Industry News
Breaking Protocol
A look at BlitzSafe’s new DMX Protocol converter technology
Automedia
BlitzSafe recently announced the introduction of the release of the first product using their new DMX (Digital Multiplex) technology in a changer protocol converter. We spoke with Ira Marlowe, president of BlitzSafe, who explained that while most changer converters are designed so that after-market CD changers can be added to factory decks, DMX technology actually increases the features and benefits of the interface. For instance, using one of the units just released by BlitzSafe, the factory radio can control up to two CD changers.
Although the first units are designed to add Panasonic changers to Toyotas, BlitzSafe assures that units to interface changers by Kenwood, Sony, JVC, Nakamichi, Alpine, and Pioneer will soon be available. Likewise, OEM decks with changer controller options in vehicles from Izuzu, Honda Passport, Ford, GM, and Mercedes will soon be added as well. Right now, this means that when a customer with a new Toyota enters your shop and wants to add a Panasonic changer, your options are to sell him two 6-disc changers, two 8-disc changers, or a combination of the two. Down at the Toyota dealership, the customer’s options only include adding a single changer.
Breaking Protocol
To activate a single CD changer, the CD button on the factory deck is pushed once. The display on the factory deck then shows which disc is playing (i.e., 1 through 8). The DMX technology adds a new feature to the factory deck. The second time the CD button is pressed, the contents of the second CD changer are displayed. The best part is that the display will read higher numbers (i.e., 9 through 16). You definitely can’t get this feature down at the Toyota dealership.
If a disc magazine in one of the changers is empty, the display on the factory deck will read, OPEN. The factory deck does not do this byitself but with the DMX Protocol Converter connected into the system, the display will read OPEN.
Aftermarket GPS systems will also soon be able to integrate into factory systems using the DMX Protocol Converter. This will permit GPS to be added to factory systems that did not previously have GPS capability.As we approach the millennium, more and more GPS displays are being built into the vehicle. The DMX Protocol Converter will be able to integrate these factory systems with aftermarket GPS systems such as those presently marketed by Alpine and Clarion.
We are looking forward to testing one of these new BlitzSafe technology units at our test labs in the near future.
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XM and Sirius go head to head in a Rocky Mountain road trip
SOUND & VISION
by Ken C. Pohlmann & Leslie Shapiro
Sound & Vision
The temperature was chilly - at least to two southerners - but even the coldest day in Rocky Mountain National Park is sweltering compared to the frigid - 450° void of outer space. At 9,000 feet, we were well above sea level, but low compared to the orbiting satellites that transmit the signals for the XM and Sirius radio services from as high as 29,000 miles above terra firma. The top speeds of our Audi and BMW vehicles were fast by earthly standards, but positively sluggish compared to the 9,000-mile-per-hour velocity of the space vehicles in question. Our world and theirs could hardly be more different, yet we were comfortably linked by heavenly music floating down from above.
Sound & Vision and its respected logos, indicias and images are trademarks of Sound & Vision
Digital Audio Radio
Reprint Consumer Electronics Association.
Until 2001, the digital revolution that swept through the communications industry had bypassed the over-the-air radio business. However, in November 2001, one company – XM Satellite Radio – began beaming 100 digital channels of coast-to-coast music, news, information and talk show programming from high-powered satellites directly to vehicles and homes throughout the U.S. A second company offering similar service – Sirius Satellite Radio – quickly joined XM in February 2002.
Less than a year later, land-based radio stations followed the satellite broadcasters into the digital age. In fall 2002, the first terrestrial AM and FM stations began preparing their own commercial digital broadcasts in preparation for the launch of home and car receivers, just days after the Federal Communications Commission (FCC) gave its nod to the technology behind the digital broadcasts. Appropriately enough, Detroit’s own WDMK-FM, located on the home turf of the giant U.S. automakers, became the first American radio station to go digital in early 2003.
Satellite Radio Roots
The FCC awarded satellite digital audio radio (SDAR) licenses to XM and Sirius in 1997 after they successfully bid for spectrum in the 2.3 GHz band. Since receiving their licenses, the two companies have launched high-powered satellites, respectively built state-of-the-art studios in Washington, D.C. and New York, hired DJs, show hosts and other on-air talent, digitized millions of songs and other audio content, secured licensing deals with dozens of radio programmers and formed partnerships with automakers, consumer electronics companies and others.
Both companies provide subscription services offering a mix of ad-supported and commercial-free channels, the latter with near-CD quality. For $12.95 per month, Sirius offers 60 commercial-free music stations and 40 sports, news, talk and entertainment channels (most with commercials). For its part, XM charges only $9.99 per month but offers fewer commercial-free music stations, even though more than 35 of its 70 music channels run no ads. XM also offers 31 news, sports, talk and entertainment channels, most of them with commercials.
