Have you read this article about satellite radio?
Is Satellite Radio a Problem Or Solution?
Apr. 23 (The Philadelphia Inquirer/KRTBN)--You've got your satellite
television. You've got your satellite telephone. You've even got your
satellite Internet service, which transmits Web pages to your personal
computer.
What in the world could be next?
Try satellite radio.
In the next two years, two companies each plan to bring 50-channel
digital satellite radio to an American audience, especially to people
in their cars. A third company aims to deliver what it calls
"information affluence," through scores of music and news channels, to
Africa, Asia, the Middle East, and South America.
The U.S. services plan to charge $10 a month to subscribers, who will
need a special $200 antenna and radio, or a tape-deck plug-in device.
Think of it as cable radio. Pay-to-hear. Satellite TV for your ears.
And the most obvious question is: Why would anyone pay for something
that can be gotten now for free?
Ask this of David Margolese, 40, who has pursued the vision for eight
years as the chairman of CD Radio, and he says: Think cable TV.
"The same question was asked of television in the late '60s, the early
'70s, when it was 'free,' " Margolese says. "Remember those six
channels and the rabbit ears? But cable came along and delivered
high-quality pictures and more choice. And we see the result of that."
Lon C. Levin, the 43-year-old president of the American Mobile Radio
Corp.
in Reston, Va., remembers growing up on Long Island, listening to
stations such as WNEW-FM in New York City play album sides and long,
uninterrupted musical works.
"We intend to do what FM radio did in the '60s and '70s: cater to
young adults," Levin said. "They were the ones that could play Tommy
from beginning to end. You just don't have that any more."
He added: "We are offering greater quality and an overwhelming amount
of more choice -- and, in a sense, an overwhelming amount of
availability."
With satellite radio, the same stations can be tuned in anywhere. So
if following your bliss means loading up the VW microbus and piloting
it cross-country, you can groove to Yanni -- or Bach, Bird or Elvis --
from Bangor to Burbank. (Not, however, from Terra Haute to Tierra del
Fuego: The U.S.
services will not use the same frequencies as WorldSpace Corp., of
Washington, D.C., which will serve South America and other
international locales.)
CD Radio plans to offer 30 channels of music and 20 of news, sports
and information. The musical lineup (as on its Web site,
cdradio.com) includes channels for symphonic music, chamber
music and opera, contemporary jazz and classic jazz, Latin ballads and
Latin rhythms, Broadway's best, and reggae.
American Mobile Radio, a subsidiary of American Mobile Satellite Corp.
-http://www.skycell.com -- which is about a year behind CD Radio in
planning, anticipates roughly the same mix of channels. It plans to
lease some channels to outside programmers.
Satellite radio has been compared to the digital music channels that
run on some cable TV systems. Cable's music services are seen as having
mixed success. Margolese said the $10-a-month digital audio channels
are purchased by a half-million people, or 2.5 percent of those to whom
it is available, which he finds encouraging.
But others view cable radio as something that never panned out.
"You don't go to your television set to listen to the radio," said
Noah Samara, chairman of WorldSpace Inc. -- worldspace.com
-- which aims to loft three satellites to send 80 to 100 channels of
international programs to handheld receivers in different parts of the
globe.
CD Radio and American Mobile won licenses to use the radio frequencies
in a Federal Communications Commission auction last year, paying $83.3
million and $89.9 million, respectively.
Radio broadcasters have opposed the digital audio radio services, also
known as DARS, and are watching them warily. Broadcasters say there are
technical problems with the new services. Also, broadcasters fear the
services will siphon audience and advertisers from conventional radio.
Some broadcasters contend that satellite radio could weaken radio and
hurt its ability to provide local services. Others say that because
satellite radio isn't local, it shouldn't interfere. "There is some
concern, but I don't think people are pressing the panic button," said
Paul Heine, editor of Friday Morning Quarterback, a radio-programming
trade magazine. He said the new services would appeal to "very narrow
bands of audience."
Saul Levine, a classical-music station owner in Los Angeles, said the
satellite services would erode the already-small audiences for
classical music, jazz and other niche genres. "If you fragment a small
pie, there won't be enough for anyone to eat," he said.
