Boom in the night
Satellite radio comes home, but should you care?
There are a lot of great things about living in Chico, but listening to the radio might not be counted among them.
On weekdays, four of the AM stations tunable in town have Rush Limbaugh holding forth while in the afternoon, and Dr. Laura metes out advice on nearly half the dial. At night Coast-to-Coast AM, a clearinghouse of UFO stories, governmental conspiracy theories and dreamy mysticism, can be received on seven stations heard in Chico—along with rebroadcasts of Rush and Laura.
Over on the FM side, it isn’t much better. Choice is divided among interchangeable pop stations, spotty National Public Radio broadcasting (KCHO broadcasts 11 hours of news and information, but six of them are between 1 and 7 a.m.), and oldie stations spinning out Fleetwood Mac’s Rumors again. We are lucky to have community station KZFR-FM for local color, but overall there isn’t the widest of choices.
In the last few years, the techno-forces that remade electronics in the image of TiVo and the Internet have set their sights on radio. Last year, two competing services, Sirius and XM, began broadcasting radio from space.
Currently, each broadcasts about 100 stations of music, talk, entertainment and information. As with cable or satellite TV, listeners pay a monthly fee and must get some new electronic boxes. But what’s offered is much more programming than traditional “free” radio, which, after all, has listeners paying by sitting through commercials. And location doesn’t matter: You can listen to the same station from California to Maine.
Locally, Oroville’s Radio Mart was one of the first to sell XM. As service manager Dave Foster said, “I’ve installed about half a dozen different systems, from regular passenger cars to long-haul semis. [One trucker] drove it back to Wisconsin when he first got it, and he called me from there to tell me how awesome it was.”
Awesome or not, it is different. While the services have programming in common (Fox News Radio, CNN radio, BBC World Service and more), Sirius alone offers NPR and Public Radio International, while XM has more comedy, radio dramas and even books on tape. But the bulk of both services comes in the form of music channels, all delivered in CD-quality stereo, static free and commercial free on Sirius and almost so on XM. Like music stores, the stations are broken into broad genres (classical, rock, jazz) but also by era. Listening to XM’s ‘40s station is like stepping into music as it was then and not just the Glen Miller cuts that usually represent the era today.
While both services offer many shows familiar from traditional radio, the real potential rests in the future. As a subscription service, satellite radio is free from FCC limits on speech and content. XM offers Playboy radio (for an additional fee), and both have channels with some off-color language. While it took years for pay TV to begin flexing its freedom from sponsors, once it did so the move revolutionized the quality of TV (most Emmy-winning shows, such as The Sopranos, Sex and the City, The Shield and Monk, now come from cable channels).
This realization has some in the traditional radio establishment fighting back. Recently, ads have been popping up imploring customers to stick with local radio. Laced with sympathy for customers nickel-and-dimed by rising telephone, cable TV and movie prices, the ads proclaim listeners “shouldn’t have to pay for radio too.”
In some senses, the ads are disingenuous, in that they’re put out not by local businesses but by national bodies such as the one that syndicates Coast-to-Coast AM to Chico’s KPAY-AM.
What else are they doing to combat satellite radio?
“Not much,” said Sirius’ Collins. “Still, almost half of every hour on a typical radio station is taken up by commercials. You add the DJ chatter and the other clutter, and it can be more than that. The only offense on the horizon is digital radio—in other words, for radio stations to begin broadcasting digital radio, like we do. But all that will do is improve the sound. That won’t change the programming problems they have. Bear in mind, we’re not trying to replace local radio. We see ourselves as an adjunct to local radio.”
On the local level, Dino Corbin, general manager of Clear Channels Radio and TV in Chico, is not sweating the possibility of Chicoans lending their ears to satellite programming. Clear Channels owns KPAY, KMXI FM and KHSL-FM.
“I’m not worried about it here any more than I was worried about it at the TV business,” Corbin, the former general manager of KHSL-TV, told us. “Certainly there are people who will gravitate toward picking up a satellite radio, for example. People who live in metropolitan areas are still going to say, ‘What’s that smoke column?’ ‘What’s that siren?’ They’ll still want to hear local happenings. So local, local, local will still sell, still be a viable aspect, as it is in television.”
