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A Race In Space: Satellite Radio

It's been a year of ups and downs for the fledgling satellite radio business with the two major players each experiencing their own advances and setbacks in establishing their services.
With XM Satellite Radio launching their service this past fall and Sirius Satellite Radio just weeks away from beginning their commercial service, it's time to check on what's happening in this new industry.

XM SATELLITE RADIO

"In 12 short months, XM Radio has gone from a PowerPoint presentation to the 'Product of the Year,' said XM President and CEO Hugh Panero, referring to the recent honor by Fortune magazine. "I am proud to announce that after being fully national for only 56 days, XM has over 30,000 paying subscribers with roughly 28,000 reported at year-end, exceeding most Wall Street analyst year-end estimates."

Panero added: "The company achieved this without the full benefit of its total distribution network due to early product constraints that have since been resolved."

That announcement and others were made by the company at the Consumer Electronics Show in Las Vegas.

COMMENTS FROM THE CEO

"Will people pay for radio?" CEO Panero asked. "The answer is a resounding Yes. . . In fact, we have created the 'car potato,' people across the nation finding excuses to drive around to listen to XM or stuck sitting in their driveway listening to great music."

"Simply put, we've executed our plan and kept our rollout promises made at last year's Consumers Electronics Show," Panero added. "Rather than being one year behind our competitor to market, we have a nine-month nationwide lead."

XM's programming lineup features 100 coast-to-coast digital channels: 71 music channels, more than 30 of them commercial-free, from hip hop to opera, classical to country, bluegrass to blues; and 29 channels of sports(including NASCAR coverage), talk, children's entertainment and a diverse selection of 24-hour news sources. The company offers their service for a subscription fee of $9.99 per month.

"XM, at our core, is music," Panero said. Since XM launched nationally, it has created over 90,000 hours of radio for its music channels alone, playing more than 1.4 million songs across every genre. With more than two million songs in its music library XM has also recorded more than 40 live performances, interviewed more than 160 celebrities and artists and archived more than 1,100 interviews with musicians recorded over the years.

POPULAR ACCEPTANCE OF XM

XM was named "Product of the Year" by Fortune, an "Invention of the Year" by Time and won Popular Science's 2001 "Best of What's New" Grand Award in the electronics category. XM won several awards at the 2001 CES, including "Best of CES" in the automotive category.

XM proved one of the hottest Christmas gifts, according to a survey conducted for the company by the Yankee Group, a leading technology research and strategic consulting firm. The telephone survey of top consumer electronics retailers concluded that retailers are more excited about the market potential for satellite radio than for any other mobile electronics product.

XM radios are available at major electronics retailers nationwide including Best Buy, Circuit City, Tweeter, Ultimate Electronics, participating RadioShack Dealers and Franchisees, Crutchfield, Good Guys, CarToys, Audio Express and Sound Advice; and at independent retailers.

Manufacturers such as Sony, Alpine and Pioneer offer an array of XM radios including models that will enable any existing car stereo system to receive XM service (the Pioneer Universal Receiver and the Sony Plug-and-Play) and over 20 models of new AM/FM/XM systems.

General Motors in November rolled out factory-installed Delphi-Delco XM radios in Cadillac DeVille and Seville models, and will expand to more than 20 GM models this year. XM's strategic investors include America's leading car, radio and satellite TV companies -- General Motors, American Honda Motor Co. Inc., Clear Channel Communications and DIRECTV.

"XM is rapidly becoming a consumer electronics entertainment standard just as the CD, VCR, DBS and DVD did before it," says Panero.

CHANGES AND NEW FEATURES TO THE XM WEB SITE

- Programming highlights for the coming week on the 100 available XM channels - Information on XM's Featured Channel of the Week

- Info on special offers and new music releases playing on XM

- Exclusive photos of artist visits to the XM Studios.

STREAMING AUDIO: Visitors can now sample more than half of XM's channels on XM's web site.

ON-LINE VOTING: XM listeners can vote online for their favorite pop hits and hear them played on "20 on 20," XM's top hits channel (Channel 20). (http://20on20.xmradio.com/)

XM SIGNAL: XM's weekly email newsletter focuses on highlights of upcoming XM programming.

CONTACT XM CHANNELS DIRECTLY: Subscribers can now directly email or phone toll-free each of XM's original programming channels allowing listeners to interact with XM's on-air talent and live shows.

DEALER LOCATOR ENHANCEMENTS: Thousands of dealers' locations who carry XM products can now be found through a search engine on XM's web site. Visitors can also link to XM-authorized online retailers for convenient Internet shopping.

ONLINE ACTIVATIONS: At subscribers' request, XM added the convenience of activating XM radios on the web. XM subscribers can also communicate directly with Listener Care and make adjustments to their accounts such as adding a radio, changing an address, viewing a bill or changing credit cards for billing.

SIRIUS SATELLITE RADIO

This is the beginning of a new era at Sirius, said Sirius President and CEO Joseph P. Clayton at a news conference at the 2002 International Consumer Electronics Show.

