They began as supernovas, literally. A race into space pitting 2 start ups—XM based in Washington, DC and Sirius based in New York. Sirius actually launched its satellite first on November 30th 2000. XM followed on May 8, 2001. However, XM began broadcasting in September 2001 while Sirius began in July 2002. As a result XM Radio had the initial subscriber lead.
The race for talent and programming began. Baseball, football, NASCAR, etc. and then the big whopper, Howard Stern. The cost of programming was staggering. XM and Sirius were always behind the curve financially with a business model that made it more and more difficult to envision a profitable future.
The satellite industry was understandably unpopular among the traditional, “terrestrial” radio folk which saw the threat of audience erosion. Initially XM and Sirius committed to solo independent operations without the possibility of merger. Later they successfully lobbied for a merger in 2008, but by that time they were on the literal edge of the financial cliff. Sirius XM ultimately came perilously close to the edge of the cliff, but through outside investment by Liberty Media which took a 40% stake in the company, avoided falling into the financial abyss. Financially, Sirius XM Radio is in a far better place; its stock which had plummeted to a low of 5 cents per share, and was facing delisting from NASDAQ, is now trading consistently at more than $2 per share.
Today, Sirius XM Radio broadcasts more than 135 channels of commercial-free music, sports, live news, talk, comedy, entertainment, traffic and weather to more than 21 million subscribers. Sirius XM symbolically celebrated their 10th anniversary earlier this month with a broadcast of a Bruce Springsteen & the E Street Band concert from the Apollo Theater inNew York.
We at MayoSeitz Media have always been supportive of satellite radio as a viable radio alternative delivering national audiences. Nonetheless local terrestrial radio has and will continue to deliver larger local audiences. Terrestrial radio did not crumble in the face of the now 10 year old satellite radio industry. They have both found a way to both survive and sometimes thrive as new technologies, Pandora and more to come, arrive.
Nothing stays the same. Perhaps soon, satellite radio will be called “traditional radio” as well.