Satellite radio
Satellite radio is a digital audio broadcasting service designed to provide a broader and more diverse array of programming compared to traditional AM and FM radio stations. It emerged in the 1990s when satellite technology companies successfully lobbied for the use of a specific frequency band to develop a new radio service. The first major players, XM Satellite Radio and Sirius Satellite Radio, launched their services in the early 2000s, quickly gaining popularity due to their extensive programming options, which included genres like electronic music, comedy, and sports.
The service became particularly appealing to consumers in vehicles, with partnerships established between satellite radio providers and major automobile manufacturers to include receivers in new cars. One notable feature of satellite radio is its lack of FCC regulation, allowing for more freedom in content compared to traditional radio. However, this does not mean complete freedom from all regulations, as some decency standards still apply.
In 2008, XM and Sirius merged to form SiriusXM, aiming to consolidate resources and provide a unified platform for their content. Despite facing financial challenges, SiriusXM continues to operate as the sole satellite radio provider in the United States, offering an extensive lineup of channels and programming, including on-demand content. The rise of satellite radio has prompted terrestrial radio companies to adapt by developing their own mobile applications and streaming services to compete with the convenience and variety offered by satellite providers.
Satellite radio
Satellite radio was conceived as an alternative to traditional AM and FM stations. It addressed several issues consumers had with existing radio stations, notably the small broadcast area of most stations, the presence of commercials, and the limited variety of programming.
In the 1990s, satellite companies, looking for additional applications of their technology, convinced the FCC to set aside a portion of the 2.3 GHz S band (a section of the spectrum previously reserved for radar, NASA communications, and wireless network signals) for a digital audio radio service. In 1997, two licenses were awarded to XM Satellite Radio and CD Radio (later renamed Sirius Satellite Radio).
Launch and Initial Reaction
In September 2001, XM launched its service in two markets, San Diego and Dallas. After a promising initial response, it made the service available nationwide in November. In February 2002, Sirius launched in four states, followed by a nationwide rollout completed in July. Both companies offered a wider variety of programming than what was typically available on terrestrial radio, including stations focused solely on electronic music, comedy, and reggae. The services were successful; XM gained over thirty thousand subscribers within the first eight weeks of operation.
While subscriptions continued to increase, both companies realized that in order to gain more listeners they had to enter the space in which most Americans listened to terrestrial radio: their cars. XM announced a partnership with General Motors in early 2002. By the start of the next year, XM receivers came standard in vehicles from Volkswagen, Toyota, and Honda. Sirius followed suit, placing their receivers in vehicles made by BMW, Dodge, and Ford.
Sensing yet another potential market, both companies entered negotiations for broadcast sports rights. In December 2003, Sirius announced that they had made a $220 million deal to be the exclusive satellite radio broadcaster for the National Football League (NFL) through 2010. XM responded by entering negotiations with Major League Baseball (MLB). In 2004, they announced a $650 million eleven-year broadcast contract.
Censorship Refugees
In 2004, radio broadcaster WNEW dropped talk show hosts Gregg “Opie” Hughes and Anthony Cumia after they hosted a controversial segment that provoked protests from the Catholic League. Shortly afterward, the Opie and Anthony show moved to XM. Since the FCC had no control over the aired content on satellite radio, the hosts felt they would be able to say or do what they wanted without fear of repercussions.
The year 2005 saw a significant censorship crackdown on radio and television following singer Janet Jackson’s brief moment of accidental exposure during the Super Bowl XXXVIII halftime show. This prompted “shock jock” Howard Stern to announce that he disliked being on a medium that was subject to government censorship. In 2006, he moved his radio show to Sirius. The company awarded Stern with a $100 million operating budget, as well as stock bonuses. In exchange, a large number of subscribers joined Sirius to listen to Stern’s show.
While satellite radio content is not susceptible to FCC regulation, hosts are still required to comply with certain decency regulations. Following an Opie and Anthony segment in which a character from the show made offensive comments about then secretary of state Condoleezza Rice and First Lady Laura Bush, XM suspended the radio hosts for thirty days. Fans of the show were outraged, and many canceled their subscriptions in protest of the suspension.
Merger
Despite successful placement in vehicles and increased subscriptions, and a large line-up of celebrity-hosted shows and sports programming, by 2007 both Sirius and XM faced bankruptcy due to mounting corporate debt. On February 19, the two companies announced plans to merge, citing that exclusive content rights were harmful to both companies, since they forced users to choose one or the other. Additionally, the merger allowed the companies to reduce staff and budget in redundant areas. Content previously exclusive to each network (such as MLB and NFL games) became accessible to all subscribers for an additional monthly fee. Previous FCC rulings stipulated that such a merger would violate licensing and monopoly regulations. However, the companies protested the ruling. In June 2007, the FCC announced that it would review the potential merger and provide a verdict within six months, but no decision was made by the deadline. To demonstrate support for the merger, the companies held shareholder votes. Shareholders approved the proposed merger by a wide margin. In July 2008, the FCC finally approved the merger, on the conditions that the companies keep as many channels from both providers as possible and that subscriber rates not be increased for three years. On July 29, the companies merged under the name SiriusXM. Nonetheless, the new company still experienced financial difficulties. In February 2009, it was announced that SiriusXM had hired financial advisers in preparation for a potential bankruptcy filing. Media mogul John Malone rescued the company by providing $500 million in exchange for 40 percent ownership.
Impact
SiriusXM continues to broadcast. Since the merger, it has dropped some radio channels from its lineup, but it continues to offer a broader variety of programming than terrestrial radio. Some content is available to subscribers on demand. Though the merger freed up a satellite radio license, no company has applied for it, and SiriusXM remains the sole satellite radio company in America. Some companies have attempted to bring satellite radio to other countries, but success has proved elusive; as of 2017, the longest-lived satellite radio service outside the United States was WorldSpace, which served Africa and the Middle East from 1999 to its bankruptcy in 2008. In response to satellite radio’s nationwide availability and genre offerings, terrestrial broadcasters ClearChannel and CBS have created mobile phone applications and streaming websites, making a wide selection of their stations available to smartphone users and radio listeners nationwide.
Bibliography
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