturing defect, its satellites would have shorter lifespans than the 12 to 15 years originally anticipated. The company soon announced that it would need to raise an additional $250 million to $300 million to continue operating, and it scaled back its ad campaign and cut other costs. XM subsequently restructured $31 million in debt, got a loan for $35 million, and raised $129 million through a new offering of stock. It was the fifth time the company had issued stock.
By the end of 2001, XM had signed up close to 30,000 subscribers. Though it had been perceived as the "Johnny Come Lately" of digital satellite radio, competitor Sirius was still not on the air because of problems with the microchip sets in its radios, and XM was winning major kudos in the media, with Fortune magazine calling its radio service the product of the year and Time honoring it as the invention of the year. The total amount invested in XM now stood at $1.4 billion.
XM's radios were initially sold as aftermarket items for cars, built by Sanyo, Pioneer, and others, but they were soon offered as options on 2002 Cadillac Seville and Deville models. Though Cadillac maker GM was a major shareholder in the firm, XM paid part of the cost of each radio it installed, as well as for the associated advertising. In February 2002 XM reached an agreement with satellite television broadcaster and 10 percent stakeholder DirecTV to offer the radio service to its viewers.
By June 2002 XM had signed up 135,000 subscribers. The firm was still recording heavy losses, however, and in November laid off 80 of its workforce of 480. It also adjusted its programming lineup, dropping teen talk channel BabbleOn and USA Today News, and adding an audio feed of CNN's television broadcast and XM Live, which featured concert recordings, some done in the company's studios. The firm was also preparing to offer a premium-priced service for an additional $2.99 per month that was programmed by Playboy and featured sexually explicit talk.
In late December 2002 XM cut a deal with its major stakeholders including GM, American Honda Motor Co., and Hughes Electronics Corporation for $475 million in new funding from debt deferral and the sale of stock. The stake owned by GM and affiliates Hughes and DirecTV would rise to 19.6 percent, while Honda would own 8.3 percent.
Aftermarket XM radios now cost $200, and Wal-Mart had made a commitment to begin selling them in 2003, while car rental firm Avis was offering XM in its cars for $3 per day. The radios were available in three-quarters of GM vehicles as factory-installed options, for a price of $150 to $300. For fiscal 2002 the firm reported sales of $20.2 million and a loss of $495 million.
In April 2003 XM signed up its 500,000th subscriber, while announcing new deals to put its radios in Toyota and Audi cars. In August the company reported that a $400 million insurance claim for the defects in its satellites had been denied, though it continued to seek restitution. Following this setback, the firm raised an additional $150 million from the sale of 11 million new shares of stock. The money would be used to build a new $130 million spare satellite, as the existing spare would have to be launched in 2004 at a cost of some $190 million.
The end of 2003 saw XM's subscriber base grow to 1.36 million, five times that of rival Sirius. In early 2004 the company announced that it would begin broadcasting local traffic and weather information in 21 U.S. cities. The move was protested by the National Association of Broadcasters (NAB), who contended it violated the company's license to provide only a national radio service. The FCC did not interfere, however, as the channels were broadcast to the entire country.
The NAB was one of the most powerful lobbying groups in Washington, and had managed to place numerous restrictions on satellite broadcasters, including forcing them to pay performer royalties in addition to songwriter royalties. As a result, XM was spending an estimated $10 million per year on the former, in addition to the hefty amount it paid songwriter agencies BMI and ASCAP. Though AM and FM radio operators had for many years paid songwriters, they were not required to pay performers.
The first quarter of 2004 saw XM's revenues exceed fixed costs for the first time, though the company continued to lose money overall. The cost of adding a subscriber had dropped to $106 from $156 a year earlier, much less than what Sirius was spending. In May, new TV ads were launched to coincide with the annual surge in electronics sales tied to Father's Day and high school and college graduation.
In the summer, XM signed popular National Public Radio host Bob Edwards, who had been let go after nearly 25 years as anchor of the network's Morning Edition program. Many listeners had been angered by the move including CEO Panero, who made Edwards an offer to work for XM. Although rival Sirius had an exclusive contract to broadcast the programs of National Public Radio, XM was licensing content from other educational radio firms including Public Radio International, WBUR in Boston, and American Public Media. In the fall, a new "shock jock" morning talk team, Opie and Anthony, were added to the company's offerings, at the same time that rival Sirius signed controversial talk-show host Howard Stern to a five-year, $500 million deal which would start in January 2006.
In October 2004 XM signed a $650 million, 11-year agreement with Major League Baseball. The company would broadcast all of the games played during the season, devoting as many as 15 of its channels to them when all 30 teams played on a given day, with an additional baseball channel featuring archival and Spanish-language games. The broadcasts would use the established radio voices of each home team, who would continue to be heard on regular radio.
October also saw the introduction of the $350 Delphi XM MyFi. A small, personal-sized unit akin to a Walkman, it could pick up XM's signal and also record up to five hours of programs. Television ads featuring rock star Elton John hawked the new item. Competitor Sirius was reportedly still months away from offering such a product.