Key Benefits, Potential
The key to satellite radio sales is the auto market, given that vehicles outnumber homes by a wide margin. More than 213 million cars and light trucks crisscross highways and local roads today, according to the latest figures from market researcher The Polk Co. That is about twice the number of households (106.3 million) in the nation, according to the latest U.S. Census Bureau statistics.
The rival satellite services aim to provide uninterrupted programming to motorists when they travel from one local-radio market to another (as often happens during a daily commute) or into areas with few or no listenable radio stations. Moreover, they promise to provide this benefit without the multipath distortion that afflicts traditional analog FM broadcasts, which is better known as static.
The most recent U.S. Department of Transportation (DOT) statistics underscore the automotive potential for satellite radio. There are 115 million commuters in the U.S., of which 34 million travel more than 45 minutes each way. On top of that, there are more than 1.1 million long-distance haulers and 9.3 million recreational vehicle owners. In Houston alone, Sirius points out, more than 800,000 people spend at least an hour a day commuting, while 300,000 people commute for an hour or more in Denver.
The satellite services also offer benefits to drivers who rarely venture outside their local radio market, as well as to homebound radio listeners. All consumers can take advantage of the services’ targeted, cable-TV-like ability to deliver a range of music, sports, talk, children’s and news programming to a niche audience often ignored by mainstream terrestrial broadcasters.
The services cover a wide spectrum of musical tastes, from Latin to swing music to bluegrass. They often feature many variations within each musical genre too. There is not one country channel; there are multiple channels offering new country, old country, alternative country and the like. XM’s Latin choices, for example, include Latin jazz, Spanish rock and Tejano. Both companies also dedicate channels to the music of particular decades. There is plenty of news, sports and information, much of it provided by well-known content partners such as CNN, ESPN, BBC, CNBC, Discovery and USA Today.
In contrast, more than 70 percent of all AM and FM stations play only one of five formats – news, oldies, hits, country and urban – XM contends. The satellite services’ programming diversity demonstrates a broad demographic appeal that should help expand the customer base of the car audio aftermarket beyond its core group of male teens and young adults. In fact, XM found that its initial customers were equally distributed over various age groups and did not begin to trail off until age 55.
Some industry analysts believe that 20 percent of all vehicles, or nearly 40 million overall, could end up with satellite radios by 2007, five years after XM and Sirius launched. Others believe that milestone could take up to seven years to reach. But no matter which forecast proves to be more accurate, the services clearly have a long way to go to get there. In April 2003, for instance, XM, by far the leader in the satellite radio market, said its customer count topped the 500,000 mark and predicted that it would reach 1.2 million by the close of 2003.
Challenges
The initial rush of orders indicates that consumers are embracing digital satellite radio with about as much enthusiasm as they welcomed digital satellite television. Despite early satellite operational problems, a launch date that had to be delayed two months because of the Sept. 11 terrorist attacks, financing woes and a sluggish economy, XM reported 483,075 subscribers at the end of the first quarter, up an impressive 135,916 from the end of 2002 and six times the amount that it added a year earlier. Similarly, Sirius – after being beset by its own set of problems and barely avoiding bankruptcy in early 2003 – closed the first quarter with its best performance ever, more than doubling its subscriber total to 68,000.
The challenge facing XM and Sirius is to provide enough compelling programming to lure consumers into subscription plans when they are accustomed to receiving terrestrial radio broadcasts free. How much consumers are willing to pay for satellite radio service, if anything, has been a hotly debated topic in the industry. In CEA Market Research’s latest survey on the subject, 37 percent of consumers said they would be willing to shell out up to $10 a month and another 15 percent said they would pay up to $20 a month. The biggest chunk of consumers (48 percent), however, said they would not spend a dime.
In a separate study in late 2002, J.D. Powers and Associates found that satellite radio did not exactly rank near the top of the list of new and emerging automotive features desired by consumers. Satellite radio notched 22nd place on the list of 25 features, although it did improve to the 18th slot once respondents learned how much all the services would cost.
Even with these questions about price, the installed radio base is clearly quite promising for aftermarket suppliers. Some 95 percent of car owners now have an AM/FM radio in their vehicle, according to CEA Market Research. CEA’s research also shows that AM/FM radios have been the third most popular aftermarket mobile consumer electronics purchase over the last two years, with 32 percent of aftermarket buyer’s spending money on them. Plus, a growing number of online consumers, or 13 percent, who expect to buy some kind of car aftermarket product in the next two years anticipate that it will be a digital or satellite radio.