The satellite radio companies say that because they're not local, they
shouldn't affect AM/FM radio's role as a local news and program source.
But they say they do see underserved musical niches.
Of the 30 musical formats CD Radio plans to offer, Margolese said, 17
are not available in the nation's biggest media market, New York City.
Those 17 formats -- including operas, Broadway tunes and reggae --
represent more than one-quarter of all record-store purchases, he said.
In an interview in the fall, Reed Hundt, the outgoing Federal
Communications Commission chairman, was asked what could be done about
Philadelphia's loss of its only classical music station, WFLN-FM, and
the declining diversity of music. His response: "Satellite radio."
CD Radio says its music stations will be ad-free, though it will run
national advertising on its talk stations, which will include Bloomberg
News Radio and C-Span's radio service. American Mobile expects to run
ads on all its channels.
"I don't believe people are averse to commercials," Levin said. He
said that people only mind a lot of advertising, and that his company
will have fewer than on commercial radio. He contended that his ads
would be so well-aimed at listeners that they will be "giving
information to consumers that they want."
CD Radio, which is building headquarters and programming studios in
New York, plans to transmit radio signals to a pair of satellites
22,300 miles above the Earth in geosynchronous orbit. The satellites
will retransmit the radio signals to Earth at a frequency of 2.3
gigaherz, in the so-called S-band.
The company has developed a silver-dollar-size, adhesive-backed
antenna that can be stuck on a rear car window (it will be destroyed if
someone tries to pry it off). It sends the signal wirelessly to a radio
card, a tuner-display device that pops into a dashboard cassette or CD
player.
CD Radio is aiming for drivers, including the 34 million people who
commute one to two hours a day. In addition to a plug-in card that can
be used with conventional radio-tape decks, they hope to see
electronics-makers produce car stereos that integrate S-band radio.
American Mobile also hopes to capture the boom-box and home markets
with portable radios.
Unlike the satellite TV services, each of which requires a different
receiver, the DARS companies are supposed to be developing receivers
that can pick up either service.
The biggest problem with satellite radio is that it requires a direct
line of transmission from the satellites to the antenna, which is
difficult to achieve in cities and many suburbs.
To remedy that, CD Radio and American Mobile are seeking final FCC
approval to build hundreds of Earth-based transmitters or repeaters, to
blanket the 40 largest radio markets with their signals.
Broadcasters have fiercely contested those plans. John Earnhardt, a
spokesman for the National Association of Broadcasters, said that
putting up repeaters would be no different than building radio
transmitters across the country: "If it's satellite, what's the purpose
of putting stations all over the ground?"
"It's really diabolical," said Levine, the president of Mount Wilson
FM Broadcasters, which owns KKGO-FM in Los Angeles and two other radio
stations.
Levine said the network of ground-based systems would almost flip the
original concept of satellite radio on its head by creating a
coast-to-coast ground system with satellites filling in the rural
areas.
The satellite companies reject that argument. CD Radio is spending
about $700 million, only $50 million of which is on land equipment,
Margolese said.
Existing businesses have always fought threatening new technologies,
he said -AM broadcasters opposed the advent of FM radio, and TV
broadcasters opposed satellite TV.
Consumer-electronics manufacturers also have argued that the new radio
systems won't work, saying that S-band signals are difficult to receive
consistently and would require large investments in land equipment. "If
they succeed, we sell radios," said Gary Shapiro, president of the
Consumer Electronics Manufacturers Association. "But based on tests we
did ... we don't see how they can pull off a service like this."
The satellite companies contend that the FCC says, and their own tests
show, that the systems can work.
Ultimately, the real test will be with consumers. And in some
quarters, it could be a tough sell.
"We need to have a station that represents what Philadelphia's all
about," said Ellen F. Bildersee, who heads a grassroots group formed
after the demise of WFLN. A satellite radio network with three types of
classical music "is not going to do it," she said. "It's not indigenous
to the interests of Philadelphia."
By Michael L. Rozansky
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