XM's receivers had always included a small information screen that showed the artist and song being played, and the firm was now experimenting with new ways to use this function, such as displaying the stock market ticker. XM's service also enabled listeners to select favorite artists or songs, and when one of its channels broadcast them the radio would automatically switch to that station. XM was readying another service called NavTraffic, a continuously updated mapping system that showed traffic problems and suggested alternate routes, initially available for owners of certain Cadillac and Acura models.
The firm was also preparing a dedicated music channel for Starbucks coffee shops, and had begun to offer its programming via the Internet. By the end of 2004, XM boasted more than three million subscribers, triple the count of Sirius. Revenues for the year would hit $244 million. Losses, however, would exceed $642 million. The company's stock price, often volatile, now was in the mid-$30 range, after having reached a low of $1.66 in 2002. During the 2004 model year, GM had installed more than one million XM radios in cars, while Honda had put them in 200,000.
In just over a decade, XM Satellite Radio Holdings, Inc. had spent more than $2 billion putting together a satellite radio service that offered more than 120 channels of music and informational programming. The firm had gotten the jump on rival Sirius Satellite Radio by going on the air first and had built up a sizable subscriber base, but the industry was not yet profitable, and it would take time to see whether XM's business plan was truly viable.
Principal Subsidiaries
XM Satellite Radio Inc.; XM Equipment Leasing LLC.
Principal Competitors
Sirius Satellite Radio, Inc.; Clear Channel Communications, Inc.; Infinity Broadcasting; DMX Music, Inc.
Further Reading
Adelson, Andrea, "Coming Soon to a Radio Near You," New York Times, December 28, 1998, p. C6.
Ahrens, Frank, "Can XM Put Radio Back Together Again?," Washington Post, January 19, 2003, p. W12.
Brull, Steven V., "The Cable TV of Radio? Satellite Audio Could Be the Next Big Thing--Or a Big Flop," Business Week, January 31, 2000, p. 96.
Feder, Barnaby, "A New Temptation for the Ears, Via Satellite," New York Times, June 2, 2002, p. C9.
------ , "Satellite Radio Gains Ground with Right Mix of Partners," New York Times, April 21, 2003, p. C1.
"Fledgling Satellite Radio Providers Incur Setbacks with Launch and Chipset Delays," Satellite News, January 15, 2001, p. 1.
Frey, Jennifer, "Former NPR Host Bob Edwards to Be XM's New Morning Host," Washington Post, July 29, 2004, p. A1.
Irwin, Neil, "XM Radio Turns It On," Washington Post, September 10, 2001, p. E1.
Knight, Jerry, "CD Radio, XM Satellite Tune Up for Pay-to-Listen Programs," Washington Post, June 28, 1999, p. F7.
------, "Picking Up a Stronger Signal on XM," Washington Post, September 9, 2002, p. E1.
------, "Rivals in the Satellite-Radio Business Share Brunt of Wall Street's Wariness," Washington Post, April 9, 2001, p. E1.
Markels, Alex, "100 Channels, But Where Are the Subscribers?," New York Times, November 3, 2002, p. C4.
McLean, Bethany, "Satellite Killed the Radio Star," Fortune, January 22, 2001, p. 94.
Merle, Renae, "XM Faces a Rough Start," Washington Post, October 10, 2001, p. E5.
Mills, Mike, "The Launch That Languished: American Mobile Satellite Struggles to Catch Up," Washington Post, October 21, 1996, p. F19.
"Nationwide Radio Stations on Way," Pittsburgh Post-Gazette, May 5, 1996, p. A7.
Shin, Annys, "At XM, Boldly Going; Under Hugh Panero, Satellite Radio Is a Hit," Washington Post, November 29, 2004, p. E1.
"Sirius Radio and XM Radio Form Alliance," Satellite Today, February 17, 2000, p. 1.
Steinberg, Brian, "Satellite-Radio Firms Prepare for 2000 Launch," Wall Street Journal, January 25, 1999, p. 1.
Wooley, Scott, "Broadcast Bullies," Forbes, September 6, 2004, p. 134.
— Frank Uhle
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XM Satellite Radio
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XM Satellite Radio
"XM" redirects here. For other uses, see XM (disambiguation).
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This article is outdated. Please update this article to reflect recent events or newly available information. Please see the talk page for more information. (November 2010) |
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| Type | Division of Sirius XM Radio |
|---|---|
| Industry | Radio broadcasting |
| Founded | 1992 (as American Mobile Radio Corporation) 2001 (as XM Satellite Radio) |
| Headquarters | Washington, D.C., U.S. |
| Products | Satellite radio |
| Parent | Sirius XM Radio |
| Website | SiriusXM.com |
XM Satellite Radio (XM) is one of two satellite radio (SDARS) services in the United States and Canada, operated by Sirius XM Radio. It provides pay-for-service radio, analogous to cable television. Its service includes 73 different music channels, 39 news, sports, talk and entertainment channels, 21 regional traffic and weather channels and 23 play-by-play sports channels. XM channels are identified by Arbitron with the label "XM" (e.g. "XM32").