XM and Sirius certainly promise to make satellite radio a hotly contested market. XM is shooting for 1.2 million subscribers by the end of 2003 and up to 4 million customers, its projected breakeven point, by the close of 2004. In similar fashion, Sirius is gunning for 300,000 subscribers by the end of 2003 and up to 2 million customers, its projected breakeven mark, by sometime in 2005.
However, both XM and Sirius, which already have raised and spent more than $1 billion in capital between them, face continued steep costs in a challenging economy. In separate efforts to position themselves for these challenges, XM closed on a new $475 million funding package in late January 2003 while Sirius completed a $1.2 billion recapitalization in early March.
Aftermarket Deals
Seeing great potential for satellite radio, consumer electronics makers and retailers are seeking to help the two companies reach their ambitious goals. On the product side, one hot new device is Delphi’s XM SkyFi satellite radio system. Billed as the first portable satellite radio, the SkyFi “boom box” allows users to listen to XM’s channels in their cars, homes or anywhere else they may go. In January 2003, XM said it expected about 80,000 SkyFi units to ship to retailers in the first half of the year. Plans call for all 2,100 Wal-Mart stores in the U.S. to start selling the boom boxes and the rest of the Delphi SkyFi radio line by the end of May 2003.
Both Sirius and XM now have lined up a strong roster of CE makers for their aftermarket radio systems. Clarion, Kenwood, Panasonic and Audiovox churn out radios for Sirius while Alpine, Pioneer, Sony, Delphi and Audiovox all produce radios for XM.
Satellite radio also is providing opportunities for the integration aftermarket. For instance, Blitzsafe has developed an inexpensive line of adapter cables to connect an XM tuner to new and aftermarket radios. The Blitzsafe integration products promise to reduce the installation time on premium vehicles with pre-wiring harnesses.
Automaker Partnerships
On the factory side, General Motors, a major investor in XM, is leading the way in satellite radio. GM, which was the first automaker to offer XM as a factory-installed option on its 2002 Cadillac DeVille and Seville models, expanded XM to 25 car, truck and SUV models for the 2003 model year. Plans call for extending XM radio to another 19 vehicles, or 44 of GM’s total 57 lines, for the 2004 model year, including the Chevrolet Malibu mid-sized pick-up, the Chevy Trailblazer SUV and the new Buick Rainier.
In addition to its large GM base, XM, which also is backed by the American Honda Motor Co., has its radios installed in many Honda and Acura models. Plus, Toyota, Isuzu, Infiniti, Nissan, Audi and Volkswagen all are incorporating XM radios into at least some of their new 2004 vehicles.
Sirius is no slouch in this department either. Boasting exclusive partnerships with DaimlerChrysler, Ford Motor and BMW, its satellite radios now are in select BMW, Mini, Chrysler, Dodge, Jeep, Nissan, Infiniti and Mazda 2003 models. Other brands planning to introduce Sirius in their 2004 models include Ford, Lincoln, Mercury, Mercedes-Benz, Jaguar, Volvo, Audi, Volkswagen, Land Rover and Aston Martin
Because satellite radios are addressable, Sirius and XM both intend to provide wireless data and other telematics services to motorists. Among other things, these services would remotely unlock vehicle doors if the keys are left inside, remotely start the engine on cold mornings and even deliver customized content to vehicle owners. In early April 2003, for example, XM and Weather Works introduced a service to deliver detailed, real-time, graphical weather data to mobile users in the marine, aviation and emergency management markets.
XM Exceeds Forecasts
By Amy Gilroy
TWICE
WASHINGTON— XM Satellite Radio announced it expects to gain 300,000 new subscribers in the fourth quarter, exceeding its original guidance of 1.2 million subscribers by the end of the year.
In addition, president and CEO Hugh Panero said at an analyst’s conference that XM expects to overshoot analysts’ predictions for its 2004 subscriber level of 2.5 million.
Panero says XM represents 85 percent of the satellite radio market, adding, “We now have the wind at our backs. We have all the characteristics of a mass-market phenomenon.”
XM added 237,395 subscribers in the third quarter, ending Sept. 30, for a total of 929,648 subscribers.
On the retail front, XM said Wal-Mart is ramping up its selection and should become a bigger factor in future sales. Target is also performing a test market on XM products, said XM.
Sales of the new universal tuner/FM modulator, the XM Commander, are limited at present, although the company said production is ramping up. XM said 18,000 XM Commanders have been produced to date, along with 100,000 new Delphi XM Roadies.
Panero said XM is working with Satellite Radio Direct, Syracuse, N.Y., to package its new XM Direct tuner/antenna kit with cables for various aftermarket and OEM applications. A cable for BMW radios is already available from Blitz Safe, with an Alpine cable expected in January. Cables for several other brands are expected to be announced at CES, Dan Murphy, retail marketing and distribution senior VP, said.
