CD Radio/Lor
09/30/98- Updated 10:12 AM ET
USA Today - The Nation's Homepage
Tuning into the next radio wave
Some day soon, your car radio may have AM, FM and S buttons.
The S stands for satellite -- digitally clear radio programming with a signal range spanning the entire USA. Observers are calling it the first serious threat to conventional radio since the FM band was introduced in the 1940s.
While satellite broadcasts of digital music are already available to some homes via programming providers like DirecTV and Primestar, they've had little impact to date.
However, the next wave of digital satellite radio, due to start late next year, is gearing up for the mobile segment of the market. Some observers feel that, like high-definition television's impact on broadcasting and cable, satellite radio delivery to cars and Walkman-like units will shake up the status quo.
"It's the first time (conventional) radio is going to be attacked in the place it's most successful, in the automobile," says Tony Novia of Radio & Records, a trade magazine.
Satellite radio is "allegedly the best sound that's ever come out of radio speakers and it's going to offer people a ton of options," Novia says. Programming specifics have not yet been announced.
Wiring your car
Among its gimmicks: the ability to display song title, artist name and record label on a lighted panel, much like station numbers are now displayed.
Eventually, users may be able to purchase the music from their car by pushing a button, or listen to a conventional New York radio station's broadcasts while visiting Phoenix.
Conventional radio broadcasters, concludes Novia, "have to take it very, very seriously."
Satellite radio will initially require car users to purchase a small radio "card" that will fit in the cassette or CD slot on a conventional car radio, and a silver-dollar size satellite dish with an adhesive back to attach outside the car. The total cost of equipment is expected to be around $200. Walkman-like devices or car radios that have satellite capability built in have not yet been developed but are expected.
Users also will be required to pay a monthly subscriber fee, envisioned at around $10.
The market is potentially huge. Radio ratings giant Arbitron says 27% of radio listening during any given part of the day occurs in the car, scaling to a peak of around 37% of the listening audience during evening commuting hours.
But the automobile gives radio something no other medium can match -- a captive audience estimated to reach 110 million commuters by 1999, all with limited entertainment options in their vehicles. It's a market segment advertisers covet. "Radio is to the car what television is to the home," says David Margolese, chairman/CEO of CD Radio, one of two companies licensed by the Federal Communications Commission in 1997 for satellite radio delivery to the automobile.
It's also an audience digital satellite people feel is vastly underserved by today's AM and FM programming selections. They claim conventional radio has devolved into a formulaic mix of news, talk and tightly formatted music stations, each only slightly different from others across the nation.
Thus, listeners anxious for such niche music genres as reggae, jazz, opera, big band, or a wider selection of rock than currently programmed must "wait until Sunday night at 11 p.m. and turn to a college radio station," says Lee Abrams, head of programming for Washington, D.C.-based American Mobile Radio, the other FCC-licensed satellite broadcaster. "We'll have enough channels to serve pretty much every imaginable niche."
Both American Mobile Radio and New York-based CD Radio will launch their first satellites late next year. Service for both is expected to begin early in 2000.
There are questions about the satellite radio business plans. Will drivers make the investment in equipment? Will they spring for a subscription fee of $10 a month? And once satellite radio is launched, will enough of an audience listen to its shows so that they can make a ratings impact, key to attracting advertising?
Some observers aren't sure the technology will work. Gary Shapiro of the Consumer Electronics Manufacturers Association (CEMA) has stated that the S-band portion of the spectrum won't easily transmit to cars moving at 70 mph. Heavy cloud cover, trees, or other obstructions can create dead zones, Shapiro claims, although terrestrial tests of the technology have been successful.
Conventional radio people also contend broadcasting's strength is its ability to transmit traffic reports, news and regional sports, something national satellite services can't do.
"I think in most cases, with a few exceptions, local radio really died years and years ago," counters Abrams, a former radio consultant. "When I was kid, I used to drive from Chicago to Florida, and every market you'd drive through would have very unique-sounding stations. Now, it tends to be more of a cookie-cutter sound market to market."
CD-quality sound
Under current technological standards, the 12.5 MHz of the spectrum allocated to American Mobile Radio and CD Radio should allow approximately 19 to 44 audio channels each.
However, as compression technology improves, up to 100 channels of CD-quality programming may be possible in the year 2000, all of it ostensibly delivered without fades, interference or other distortions common to conventional radio broadcasts.
Abrams is hiring programming talent at the moment. He claims that the general reaction to his satellite plans sounds vaguely familiar.
"It's funny, 'cause I was around at the beginning of when FM happened, and there were a lot of people who said FM will never work," says Abrams. " 'No one will ever topple the big AM stations,' was all I heard. There's a lot of denial out there."
By Bruce Haring, USA TODAY
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