The company has its origins in the 1988 formation of the American Mobile Satellite Corporation (AMSC), a consortium of several organizations originally dedicated to satellite broadcasting of telephone, fax, and data signals. In 1992, AMSC established a unit called the American Mobile Radio Corporation dedicated to developing a satellite-based digital radio service; this was spun off as XM Satellite Radio Holdings, Inc. in 1999. The satellite service was set to officially launch on September 12, 2001, however, due to the September 11 attacks, the decision was made to postpone the official launch date to September 25, 2001.
On July 29, 2008, XM and former competitor Sirius Satellite Radio formally completed their merger, following U.S. Federal Communications Commission (FCC) approval, forming Sirius XM Radio, Inc. with XM Satellite Radio, Inc. as its subsidiary.[1] On November 12, 2008, Sirius and XM began broadcasting with their new, combined channel lineups.[2] On January 13, 2011, XM Satellite Radio, Inc. was dissolved as a separate entity and merged into Sirius XM Radio, Inc.[3] Prior to its merger with Sirius, XM was the largest satellite radio company in the United States.
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Services
While the satellite receiver radio service is its primary product, XM operates several audio and data services, and advertising.
Satellite radio
XM's primary business is satellite radio entertainment. XM carries music, news (both simulcast and syndicated programming), sports, talk radio, comedy (both stand-up and radio shows), and even radio drama. In addition, XM broadcasts local weather and traffic conditions in its larger markets. The channel lineup is available on-line.
To receive satellite radio programming, a customer is required to purchase a receiver. Prices range from less than $50 to over $200. With a service commitment, it's possible to get a simple receiver for free. Monthly packages start at US$12.95/month with add-on "family" radios at US$8.99/month. Best-of-Sirius is available on US accounts for an additional monthly fee. Lifetime packages are also available (USA only). Channel quality is two flavors, stereo music channels at 39 kbit/s and mono talk channels at 16 kbit/s using proprietary compression. Many subscribers have complained about the low quality of satellite radio sound. But providers have stuck with the plan for more channels instead of better quality. HD terrestrial digital radio, a competitor has always used this difference as a selling point.
There are currently several types of receivers available to consumers:
- Plug and Play receivers: The receiver snaps in to a base unit, which provides power, antenna, and audio connections. Multiple base units can be installed in the home or car, and portable boom-box style units allow the plug and play receivers to be used outdoors. This is typically the least expensive option. Examples include the Xpress line, and the Delphi Skyfi.
- In-dash receivers: These are integrated with a car's stereo system. Many factory stereo systems include XM or Sirius radio, and the more popular aftermarket stereo brands all have options to connect satellite radio receivers.
- Desktop receivers and Home theater systems: Manufacturers are now offering several XM Ready systems. These use an external tuner which can connect to the head unit. These range from small clock-radio systems to powerful home theater receivers.
- Portable personal systems: XM has offered portability kits for various receivers in the past. It also currently offers the Helix and Inno, which are self-contained and can play both live XM and recorded content with no external antennas.
XM also offers music downloads through XM+Napster for Windows users. This service is being integrated with XM Online and the new MP3 capable XM receivers, such as the Pioneer Inno or the Samsung Helix.
Several music channels of XM radio can also be received on the Dish Network satellite network. To listen to XM on the Dish Network, no XM subscription is required, but you must have a Dish Network subscription. DirecTV removed retransmitting XM music channels on February 9, 2010, replacing its offering with SonicTap.
XM also offers many of its stations to subscribers via the Internet. Most of its original programming is available, but the syndicated and simulcast channels are typically not included.
XM Radio Online
|XM Radio Online (XMRO), XM's Internet radio product, offers many of XM's music stations and can be accessed from any Internet connected Windows or Macintosh computer, or via the iPhone/iPod Touch SIRIUS XM app. Prior to March 11, 2009, XMRO was included with XM Radio subscriptions, or was available separately for $7.99/month to Internet-only subscribers.
XM Radio upgraded its online audio sound on March 11, 2009.[citation needed] Customers with existing subscriptions were downgraded from the 64 kbit/s stream to a lower quality 32 kbit/s stream for the duration of their subscription contract. However, as part of the upgraded audio stream, XMRO became available as a $2.99/month add-on service with a satellite radio subscription, or as a stand-alone Internet-only service at $12.99/month. The premium subscription stream is offered to XMRO subscribers as a "near CD-quality" 128 kbit/s. The online player is Java-based and uses Microsoft's WMA file format.
Weather and traffic
XM also provides data services such as weather information for pilots and weather spotters through its XM WX Satellite Weather datacasting service. This up to the minute weather information can be displayed in the cockpit of an aircraft equipped with a satellite weather receiver. Unlike weather radar, which relies on the aircraft's own equipment, the satellite service can give a pilot information about weather anywhere in USA and Canada. The downside is that the various weather streams (radar, cloud coverage, lightning, forecast, TAF, FA, etc...) takes around 15 minutes to complete the data download, meaning that the information can somewhat be out-of-date by the time it is shown. In-cockpit radar and lightning receivers return truly realtime information, but they can cost many thousands of dollars, and do not provide forecasts and complete weather reports. FAA Temporary Flight Restrictions ( TFRs) are also available and shown. Certain aircraft are also now integrating the XM radio service in to the aircraft's audio system, as well, allowing passengers to listen to XM radio while flying.[4][5]
XM also has dedicated traffic and weather channels that cover many major metropolitan areas. These channels play a continuous loop of local weather information and detailed traffic data.