On the new car front, OEM XM sales accounted for more than half the new subscriber additions for the third quarter, with the same split forecast for the fourth quarter, said Panero. General Motors and Honda are expected to manufacture a combined one million XM factory-equipped vehicles in the 2004 model year, with 200,000 of those from Honda. GM expects to account for a total of 400,000 subscribers by the end of 2003, and should reach 1 million subscribers by the end of the first quarter next year, said XM.
Integration Products May Impact Satellite Radio
TWICE
By Amy Gilroy
Twice
ENGLEWOOD, N.J.— For the first time in car audio, aftermarket integration products could impact a new technology, even before the product is fully deployed.
New integration kits for digital satellite radio from Blitz Safe, based here, and other companies are threatening to blur the line between radio brands that will work with XM Satellite Radio or with Sirius service. One of the first of these kits, from Blitz Safe, is selling like wildfire, according to Blitz Safe president/CEO Ira Marlowe, who expects to move a total of 60,000 integration kits in the next six months. Marlowe said 10,000 integration kits have sold in only a few weeks of shipping.
The Blitz Safe integration kit, which retails for $95, specifically allows Kenwood Sirius-ready head units to operate with a Pioneer XM tuner, without degrading the sound as with an FM modulator. Integration kits will also soon be available for Alpine and Sony XM tuners, said Marlowe. Given that Sirius is expected by analysts to acquire 150,000 to 200,000 subscribers for its first year, a loss of 60,000-plus early adopters to XM might be significant. In addition, Kenwood is by far the dominant Sirius supply partner.
Larry Pesce, product management and strategic planning VP for Sirius, said, “Obviously I couldn’t even try to comment upon their unit numbers, because I don’t know what it’s based on. Do we see it as a threat? Not in the least. A true early adopter is reading the magazines and looking at the technology and when we lay our technology and programming against XM, we think the early adopter will select us.” Pesce referred specifically to Sirius’ statistical multiplexing technology and the fact that it has more commercial-free channels.
Another spokesman for Sirius claimed it is working on similar deals with aftermarket and OEM integration companies that will allow XM radios to operate on the Sirius service.
Several other companies, including Precision Interface Electronics (PIE), Chatsworth, Calif., SoundGate, Sheridan, Wyo., and Peripheral, Clearwater, Fla., said they have also begun offering auxiliary input products that allow any factory radio to interface with either of the satellite radio services, when used with a controller/display and an aftermarket tuner. These are the same products that will also work with DVD and MP3.
Reaction to the interface products from retailers appears positive. Dan Jeancola, mobile buyer for Sound Advice, Dania, Fla., said, “I’ve got customers chomping on the bit for it [Blitz Safe]. I have them on order, and as soon as we get it we’ll probably sell through. It’s the early adopters that have a Kenwood radio and they don’t want to wait for Sirius to come to their market. I can tell you I have close to 100 on order for 25 stores.” He said of the budding converter market, “There’s guerilla warfare going on.”
Al & Ed’s said it expected to carry Blitz Safe’s kit in the next 60 days and Crutchfield said it was evaluating the product.
One retailer noted privately that he was concerned about possible legal issues resulting from the integration product, however Blitz Safe vigorously denies any. Alpine VP marketing Stephen Witt agreed, claiming, “To the best of our knowledge it’s not illegal. You do get into some gray areas of copyright and patent infringement, and it’s gray due to the sum of the reverse engineering necessary to emulate the BUS systems that are proprietary to each manufacturer. But it’s gray, it’s not a black-and-white issue.”
Marlowe added, “There are no legal issues. We’re not modifying or affecting anyone’s product or service in any way, shape or form. We’re just giving people choices.”
The ability of OEM integration companies to offer interface products so soon after XM’s national launch is testimony to the growing agility and power of these companies, said industry members.
“This segment of the automotive industry has gotten to where they can, almost overnight, come out with new cables that connect CD changers to a new OEM head unit. Their ability to identify opportunities and react has improved greatly over the years, as they have had to react to the dramatic changes in OEM head-unit integration,” noted XM VP marketing and retail distribution Dan Murphy.
Most suppliers said the issue of integration may become less volatile when Sirius deploys its service nationally in August, and as suppliers begin supporting more than one satellite radio provider. Also, by 2004, radios will be available that can receive both services.
Jeff Abrams, manager of technical marketing and training for Clarion, which just began shipping Sirius tuners and will offer XM aftermarket products next year, said of the integration kit issue, “I think it will become less important as we launch in both platforms.”
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XM Satellite radio introduces XM Direct
Universal Tuner for Car Stereos Now Available for Third-Party Developers, Distributors
Washington D.C., November 17, 2003 – XM Satellite Radio (NASDAQ: XMSR), America’s #1 satellite radio service, today formally introduced XM Direct, an ultra-compact XM tuner module for car stereos.
