[Swprograms] New WSJ buzz on satellite radio in an automotive feature

["Richard Cuff" <richard@xxxxxxxxxxx>]

>From today's WSJ

Richard Cuff

-------------

 EYES ON THE ROAD
By JOSEPH B. WHITE







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ABOUT JOE WHITE



Joseph B. White writes Eyes on the Road every Monday for the Online Journal.
His column offers readers insight into the top consumer issues in the
automotive industry, ranging from car pricing to safety to the latest
gadgets.



Joe is the Detroit bureau chief for The Wall Street Journal, and has worked
for the Journal since 1987. For most of that time, he has covered the auto
industry from Detroit. In 1993, Joe and then-Detroit Bureau Chief Paul
Ingrassia shared a Pulitzer Prize for beat reporting for their coverage of
management turmoil at General Motors. Paul and Joe co-authored a 1994 book
about the American auto industry in the 1980s and 1990s, "Comeback: The Fall
and Rise of the American Automobile Industry." Joe also contributes new-car
reviews to Smart Money magazine. A graduate of Harvard University, he lives
with his family outside Detroit and commutes in a 2004 Subaru WRX.



Send comments about Eyes on the Road to Joe at joseph.white@xxxxxxxxx





Liftoff for Satellite Radio
Auto Makers Look to Offer Technology
As a Way to Stand Out in the Market
October 25, 2004
Last week I faced a dilemma. I had to drive most of the way from Detroit to
New York City -- but I also had to listen to the seventh game of the
American League Championship series between the Boston Red Sox and the New
York Yankees. Fortunately, I had arranged to borrow a 2005 Jeep Grand
Cherokee from DaimlerChrysler for a review. The Jeep was equipped with the
Sirius Satellite Radio service, and one of the dozens of channels was ESPN's
broadcast of the game. For nearly four hours, I drove across the wilds of
western and central Pennsylvania, and I heard it all -- from Johnny Damon's
first home run to the Yankee Stadium crowd taunting Pedro Martinez with the
"Who's Your Daddy?" chant to the final out.
Somewhere around Clarion, Pa., it hit me that the play by play had not faded
into static during a crucial at-bat. I hadn't had to stab frantically at a
tuner button to scour the airwaves for an AM sports station. I began to
think, "Maybe this satellite radio isn't such a crazy idea." In fact, after
a slow and uncertain start, satellite radio appears ready to take off -- and
the auto industry is a big reason why.

1

See Consumer Reports' guide2 to XM and Sirius satellite radio.


Howard Stern's announcement3 that he plans to move his act to Sirius
starting in 2006 got a lot of attention, as did, in different circles, XM
Satellite Radio's hiring of former National Public Radio morning host Bob
Edwards. Major League Baseball last week announced a deal to give XM the
rights to broadcast games during the 2005 season.
These are significant steps for the nascent satellite radio services. But
the big driver behind satellite radio's robust growth forecasts is the
growing enthusiasm for it among car makers, which see the technology as a
fresh way to stand out from the crowd. Steve Black at SkyWaves Research, an
independent research firm, says that by the end of the decade, his company
projects the number of satellite radio service subscribers will reach 40
million, a ten-fold increase from the 4 million subscribers seen by the end
of this year. Of those roughly 4 million, about 3.2 million are with XM
Radio, and just over 900,000 are with rival Sirius. "It's arrived right
now," Mr. Black says of satellite radio.
General Motors and Honda have led the way in using factory-installed
satellite radio as a way to stand out from competition. GM, which owns an 8%
stake in XM, was the first auto maker to offer satellite radio as a factory
option in 2001 and now plans to offer XM on more than 50 of its 2005 models.
Honda, which is much smaller than GM, owns a 9% stake in XM and has also
been increasingly bold about using satellite radio to set its new models
apart. Honda's 2005 Acura RL model features XM Radio and a real-time
traffic-information service that feeds information about traffic delays from
an XM satellite into the map displayed on the car's navigation system.
Satellite radio can potentially be "a pipe to every car in the U.S.," says
XM Radio spokesman Chance Patterson. Radio programming, he says, is just the
beginning. Traffic is the next frontier, with other information or
entertainment services possibly following.
Now, Chrysler and Ford, which had moved more slowly to push Sirius radio
receivers into their vehicles, are accelerating plans to offer the service
as a factory-installed option. Some other brands are offering consumers a
choice between XM and Sirius.
VISIT THE AUTOS PAGE



Visit the Online Journal's Auto Industry page4, offering the latest consumer
and business news about cars, trucks and the companies that make them.


Satellite radio operates on a different business model than AM or FM
radio -- this is radio you pay for as you would cable television. Currently
XM charges $9.95 a month and Sirius charges $12.95 a month. In return, you
get more than 100 channels of programming, much of it commercial-free. With
either service, for example, a country-music fan can dial in a channel that
features classic country -- Johnny Cash and Hank Williams -- or a different
channel for modern country stars like Toby Keith. Don't ask why, but I have
come to enjoy the all-comedy channels on satellite-radio-equipped cars I
have test-driven lately. I would never buy a comedy CD, but listening to
Bill Cosby or Jeff Foxworthy on the radio can be just the medicine required
after a long day.
Mr. Black at SkyWaves says satellite radio has moved out of its
early-adopter phase and reached the point where it's about to be fully
accepted in the mass market. A major push to tip satellite radio into the
mainstream could come from Toyota, the No. 4 manufacturer in the U.S. car
market. Toyota currently offers XM Radio as a dealer-installed option. If
Toyota decides to follow its rivals and push satellite radio as a factory
feature -- the way to generate real volume -- it probably won't be very long
before satellite radio becomes a commonplace feature.
Of course, not everyone wants to pay $10 or $12 a month for a service that
used to be free. But they said that about cable television at one point,
too. The satellite-radio companies are pushing hard to broaden demand for
their services, rolling out new receivers designed for home use or to be
carried from home to car and back. On Tuesday, XM plans a major new-product
announcement in conjunction with Delphi, the big automotive-radio maker.
Speculation is that product will be a portable satellite-radio device
comparable to a Walkman or iPod. (Mr. Patterson wouldn't comment in advance
of the event.)
Still, satellite radio is a reminder that few industries can reach as many
consumers as rapidly as the car business. Car makers have a history of
missing market trends and coming late to parties that others have started.
But when auto makers finally move, they can have enormous influence over the
growth and acceptance of new technology.
"Without GM," says XM's Mr. Patterson, "satellite radio probably doesn't
exist today."
. Send comments about Eyes on the Road to joseph.white@xxxxxxxxx

URL for this article:
http://online.wsj.com/article/0,,SB109847842388353413,00.html


Hyperlinks in this Article:
(1) http://www.wsj.consumerreports.org/report21.html
(2) http://www.wsj.consumerreports.org/report19.html
(3) http://online.wsj.com/article/0,,SB109706646880937838,00.html
(4) http://online.wsj.com/industry/0,,DAU,00.html
(5) mailto:joseph.white@xxxxxxx
(6) mailto:joseph.white@xxxxxxx



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