Commercial adoption and partnerships
In 2005, AirTran Airways began putting XM Satellite Radio on their aircraft, while in January 2006, JetBlue Airways added XM Radio to their aircraft. United Airlines started carrying prerecorded XM content in March 2006. Zipcar, an urban car-sharing service in the United States, initially installed XM receivers in all of their vehicles available for daily or hourly rental. However, citing uncertainty in the satellite radio market, Zipcar announced on May 1, 2007 that all XM radios would be removed from its fleet in the following months.
In 2006, the service "XM for Business" was launched on the DirecTV platform to provide 15 channels of interruption-free background music. This service replaces the Music Choice business audio service formerly offered by DirecTV. The XM for Business channels are in the upper 500s as of August 2006 and include an exclusive "Taste of Italy" channel. The channels are programmed separately from the consumer service, but share the same names, themes, and playlists. More importantly for the background music needs of business audio these channels do not feature any kind of interruption and do not feature radio hosts, imaging, or sounders.
Effective October 1, 2006, the 15 channels of interruption-free background music, formerly part of "XM for Business", were moved from satellite 101 to satellite 119 (DirecTV-7S at 119°W). Reception now requires a single 18" dish aimed at 119°W or a Phase3 oval dish with three LNBFs and a multi-satellite-capable receiver. Older, single LNB receivers may not be able to receive these stations.[citation needed]
In 2007, Air Canada began replacing its current generation of EnRoute radio with XM. As with United, this is prerecorded content.
Customer Service
In contrast to its high-quality broadcasts, Sirius/XM's customer service has drawn fire from some State governments. In October 2010, Richard Cordray, Ohio's Attorney General, began investigating complaints regarding Sirius XM's policies on billing, customer solicitation as well as subscription renewals and cancellations. The company informed shareholders of the probe shortly thereafter. According to news reports, Arizona, Connecticut, Tennessee, Vermont, and the District of Columbia have expressed interest in participating in the inquiry.
According to Reuters, "The investigations come as Sirius XM, home to programs by Howard Stern and Oprah Winfrey, has found its footing and distanced itself from years of huge losses and questions about its business model."[6]
In a report obtained in March 2011, The Better Business Bureau reported receiving over 4500 complaints against Sirius XM in the preceding 36 months, around half of which regarded the company's billing and collection practices. [7]
In Missouri, some people registered on the state's do-not-call list have complained about receiving repeated calls from Sirius XM workers or agents after cancelling their subscriptions. Some Florida customers have reported being billed for automatic renewals of accounts they had canceled. Further, Sirius XM was sued in federal court by a customer accusing it of deceptively raising prices.[6]
The report also stated that "Sirius, in a statement, said it was cooperating with the investigations and that it believed its 'consumer-related practices comply with all applicable federal and state laws and regulations.'"[6]
Exclusive channels
- KISS
- Mix
- Nashville!
- The Pink Channel
- Rock@Random
- Bollywood & Beyond
- Fox Sports Radio
- MLB Play-by-Play
- Extreme Talk
- America's Talk
- Talk Radio
- ATN-Asian Radio
- ReachMD
- XM Scoreboard
- ESPN Xtra
- Calendrier Sportif
- XM Deportivo
- Laugh Attack
- Canada 360
- Quoi de Neuf
Company
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Technology
XM provides digital programming directly from two high-powered satellites in geostationary orbit above the equator: XM Rhythm at 85° west longitude and XM Blues at 115° west longitude[22] in addition to a network of ground-based repeaters. The combination of two satellites and a ground-based repeater network is designed to provide gap-free coverage anywhere within the contiguous U.S., the southern tip of Alaska, and in the southern part of Canada. The signal can also be received in the Caribbean Islands and most of Mexico (reports have stated that areas north of Acapulco are able to receive a steady signal[23]), however XM is not yet licensed for reception by paid subscribers living in these areas.
The original satellites, XM-1 ("Rock") and XM-2 ("Roll") suffer from a generic design fault on the Boeing 702 series of satellites (fogging of the solar panels), which means that their lifetimes will be shortened to approximately six years instead of the design goal of 15 years.[24][25] To compensate for this flaw, XM-3 ("Rhythm") was launched ahead of its planned schedule on February 28, 2005 and moved into XM-1's previous location of 85° WL. XM-1 was then moved to be co-located with XM-2 at 115° WL, where each satellite operated only one transponder (thus broadcasting half the bandwidth each) to conserve energy and cut the power consumption in half while XM-4 ("Blues") was readied for launch. Subsequently, XM launched ground-spare XM-4 ("Blues") ahead of schedule on October 30, 2006 into the 115° WL location to complete the satellite replacement program. On December 15, 2006 XM-1 was then powered down and drifted back to its original location at 85° WL, where it will remain as a backup to XM-3. XM-2 as well was powered down and remains as a backup to XM-4. This makes the current active satellites as XM-3 "Rhythm" and XM-4 "Blues" with two in-orbit spares.[10][26]
On June 7, 2005, Space Systems/Loral announced that it had been awarded a contract for XM-5.[27][28] XM-5 will feature two large unfurlable antennas. Sirius' Radiosat 5, also to be built by Loral, will have a similar single large antenna.