XM Direct is a universal tuner that can be connected to any satellite-radio-ready car stereo with smart digital adaptors developed and distributed by third-party companies. XM Direct uses an open operating system to give third parties the opportunity to develop a wide range of adaptor cables to satisfy consumer demand in the automobile aftermarket and OEM segments. The third-party adaptors connect the XM Direct to the in-dash stereo system so drivers can tune into XM Radio using their existing stereo controls.
“With XM Direct and smart digital adaptors, automobile dealerships and retailers can now satisfy customers who want to listen to XM through their in-dash stereo, regardless of vehicle or car stereo brand,” said Dan Murphy, Senior Vice President, Product Marketing and Distribution, XM Satellite Radio.
The companies Blitzsafe and Terk Technologies are currently developing a variety of smart digital adaptors for XM Direct. Blitzsafe has developed and shipped the first adaptor for 2003 and 2004 BMW and Mini vehicles, which is sold through Satellite Radios Direct. Consumers will be able to purchase XM Direct from participating BMW and Mini dealers for $299 plus installation.
Ira Marlowe, President of Blitzsafe, said, “This reminds me of the early days when we were instrumental in getting CD changers to become more widely available as a new audio platform. We are very excited to be offering the very first digital adaptor for XM Direct for BMW and Mini. It accurately transfers the superior digital sound quality of XM with full functionality, and it enables key features that can’t be found on the existing BMW and Mini satellite systems. And this is just the beginning. We look forward to introducing more adaptors for more applications in the near future.”
Blitzsafe is working with Alpine to develop an adaptor for its aftermarket car stereos available early next year.
Terk is also aggressively developing adaptors for other exciting applications to be introduced in January at the 2004 Consumer Electronics Show in Las Vegas. All of these adaptors for XM Direct will connect the tuner to the manufacturers’ equipment and provide seamless operation and digital sound quality.
Satellite Radios Direct will sell both the XM Direct tuner and the Blitzsafe BMW/Mini adaptor to provide dealers with one distributor contact for both components through its web site www.SatelliteRadiosDirect.com or by calling 1-888-XM4-CARZ (1-888-964-2279). Consumers who are not near a participating dealer can purchase XM Direct through the website www.radiosandmore.com.
Companies interested in learning more about the XM Direct Development Community can contact Rocco Tricarico, Director of Product Marketing & Distribution for XM Satellite Radio, at xmdirect@xmradio.com.
About XM Satellite Radio
XM is America’s #1 satellite radio service. With over 1 million subscribers, XM is on pace to exceed 1.2 million subscribers later this year. Broadcasting live daily from studios in Washington, DC, New York City and Nashville, Tennessee at the Country Music Hall of Fame, XM provides its loyal listeners with 101 digital channels of choice: 70 music channels, more than 35 of them commercial-free, from hip hop to opera, classical to country, bluegrass to blues; and 31 channels of premiere sports, talk, comedy, kid’s and entertainment programming. Compact and stylish XM satellite radio receivers for the home, the car, the computer and even a boombox for on the go are available from retailers nationwide. In addition, XM is available in more than 80 different 2004 car models. XM is a popular factory-installed option on more than 40 new General Motors models, as well as a standard feature on several top-selling Honda and Acura models.
XM is proud to actively support the lifesaving efforts of The Marrow Foundation and the National Marrow Donor Program to increase the size and diversity of the national Registry of unrelated blood stem cell and marrow donors.
For more information about XM, visit http://www.xmradio.com. Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include demand for the Company’s service, the Company’s dependence on technology and third party vendors, its potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.’s Form 8-K filed with the Securities and Exchange Commission on 6-03-03. Copies of the filing are available upon request from XM Radio’s Investor Relations Department.
XM Exceeds 1,360,000 Subscribers at Year-End 2003
- Over 1 Million Net Additional Subscribers in 2003; Expects to Reach 2.8 Million Subscribers in 2004
- XM Introduces 2004 Programming Lineup featuring 100% Commercial-Free Music Plus XM Instant Traffic & Weather Channels for Major Markets Nationwide
- XM Takes to the Skies with JetBlue Airways and AirTran Airways
LAS VEGAS, Jan. 7 /PRNewswire-FirstCall/ — XM Satellite Radio (Nasdaq: XMSR - News), the country’s number-one satellite radio service, today announced it signed up more than 1,360,000 subscribers, representing 1 million net additional subscribers in the year 2003, extending its market dominance in satellite radio.