With our national launch strategy in place, new and dynamic programming, the sponsorship of a Dodge NASCAR racing team, our strengthened and experienced management team and a redesigned web site, all systems are go to make 2002 a milestone year for Sirius. We fully expect to own the in-car entertainment space for consumers.

From its three satellites orbiting directly over the U.S., Sirius will broadcast 100 channels of digital quality radio to subscribers throughout the continental United States for a monthly subscription fee of $12.95.

Sirius will deliver 60 original channels of completely commercial-free music in virtually every genre, and 40 sports, news and entertainment channels.

ROLLOUT SCHEDULE

Clayton announced Sirius' three-phase service rollout strategy, culminating in service offered nationwide beginning in July.

Phase I
Commencing February 14, 2002, Sirius will launch commercial service in four markets Houston, Phoenix and Denver (which were previously announced) and a new market Jackson, Mississippi, where Mr. Clayton first debuted satellite television with RCA in 1994.

All four markets feature early adopters of technology, favorable attitudes towards mobile electronic products and strong retail environments. Commenting on the launch, Mr. Clayton said, Jackson was the successful launch city for DIRECTV and we plan on duplicating that success with Sirius' satellite radio service.

Phase II
Sirius will implement the next phase of its regional rollout across the southwestern United States beginning in April/May in Dallas/Fort Worth, TX; Tulsa, OK; Albuquerque, NM; and Little Rock, AK.

All were early rollout markets for RCA and DIRECTV. Service will be available in the southern and central U.S. starting in June/July, and will include the leading metropolitan markets of Miami, Tampa Bay and Orlando, FL; Indianapolis, IN; and Nashville, TN.

Phase III
Sirius expects to offer service nationwide during the third quarter.

DODGE RACE TEAM SPONSORSHIP

Sirius announced it has joined the Evernham Motorsports/Ultra Motorsports Dodge racing team, part of the NASCAR Winston Cup Series.

Sirius will be the primary sponsor of the No. 7 Sirius Satellite Radio Dodge Intrepid R/T, driven by Casey Atwood. The car will compete in the 2002 and 2003 NASCAR Winston Cup Series, the premier circuit in stock car racing, making its debut at the Daytona 500 on February 17 at the famed Daytona International Speedway.

Ray Evernham and Casey Atwood will also be featured on Sirius' music and talk channels.

SIRIUS TAKES IT ON THE ROADAs part of its launch program, Sirius announced a unique consumer and retail experience, the Rhythm of the Road Tour. This mobile demo tour features a custom-built 65-foot giant ferris wheel dubbed the Wheel of Sound, which is equipped with eight Sirius-ready musical theme cars for consumers to ride in and listen to Sirius' service.

The tour also features specially designed trailer trucks that open up into listening kiosks for consumers, a stage for local musicians and a DJ booth that will play the Sirius service live at each location.

Consumers can also listen to Sirius' service in any one of a variety of demo vehicles, including the No. 7 Sirius Satellite Radio Dodge Intrepid R/T, a BMW X5, Ford Mustang and Dodge Ram Quad Cab.

NEW PROGRAMMING

Sirius has unveiled its new channel lineup, including 60 original music channels, all commercial-free, in almost every musical genre, from rap to reggae, classical to country, new rock to hard rock, as well as HITS channels playing all the top hit songs in pop, rock, country, R&B, rap and dance, virtually on demand.

Rounding out its lineup, Sirius will broadcast 40 world-class channels of sports, news, talk and entertainment through partnerships with world-class providers, including ESPN, ABC News, CNN Headline News, E! Entertainment Television, The Discovery Channel, A&E, and more.

Sirius announced it will simulcast live trial coverage from Court TV as well as the Catherine Crier Show. Court TV programming will be featured on Sirius' Real Sirius channel, an entirely new radio format that will deliver reality and true crime programming, and live, interactive talk shows.

Commenting on its new programming lineup, Sirius CEO Joe Clayton said, Sirius listeners are going to hear something fundamentally different from anything out there, and that's because our approach and commitment to the listener is unlike anything that exists right now. In fact, we call it entertainment so great you'll never want to leave your car.

Sirius has agreements to install AM/FM/SAT radios in Ford, Chrysler, BMW, Mercedes-Benz, Jaguar, Volvo, Mazda, Dodge and Jeep® vehicles.

Kenwood, Panasonic, Clarion and Jensen satellite receivers, including models that can adapt any car stereo to receive Sirius, as well as home and portable products, will be available at retailers such as Circuit City, Best Buy, Good Guys, Tweeter and Crutchfield.

The redesigned Sirius web site offers live streaming of Sirius' 60 commercial-free music channels and will serve as an interactive, online complement to Sirius' broadcast programming.

On the new site, visitors will be able to sign-up and become Sirius Insiders for access to exclusive content, including behind-the-scenes interviews with artists.

The site features customer command, which allows consumers to subscribe and manage their Sirius accounts online and interact with customer service representatives 24 hours a day, seven days a week, via live chat and e-mail.

Web Information
Sirius Satellite Radio
XM Satellite Radio