In American and Canadian metropolitan areas, XM and its Canadian licensee known as Canadian Satellite Radio (CSR), own and operate a network of approximately 900 terrestrial repeater stations, meant to compensate for satellite signal blockage by buildings, tunnels, and bridges. In the United States XM owns and operates approximately 800 repeater sites covering 60 markets; in Canada CSR is installing approximately 80 to 100 repeaters that will be owned and operated by CSR in the 16 largest Canadian cities. The actual number of repeater sites varies as the signal is regularly tested and monitored for optimal performance. The actual number of sites in the United States has dropped from the original 1,000 installed when the service first launched in 2001. The repeaters transmit in the same frequency band as the satellites. A typical city contains 20 or more terrestrial stations. Typically the receiver owner is unaware when a terrestrial station is being used, unless he or she checks antenna information from the receiver being used. Due to a FCC filing in October 2006, the latest list of XM's US terrestrial repeater network was made available to the public.
The XM signal uses 12.5 MHz of the S band: 2332.5 to 2345.0 MHz. XM provides 128 kilobits per second of its bandwidth to OnStar Corporation for use with XM-enabled GM vehicles, regardless of whether their owners are XM subscribers. American Honda also retains the right to some of the company's bandwidth to transmit messages to Acura vehicles via a service known as AcuraLink.
XM NavTraffic, an optional service, transmits coded traffic information directly to vehicle navigation systems using TMC technology.
Audio channels on XM are digitally compressed using the CT-aacPlus (HE-AAC) codec from Coding Technologies for most channels, and the AMBE codec from Digital Voice Systems for some voice channels, including all of the Traffic and Weather channels.
The XM radio signal is broadcast on 6 separate radio carriers within the 12.5 MHz allocation. The entire content of the radio service, including both data and audio content, is represented by only two carriers. The other 4 carriers carry duplicates of the same content to achieve redundancy through signal diversity. The data on each carrier is encoded using time-delayed and error-correction schemes to enhance availability. Effectively the total radio spectrum used for content is a little over 4 MHz.[29]
Each two-carrier group broadcasts 100 8-kilobit-per-second streams in approximately 4 MHz of radio spectrum. These streams are combined using a patented process to form a variable number of channels using a variety of bitrates. Bandwidth is separated into segments of 4-kilobit-per-second virtual "streams" which are combined to form audio and data "channels" of varying bitrates from 4 to 64 kilobits-per-second.[30]
XM preprocesses audio content using Neural Audio processors that are optimized for the aacPlus codec, including spectral band replication (SBR). Audio is stored digitally in Dalet audio library systems using an industry-standard MPEG-1 Layer II at 384 kbit/s, sometimes known as Musicam. The audio is further processed by the Neural Audio processors on the way to broadcast.
Sirius XM Pops a classical music station is broadcast in 5.1 surround sound audio quality. The technology, titled XM HD Surround, is the result of a partnership between XM and Neural Audio Corporation which provides content with six discrete channels of digital audio. XM Live also broadcasts in this format for certain concerts and studio performances. XM manufacturing partners such as Denon, Onkyo, Pioneer Electronics (USA) Inc., and Yamaha have introduced home audio systems capable of playing XM HD Surround.
Controlling interest
The company's May 2004 proxy statement[31] notes that four directors are subject to director designation agreements with GM, American Honda, the chairman, and the CEO. Four additional directors are investors, and two are not affiliated with any significant stockholders.
At that time, GM owned 8.6% of the Class A common stock (a voting percentage of less than 1%) and Honda owned 13% (with a voting percentage of 3.6%).
Unless they unanimously agree otherwise, control of the company remains with the preferred shareholder and noteholders of the company, including Hughes Electronics, GM, Honda, and several private investment groups.
Clear Channel programming agreement
As part of terrestrial radio giant Clear Channel Communications' early investment into XM in 1998, the companies entered into agreements which provided for certain programming and director designation arrangements as long as Clear Channel retained the full amount of its original investment in XM. One positive consequence of this was that XM had (and still has) exclusive programming rights to all Clear Channel content, including popular national shows like Coast to Coast AM, but the shows could only be broadcast inside the bandwidth controlled by Clear Channel. In June 2003, Clear Channel entered into a forward sales agreement relating to its ownership of XM. During the third quarter of 2005, Clear Channel and XM arbitrated the impact of this agreement on the Operational Assistance Agreement and the Director Designation Agreement. The Arbitration Panel decided that the Operational Assistance Agreement would remain in effect, including Clear Channel's right to receive a revenue share of commercial advertising on programming it provides to XM, but declined to enforce the Director Designation Agreement, which forced the Mays family members off the board of directors. Per the original agreement, Clear Channel had the right to program 409.6 kbit/s (or 10%) of XM bandwidth, requiring XM to include commercial advertising on the existing Nashville!, KISS, Mix, and Sunny (now The Music Summit). The amount of advertising on the music channels amounts up to 4 minutes per hour, similar to the amount of advertising XM included before going commercial free. Exceptions include syndicated music shows which carry network spots. Clear Channel advertising on XM is handled by its subsidiary, Premiere Radio Networks. Clear Channel also provided existing talk channel programming (Fox Sports Radio, Extreme XM, Talk Radio). Clear Channel also controlled America Right (formerly Buzz XM), but through a series of show swaps, most non-Clear Channel content was removed and programming control returned to XM Radio. Plans to introduce new regional based talk channels, which would have featured a regional 5 minute newscast for each area of the country, were canceled. Instead Clear Channel chose to introduce other music and talk channels. Newer channels including ReachMD, America's Talk remain on the air. The Pink Channel, National Lampoon Comedy Radio, WSIX-FM, WLW, and Rock@Random were launched and later removed, and replaced by channels like Bollywood & Beyond, The Music Summit, and Sixx Sense, all of which are on the air today.