Of course, there’s also another reason Clear Channel, which has had a large hand in making local stations from Chico to Charlottesville sound the same, is not fighting satellite broadcasting.
“As Clear Channels Radio, we own stock in XM,” Corbin said. So much for new technology replacing the old order. So what about the ads on KPAY lobbying for free radio?
“We don’t have any commercials saying anything negative about satellite radios,” Corbin said. “There might be something coming in on [Coast-to-Coast AM] or something. But nothing from us as a company.”
Beyond any philosophical enjoyment consumers might lose by not being able to break free of the forces of McRadio, there are other potential drawbacks to satellite radios.
Although both Sirius and XM sport various models for home and car use, the lowest entry cost for equipment and installation is around $250. That’s in addition to the monthly charges, $9.95 for XM, $12.95 for Sirius. What’s more, unless you buy a unit that unplugs from your car and into your home stereo, you’ll have to buy two units if you want to listen at home and on the road. And you’ll have to pay monthly charges on each.
Not everyone is clamoring to sign up.
“They’re not really big here, yet,” Foster said, “but I have a lot of people asking about them and checking into them. As far as purchasers, though, the main people who bought them are employees who work here and a couple truck drivers.”
The satellite radio movement also seems to be running into a generational wall. While most older users grew up with records and radio as the avenues to audio entertainment, younger listeners have more options.
“Older folks like it because they drive a lot,” Foster said. “The younger generation’s not really into it because they’re more into listening to [burned] CDs.”
Matthew Whitlow is a member of that generation. A manager and installer at Chico’s Mobil Excitement, he got an XM last July, but…
“I traded it to my boss for a Clarion CD player,” Whitlow said. “I like [satellite radio], but they want $10 a month and $30 up front.”
He was also irritated by the coyly worded claims about commercial-free music. Only some channels on each service are truly commercial free.
“They [XM] have a Los Angeles station, KISS, and all of the sudden a commercial comes on,” Whitlow said, lending listeners the absurdity of having to listen to commercials for businesses they can’t patronize. “Usually people don’t want to listen to commercials.”Then there was the trickle of stories last fall hinting that XM, Sirius or both could go under before turning a profit.
Again, Sirius’ Collins: “Both were started and built in a period when the capital markets were flush. People were investing on the potential. Both companies were able to raise the money to launch the satellites and develop the studios and start the programming. [Then] the stock market and the capital markets dried up. The mood is very negative out there. People want to invest in companies that will give them a return on their investment immediately. Neither XM nor Sirius is designed for that. We’re start-ups.”
Despite that gloomy assessment, Collins is confident Sirius’ futuristic promise will entice the essential investment needed before the company can turn and then survive on profits.
“All those stories revolve around the B word, bankruptcy,” he said. “The press focuses on the negative. Having said that, that issue for us is being addressed through a re-capitalization.”
As outlined, Collins believes the new plan will have Sirius solvent through the middle of 2004 (without the re-capitalization, the end would have been this summer), while XM has announced a plan to keep it afloat after its current drop-dead date, the first quarter of this year, passes.
While each service will have to hit targets in the millions of listeners to turn a profit, as of late 2002 each had listener numbers far from that goal: As of October, Sirius claimed nearly 17,000, while the more advertised XM had nearly 350,000 at the end of 2002.
Another consideration for those contemplating the leap: There are no satellite-enabled Walkman-style devices (so don’t expect to jog from coast to coast to the same stations), and only XM has released a boom-box-style portable version. Sirius abandoned the concept after announcing one in January 2002.
“We’ll tell you we’re not terribly excited about the boom-box concept,” said Sirius’ Collins. “We’re more excited about the in-home concept.”
So what’s the future? Clouded, but the clouds might be breaking. Since beginning in the early 1990s, satellite TV has been taking more and more market share from cable TV, and Sirius just demonstrated the ability to send video through its system. Also, many car makers are incorporating the technology into their new-car radios.
“I think it will hit when it comes installed in cars,” Whitlow projected.
For his part, Corbin, the most powerful man in Chico broadcasting, is serene about his stations’ and satellite radio’s prospects.
“The day will come when we will all see the vast majority of our reception of broadcast signals will come from satellites," he said. He should know.