XM vs. Sirius

Satellite radio wars

Pete Evanow / autoMedia.com

A new battle has emerged among companies trying to gain a foothold for consumer entertainment dollars. It smacks of the old VCR wars where two formats, VHS and Betamax, fought for the placement of the ultimate content provider. Betamax lost and went the way of the dinosaur. This time the two hardware systems, again each totally incompatible with the other, stream signals featuring a multiplicity of programming—music, talk, sports, traffic and weather to your car or home—and are known as satellite radio under the names XM and Sirius. And, to borrow a reference from the latter, both are serious indeed.

Alliances

The latest contribution to consumer entertainment has generated significant attention, and as XM and Sirius become more readily available and agreeable to consumers, chances are good they will have a healthy future. So far, XM is leading the charge with more than two million subscribers to Sirius' roughly half million. Although, unlike the VCR issue, it would appear there won't be one winner and one loser. Both satellite systems are strong, have incredible programming and talented personnel, on the air and behind the scenes, and possess ambitious and, most importantly, attainable business strategies.

The strength and longevity to each service's ongoing success are through their multiple automotive alliances. XM is partially owned by General Motors, and its subsidiary, Hughes Electronics. On the other side of the table, DaimlerChrysler has invested a significant sum of money in Sirius. Both companies count on exclusive partnerships with these OEMs (Original Equipment Manufacturers) and other retailers to carry their hardware and offer their programming packages to buyers of their partners'/investors' vehicles. In addition to the Chrysler Group and the Mercedes model lines, Sirius enjoys an exclusive relationship with BMW and MINI and also a strong relationship with the Ford family, including its Premier Automotive Group. Both programmers share Porsche, Nissan and Infiniti, Volkswagen-Audi and Toyota and Lexus.

For XM, the affiliation with GM is an extremely important one, as the auto manufacturer has pursued an aggressive marketing push to attract customers who will purchase XM-equipped vehicles and ultimately become subscribers. American Honda also is an investor, as is multi-broadcast station owner Clear Channel Communications.

Availability

The bottom line is that these impressive content developers are performing what many motorists would consider a community service: providing multiple musical choices and allowing consumers to shut off conventional, mainstream broadcast radio stations filled with mindless commercials, limited playlists and ceaselessly irritating talk shows. Granted, the satellite services may feature some controversial shows, but with XM offering 68 channels of commercial-free music programming, along with 33 news, sports and talk show stations, plus 21 dedicated traffic and weather channels, and Sirius featuring roughly the same total number of channels, 120, with 65 commercial-free, including constant traffic and weather reports in the top 20 U.S. markets, there is a lot from which to choose. Fortunately, both services offer their proprietary hardware through a number of retail chains enabling the consumer to easily subscribe, in order to receive all the music, talk and sports the standard AM/FM formats can't.