Seen as a blow to XM's 100% commercial-free music channel status, XM Executive Vice President of Programming Eric Logan released a programming announcement to XM subscribers on the company's website that reiterated XM's commitment to commercial-free music while noting that XM still had the most commercial-free music and that more commercial-free music channels will be added in the near future to ensure that XM will still have more commercial-free music than competitor Sirius Satellite Radio. On April 17, 2006, XM launched US Country (XM17), Flight 26 (XM26), XM Hitlist (XM30) and Escape (XM78) to provide commercial free music in the formats of the Clear Channel programmed music channels which were going to begin airing commercials. In response, Sirius has advertised that they are the only satellite radio provider that has 100% commercial-free music channels. Both XM and Sirius air commercials on their news, talk, and sports channels.
The Clear Channel forward sales agreement with Bear, Stearns & Co. Inc was terminated on August 2, 2006. The termination resulted in Clear Channel Investments, Inc. paying Bear Stearns a total of $83.1 million, which was the value of Clear Channel's stake in XM. The accreted value of the debt was $92.9 million, and the fair value of the collar was an asset of $6.0 million, which resulted in a net gain of $3.8 million for Clear Channel.[32]
XM vs RIAA
In 2006, XM Satellite Radio was sued by the RIAA over XM's new portable devices the Inno and Helix. The RIAA claims these devices are equivalent to a downloading service, whereas XM contends the devices are protected under the 1992 Audio Home Recording Act. In July, XM requested that a federal judge dismiss the case. It should be noted that XM's subscribers can save only songs they hear on the radio and cannot request a specific song to be downloaded or program their radios to record specific artists. XM's portable devices allow the consumer to record a portion of their broadcast much like a VCR, DVR, or cassette player would allow. The content a subscriber records is available only while the subscriber still has an active account with XM Satellite Radio. Once the account is terminated, the recorded content will become inaccessible. Also, If a subscriber fails to listen to a total of 8 hours of programming a month, the recorded content will not be accessible. Recorded content can be accessed only on the portable device; it cannot be transferred to a home computer or separate digital music player.
The idea is not new: TimeTrax Technologies Corporation developed an application to record songs to MP3 and tag them with the artist and title information directly from the XM network. In 2005 XM attempted to thwart this practice by discontinuing the required XM PCR radio. TimeTrax responded by quickly rolling out adaptive interfaces to allow almost any XM subscriber to use their tuner to build music libraries directly from XM broadcasts. There is speculation that these fumbles by XM and its attitude towards the Time Trax technology may have been the warning shot of major troubles between the RIAA and XM.
On January 19, 2007, a district judge ruled that the RIAA could proceed with the lawsuit, rejecting XM's defense that the conduct alleged in the complaint—if proved by the RIAA—would be immune under the Audio Home Recording Act of 1991.[33]
PCR and DirectPCR
At the heart of the TimeTrax controversy was the XM PCR: a computer-controlled XM Receiver. Unlike the other receivers, which could be used in the car or home stereo, the XM PCR required a computer to run. A software application on the computer acted as the radio's controls and display, which led to a flurry of third party developers, who wanted to make a PCR replacement. Many of them received Cease and Desist letters from the XM company. Once the PCR was discontinued, for the reasons listed above, people found that the XM Direct, a receiver intended to be used in satellite-ready car stereos, can be connected to a computer with a very simple adapter cable. Some people have dubbed the entire kit, with receiver, cable, and software, the Direct PCR. While the original PCR software does not control the XM Direct receiver, several community developers have continued to develop PCR replacement software.
Merger with Sirius Satellite Radio
Main article: Sirius XM Radio
On February 19, 2007, XM announced a merger deal with Sirius Satellite Radio. The merger combined the two radio services and created a single Satellite Radio network in the United States and Canada.[13]
The United States Department of Justice announced on March 24, 2008 that it had closed its investigation of the merger because it "concluded that the evidence does not demonstrate that the proposed merger of XM and Sirius was likely to substantially lessen competition."[34]
On June 16, 2008, FCC Chairman Kevin Martin told the Washington Post that he had decided to approve the XM-Sirius Merger after the companies agreed in the previous week to concessions intended to prevent the new company from raising prices or stifling competition. Martin issued an order to approve the merger, according to The Wall Street Journal – setting the stage for a final vote which could have occurred any time after his recommendation was circulated.