“XM delivered an outstanding performance in 2003 with more than 1 million new customers choosing our service this year for a total of more than 1.36 million subscribers overall,” said Hugh Panero, XM President and CEO. “During the fourth quarter of 2003, XM added more than 430,000 customers — our best quarter ever. Equally exciting is the more than 23,000 subscribers who signed up on Christmas Day, the biggest single day in the history of the company. By the end of 2004 we expect to have 2.8 million subscribers, reflecting an increase of more than 1.4 million subscribers during 2004.”
XM Introduces 2004 Content Lineup Featuring 100% Commercial-Free Music plus XM Instant Traffic & Weather Channels
Building on the momentum of 2003, XM announced an exciting content lineup for 2004. XM will offer 100 percent commercial-free music channels beginning in February.
“XM has established itself as the ultimate destination for music lovers. With our new content lineup, the music lover can now get more high-quality music, commercial-free, on XM than on any terrestrial or satellite radio alternative,” Panero said. “The New York Times says XM is the ‘HBO of satellite radio.’ When you combine XM’s live programming with the most commercial-free music channels in satellite radio, it’s clear that XM programming will be even more amazing in 2004.”
In 2004, XM will also roll out XM Instant Traffic & Weather channels, offering listeners in-depth, up-to-date information about road and weather conditions in 21 major metropolitan markets nationwide, 24 hours a day, seven days a week, with greater detail and more frequent updates than available elsewhere.
XM Instant Traffic & Weather will be presented by XM in cooperation with Mobility Technologies, a leading provider of traffic data, and The Weather Channel. The first 15 XM Instant Traffic & Weather channels will debut in March for the following metro areas: New York City, Los Angeles, Washington, D.C., Dallas-Ft. Worth, Chicago, Houston, Detroit, Philadelphia, Phoenix, San Francisco, Tampa-St. Petersburg, Orlando, Baltimore, Pittsburgh, and St. Louis. Dedicated channels for Boston, Atlanta, Miami-Ft. Lauderdale, Minneapolis-St. Paul, Seattle, and San Diego will be introduced later in 2004.
XM’s 2004 lineup features new music channels, including ones devoted to adult contemporary music, top country hits, jambands, alternative rock’s greatest tracks, and cutting-edge punk, plus MSNBC and new talk programs.
In 2004 XM will offer a total of 121 channels — 68 music channels, 32 news, sports, talk, and variety channels, and 21 XM Instant Traffic & Weather channels — for the basic monthly fee of $9.99 a month.
XM Partners with JetBlue Airways and AirTran Airways
In an industry first, XM announced it will provide in-flight audio entertainment to every seat on AirTran Airways (NYSE: AAI - News) and JetBlue Airways (Nasdaq: JBLU - News) flights utilizing a system provided by LiveTV LLC, a wholly- owned subsidiary of JetBlue Airways. The XM in-flight service will be introduced on JetBlue Airways’ existing fleet of Airbus 320 aircraft beginning this fall and on its new fleet of Embraer 190 aircraft when introduced into service next year. AirTran Airways will offer XM on its existing fleet of Boeing 717s this fall, as well as its new Boeing 737 aircraft when introduced into service.
“XM is pleased to partner with outstanding airline brands such as AirTran Airways and JetBlue Airways, who together carry more than 20 million passengers a year. XM will be a great entertainment feature for these passengers, who will have the opportunity to experience our outstanding audio content throughout their flights. This will be a strong, mutually rewarding partnership between XM and these fine, innovative air carriers,” Panero said.
New XM Radio Products
XM announced the introduction of new wireless FM audio adaptors for its popular Delphi XM SKYFi and Roady product lines. The SKYFi and Roady audio adaptors (MSRP $29.99 each) deliver XM to any car with an FM radio system. These sleek accessories plug conveniently into the vehicle’s cigarette lighter. The adapters wirelessly transmit XM to a vehicle’s FM radio and provide power to the receiver.
XM continues to expand its presence in the home with the introduction of the Roady home adapter (MSRP $39.99). The home adapter connects the Roady, which BusinessWeek magazine named a “Best Product of 2003,” to a home stereo or a set of powered speakers.
Finally, the new XM Direct device features a low cost, universal tuner that directly connects to the car stereo system using a smart digital adapter cable (combined MSRP $99.99). Once the XM Direct is connected, you can listen to XM on the in-dash car stereo using the existing stereo controls. Blitzsafe introduced the very first XM Direct adapter cable for BMW and Mini automobiles last fall. Blitzsafe is expected to introduce adapter cables for Alpine and Sony head units in the first quarter. In addition, Terk Technologies is introducing XM Direct adapter cables for Kenwood and Pioneer head units.