The XM-Sirius Merger gained its final governmental approval from the Federal Communications Commission on July 25, 2008, with Martin and commissioners Robert M. McDowell and deciding vote Deborah Taylor Tate voting in the affirmative. As a term of the merger, the combined company will be fined almost $20 million for failing to create and market interchangeable radios capable of receiving signals from both companies prior to the merger.[20]
iPhone, iPod Touch, BlackBerry and Android applications
Sirius XM developed a software application for use on the Apple iPhone and Apple iPod Touch devices that will allow Sirius XM subscribers to listen to its programming over the Apple devices. The Sirius XM iPhone App became available in the Apple iTunes store on June 17, 2009.
All Premium Sirius XM Internet Radio subscribers are able to download the application from the Apple iTunes App-Store for free onto their device and access the service. Subscribers who listened to the Basic Online Service for free must first upgrade to the Premium Online Service for $2.99 per month to access the application on the iPhone or iPod Touch.
Sirius XM debuted a new web page [1] to market the application.
On February 4, 2010, Sirius XM released an app for the Research In Motion BlackBerry line of smartphones, including the Storm (Series 9500), Bold (Series 9000 and 9700), Tour (Series 9600) and Curve (Series 8500 and 8900). Like the Apple iPhone/iPod Touch application, the BlackBerry app is free but requires a Premium Sirius XM Online subscription.
Sirius XM is also available for download on Android devices through the Android Market.
The applications carry most of the XM music, talk, sports and entertainment programming, as well as some exclusive Internet-only content. The mobile applications also carry a select number of channels from the "Best of SIRIUS/XM" packages, dependent on the subscriber's subscription level.
Canada
Main article: XM Radio Canada
In November 2004, Canadian Satellite Radio filed an application with the Canadian Radio-television and Telecommunications Commission to bring the XM service to Canada. Along with Sirius Canada and the consortium of CHUM Limited and Astral Media, CSR was one of three applications for national subscription radio services submitted to the CRTC.
On June 16, 2005, the CRTC approved all three applications. The decisions were appealed to the Canadian federal cabinet by a number of broadcasting, labour, and arts and culture organizations, including the Friends of Canadian Broadcasting, CHUM Limited, and the National Campus and Community Radio Association. The groups objected to the satellite radio applicants' approach to and reduced levels of Canadian content and French-language programming, along with the exclusion of Canadian non-commercial broadcasting. After a lengthy debate, Cabinet rejected the appeals on September 9, 2005.
XM's Canadian channels appeared on US receivers on November 17, 2005. On November 29, 2005, XM Canada officially launched.
See also
- Boeing Satellite Systems
- List of XM Satellite Radio channels
- Sirius Satellite Radio
- 1worldspace
- XM Radio Canada
- XM Satellite Radio channel history
Notes
- ^ Kawamoto, Dawn (July 29, 2008). "Sirius And XM close merger". CNet.com. http://news.cnet.com/8301-1035_3-10001299-94.html. Retrieved July 29, 2008.
- ^ Hinckley, David (November 12, 2008). "Sirius-XM satellite merger brings changes and cuts". Daily News (New York). http://www.nydailynews.com/entertainment/tv/2008/11/12/2008-11-12_siriusxm_satellite_merger_brings_changes.html. Retrieved November 12, 2008.
- ^ "2010 Form 10-K, Sirius XM Radio, Inc.". United States Securities and Exchange Commission. http://www.sec.gov/Archives/edgar/data/908937/000095012311014617/y88211e10vk.htm.
- ^ "The Choice is as Clear as Glass". Garmin.com. http://www.garmin.com/products/g1000/. Retrieved February 17, 2007.
- ^ "XM Satellite Weather Now Available in Business Aircraft Cabins" (Press release). FlightDisplay.com. October 24, 2006. http://flightdisplay.com/news/2006/10/xm-satellite-weather-now-available-in.html. Retrieved February 17, 2007.
- ^ a b c Baker, Liana B. (October 13, 2010). "States probe Sirius XM for consumer practices". U.S. News (New York: Reuters). http://www.reuters.com/article/2010/10/13/industry-us-siriusxm-idUSTRE69C3WZ20101013. Retrieved March 31, 2011.
- ^ "BBB Business Review Reliability Report for Sirius XM Radio". http://www.bbb.org/new-york-city/business-reviews/radio-stations-and-broadcast-companies/sirius-xm-radio-in-new-york-ny-9591/. Retrieved March 31, 2011.
- ^ XM Radio News Room http://xmradio.mediaroom.com/index.php?s=press_releases&item=983
- ^ "VoiceBox Technologies and XM Satellite Radio Join Forces..." (Press release). Business Wire via FindArticles.com. December 29, 2005. http://www.findarticles.com/p/articles/mi_m0EIN/is_2005_Dec_29/ai_n15981870. Retrieved December 28, 2006.
- ^ a b "XM Completes New State-of-the-Art Satellite System With 'Rhythm' and 'Blues'" (Press release). XM Radio via PRNewswire. December 18, 2006. http://xmradio.mediaroom.com/index.php?s=press_releases&item=1404. Retrieved December 28, 2006.