About XM Satellite Radio
XM is America’s #1 satellite radio service. With more than 1.36 million subscribers today, XM is on pace to reach 2.8 million subscribers by the end of 2004. Broadcasting live daily from studios in Washington, DC, New York City and Nashville, Tennessee at the Country Music Hall of Fame, XM’s 2004 lineup includes more than 120 digital channels of choice from coast to coast: 68 music channels that will be 100% commercial-free beginning in February 2004, featuring hip hop to opera, classical to country, bluegrass to blues; 32 channels of premier sports, talk, comedy, children’s and entertainment programming; and 21 channels of the most advanced traffic and weather information for major metropolitan areas nationwide. Affordable, compact and stylish XM satellite radio receivers for the home, the car, the computer and boom boxes for “on the go” are available from retailers nationwide. In addition, XM is available in more than 80 different 2004 car models. XM is a popular factory-installed option on more than 40 new General Motors models, as well as a standard feature on several top-selling Honda and Acura models.
For more information about XM, visit http://www.xmradio.com.
Factors that could cause actual results to differ materially from those in the forward-looking statements in this press release include demand for the Company’s service, the Company’s dependence on technology and third party vendors, its potential need for additional financing, as well as other risks described in XM Satellite Radio Holdings Inc.’s Form 8-K filed with the Securities and Exchange Commission on 6-03-03 and Form S-3 filed on 8-08-03. Copies of the filing are available upon request from XM Radio’s Investor Relations Department.
BlitzSafe Expects 3 Mil. XM Subscribers Within Three Years
So says Ira Marlowe, President/CEO of the automotive aftermarket manufacturer. BlitzSafe’s new line of XM “Digital Connect” cables enable any aftermarket car radio with an auxiliary input to play XM’s service, cutting installation time to 15 minutes. Marlowe tells R&R ONLINE that his company is rolling out several products to support XM and its rival, Sirius. “This is exciting for us, the most exciting technology since FM radio,” Marlowe says. “We think BlitzSafe will be able to move 150,000 to 200,000 units in 2002.”
XM signs over 30,000 subscribers in first 8 weeks
Washington D.C., January 07, 2002 — XM Satellite Radio (Nasdaq: XMSR), America’s first nationwide digital satellite radio service, already has more than 30,000 paying subscribers, making XM the fastest-selling audio product of the last 20 years, company President and CEO Hugh Panero announced today at a Noon news conference at the 2002 International Consumer Electronics Show (CES).
“In 12 short months, XM Radio has gone from a PowerPoint presentation to the ‘Product of the Year,’” Panero said, 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.” As another reference point, Panero noted, Echostar, the DBS provider, at the end of its first 70 days of national operations had 31,000 subscribers.
“Will people pay for radio?” 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.”
Since last year’s CES, XM launched its two satellites; completed its chipset technology, allowing several months lead time required for testing, manufacturing, shipping and merchandising; and completed its national rollout Nov. 12, just 45 days after launching in its two lead markets, because its technology had been proven months earlier. “Simply put, we’ve executed our plan and kept our rollout promises made at last year’s CES,” Panero said. “Rather than being one year behind our competitor to market, we have a nine-month nationwide lead.”
XM Releases Compelling Results of Retail and Customer Satisfaction Research
XM’s performance makes it the fastest-selling audio product in 20 years, according to independent research results the company released. The compact disc player sold 7,800 units in its first 60 days, based on Consumer Electronics Association data (35,000 units in its first nine months), and the DVD player sold 8,600 units in its first 60 days, according to NPD Intellect data.
“XM is rapidly becoming a consumer electronics entertainment standard just as the CD, VCR, DBS and DVD did before it,” Panero said. “The positive consumer acceptance of XM is particularly gratifying in light of the challenging economy: what merchandisers call the most difficult retail environment in a decade. In the face of all this, consumers reacted strongly to XM and we are the economic stimulus for the audio product 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 is on track to top first-year sales of CD and DVD players and parallel first-year growth of DBS, the Group reported.
Consumers also embraced XM. In a customer satisfaction telephone survey recently conducted for XM by Greystone Communications, a media research and planning firm, 94 percent of respondents rated XM’s overall service “excellent” and 92 percent called the sound quality “excellent.” And 99 percent said XM was a “good” or “excellent” value at $9.99 a month.
Feedback from the CEOs of leading consumer electronics retailers has been outstanding. “XM was one of our hottest new products during the 2001 holiday season,” said Allen Lenzmeier, President of Best Buy Retail, one of several top retail executives featured in video testimonials at XM’s news conference. “Customer feedback has been incredibly positive.”
In 2002, XM Expands Radio Product Line and Retail Distribution, Augments Website
XM is already working on the next wave of products and technology advances and expanding retail outlets, Panero announced, offering several examples:
- XM intends to achieve significant sales in 2002 from expanded distribution through Sears and participating RadioShack dealers and franchisees.