- ^ Bloomberg News (January 18, 2007). "F.C.C. Chairman Says Rules Bar Satellite Radio Merger". The New York Times. http://www.nytimes.com/2007/01/18/business/media/18radio.html. Retrieved January 18, 2007.
- ^ SEC Filing February 14, 2007.
- ^ a b "SIRIUS and XM to Combine in $13 Billion Merger of Equals" (Press release). PRNewswire via Sirius.com. February 19, 2007. http://investor.sirius.com/ReleaseDetail.cfm?ReleaseID=230306. Retrieved February 19, 2007.
- ^ "XM Radio Suspends Opie & Anthony" (Press release). XM Radio via PRNewswire-FirstCall. May 15, 2007. http://xmradio.mediaroom.com/index.php?s=press_releases&item=1452. Retrieved May 15, 2007.
- ^ Thornberry, Jacob (May 22, 2007). "XM Outage". Jaker's Blog. http://www.jakersblog.com/?p=607. Retrieved May 22, 2007.
- ^ Musgrove, Mike (May 22, 2007). "XM Satellite Radio Hit By Temporary Outage". The Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2007/05/21/AR2007052101515.html. Retrieved May 22, 2007.
- ^ "XM Chief Executive CEO Hugh Panero to Step Aside" (Press release). XM Radio via PRNewswire-FirstCall. July 24, 2007. http://xmradio.mediaroom.com/index.php?s=press_releases&item=1473. Retrieved July 24, 2007.
- ^ "XM launches XM LED, the Led Zeppelin Channel" (Press release). http://www.xmradio.com/ledzeppelin/index.xmc.
- ^ "Statement of the Department of Justice Antitrust Division on its Decision to Close its Investigation of XM Satellite Radio Holdings Inc.'s Merger with Sirius Satellite Radio Inc." (Press release). U.S. Department of Justice via USDOJ.gov. March 24, 2008. http://www.usdoj.gov/opa/pr/2008/March/08_at_226.html. Retrieved April 21, 2008.
- ^ a b Hart, Kim (July 25, 2008). "Washington Post, July 25, 2008.". Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2008/07/25/AR2008072503026.html?hpid=topnews. Retrieved July 25, 2008.
- ^ http://www.wealthalchemist.com/Blog/2009/02/sirius-xm-filing-bankruptcy/ Sirius XM Filing Bankruptcy
- ^ http://www.boeing.com/defense-space/space/bss/factsheets/702/xm3-4/xm3-4.html
- ^ "XM radio in Hawaii". HawaiiThreads.com. December 22, 2004. http://www.hawaiithreads.com/showpost.php?p=16992&postcount=28. Retrieved December 28, 2006.
- ^ "Boeing 702 Satellites Solar Arrays Possibly Defective". SpaceandTech.com. September 29, 2001. http://www.spaceandtech.com/digest/flash2001/flash2001-082.shtml. Retrieved December 25, 2007.
- ^ Lai, Shu T (2005). "Charging of Mirror Surfaces in Space". Journal of Geophysical Research 110: A01204. Bibcode 2005JGRA..11001204L. doi:10.1029/2002JA009447. http://handle.dtic.mil/100.2/ADA430372. Retrieved December 26, 2007.
- ^ "Satellite Space Applications Accepted for Filing" (PDF). FCC.gov. June 9, 2006. http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-265875A1.pdf. Retrieved December 28, 2006.
- ^ "Space Systems/Loral to Build Next Generation Satellite for XM Satellite Radio" (Press release). Space Systems/Loral. June 7, 2005. http://ssloral.com/html/pressreleases/pr20050608.html. Retrieved December 28, 2006.
- ^ "XM 5". Skyrocket.de. June 2005. http://space.skyrocket.de/doc_sdat/xm-5.htm. Retrieved December 28, 2006.
- ^ http://www.patentstorm.us/patents/7075946-description.html This XM patent describes the carrier allocation scheme
- ^ http://www.patentstorm.us/patents/7075946-description.html XM Patent Method and apparatus for audio output combining
- ^ "Schedule 14A Information". SEC.gov. April 20, 2004. http://www.sec.gov/Archives/edgar/data/1091530/000119312504065990/ddef14a.htm. Retrieved December 28, 2006.
- ^ CLEAR CHANNEL COMMUNICATIONS, INC. Form 10-Q for Q306
- ^ Neumeister, Larry (January 20, 2007). "Suit by Record Companies Against XM Going to Trial". Associated Press. http://www.washingtonpost.com/wp-dyn/content/article/2007/01/19/AR2007011901680_pf.html. Retrieved January 20, 2007.
- ^ "Statement of the Department of Justice Antitrust Division on its Decision to Close its Investigation of XM Satellite Ratio Holdings Inc.'s Merger with Sirius Satellite Radio Inc." (Press release). Department of Justice Antitrust Division. March 24, 2008. http://www.usdoj.gov/atr/public/press_releases/2008/231467.htm. Retrieved March 24, 2008.
External links
- Official website (United States)
- Official website (Canada)
- Official XM For Business website (for commercial use)
- XMwxweather.com
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Gale Directory of Company Histories
International Directory of Company Histories. Copyright © 2006 by The Gale Group, Inc. All rights reserved.
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