- Sony, building on the success of the “Plug-and-Play” unit, will now offer XM radios as part of its Xplod car-stereo lineup, with 12 different XM-ready models. In addition, 1.5 million Sony car stereos sold in ‘00 and ‘01 are backward-compatible with XM. Sony will increase production of the “Plug-and-Play” home kit to meet strong market demand.
- Alpine will also begin offering a universal receiver that will enable any existing car stereo to receive XM.
- Blitzsafe, a world leader in audio integration products, is creating an inexpensive line of adapter cables that will digitally connect an XM tuner box to a wide range of new car and aftermarket radios and significantly reduce the install time on premium vehicles with pre-wiring harnesses.
- XM’s website, www.xmradio.com, which has generated more than 50,000 subscriber leads, has recently been upgraded to add a variety of new features such as programming highlights; the creation of the XM Signal, XM’s weekly email newsletter; online voting for favorite pop hits to be played on XM’s top 20 channel, 20-on-20; improved on-line subscriber activation features; an increased number of retailers available on XM’s dealer-locater screen; and a dealer extranet.
XM Revolutionizes Radio with Programming Depth, Breadth and Reach
“What is clear is that our listeners love the programming,” Panero said. With 82 state-of-the-art digital studios, XM is transforming radio, an industry that has seen little technological change since FM, almost 40 years ago. 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, talk, children’s and entertainment. XM also brings to the car, for the first time on radio, the same diverse selection of 24-hour news sources available in the home on cable and DIRECTV.
“XM, at our core, is music,” Panero said. Since XM launched nationally, it has created over 90,000 hours of amazing radio for its music channels alone, playing more than 1.4 million songs across every genre. And XM has only scratched the surface, with more than two million songs in its music library, one of the largest collections on the planet. In addition, XM has 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.
XM has also aired the first coast-to-coast radio broadcasts of NASCAR events through its exclusive relationship on its dedicated NASCAR channel, the World Series and more recently the College Football Bowl Championship Series on its ESPN Radio channel; world premieres of new albums from Prince, Pink Floyd, and an unreleased 1963 Rat Pack performance featuring Frank Sinatra, Sammy Davis Jr. and Dean Martin. XM also aired a number of “live” concerts including Handel’s “Messiah” from Trinity Church, 600 feet from ground zero; a Sting concert and a five-hour concert from VH1 to benefit the NYC victims of Sept. 11. When George Harrison passed away, XM honored the ex-Beatle immediately with a four day tribute - commercial free. Wynton Marsalis, hailed as the outstanding Jazz musician of his generation, broadcast live from New York when XM capped its national launch. Marsalis and legendary impresario Quincy Jones, who will be among the host of artists at XM’s CES booth this week, are both members of XM’s artist family and are creating radio shows exclusively for XM.
“Listeners continue to comment how deep our channels are and how they hear songs long forgotten by mainstream radio,” Panero said.
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 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. Leading manufacturers such as Sony, Alpine and Pioneer offer a broad array of XM radios including models that will easily 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 offering many other great features. 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. For more information, please visit XM’s web site: www.xmradio.com.
BlitzSafe News
WASHINGTON— XM Satellite Radio will embark on a major push into 12-volt retailers, now that it is selling its own branded products.
While Sirius is making inroads into the home stereo market with new audio rack system components, XM says its focus next year will be to build its retail presence.
To that end, the company will launch Dec. 1 a $60 mail-in rebate on the XM Commander, a universal XM tuner/FM modulator, when a customer purchases one along with any aftermarket car stereo head unit. The company said it will have enough product in stores by December to support the rebate. The price of the XM Commander, after the promotion, is $99.
According to Dan Murphy, XM’s senior VP, retail marketing and distribution, 12-volt retail sales of satellite radio products, until now, have been hampered by high-priced tuners. “When someone comes in to buy a $179 head unit and you’re trying to sell him a $250 [satellite radio] attachment, it doesn’t work. Satellite Radio accessories should optimally cost $69 to $99 or lower,” he said.
XM said it is hoping the Commander will become a significant part of its sales portfolio. Murphy said the XM Commander should account for at least 20 percent of all XM product sales, from a pool that also includes the Delphi Roady, the Delphi XM SkyFi, XM Direct and the XM PCR for computers.
Murphy said the rebate is designed to draw two types of customers. “We’re giving the retailer a tool to increase his attachment rates with his current store traffic, for the customers that come in to buy a new head unit,” he said, noting the Commander has RCA jacks for direct head-unit attachment. Retailers can also use the product to attract customers who may have an OEM system they are happy with, but who want to add XM via the Commander’s FM modulator, he said.
“If every single car stereo head unit was sold with an XM tuner, retailers would increase their business by 50 percent,” Murphy added.
