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Satellite-Radio Providers Driving Beyond The Car

5/20/2003 12:38:00 PM Eastern

New York - XM Satellite Radio and Sirius are stepping up their drive to expand usage outside the car, with Sirius planning later this year to offer its first commercial receivers and its first multizone receivers for use with custom-installed distributed-audio systems.

Executives of the two satellite-radio companies outlined the importance of home and portable applications today during SkyFORUM, the satellite-service industry's semiannual financial symposium. Their comments followed the introduction in recent weeks of discounted service plans to XM and Sirius subscribers who activate more than one receiver.

"The home application is emerging as an important one," said Steve Gavenas, XM's programming and business development executive VP. The market was "not focused on by either of us early on," but home subscribers are "becoming an important component" in XM's plans because, "by and large," terrestrial radio "is not an exciting listening experience," he said.

Sales of the recently launched Delphi-made battery-operated XM boombox "are flying off the shelves," he said. Delphi and Sony also offer transportable XM models that can be shuttled between home and car docking stations.

As part of its effort this year to erase the "receiver gap" with XM, Sirius said home and portable units would figure prominently. "Last year, we didn't quite have the portfolio of hardware needed to keep pace with the growth we expected," said Larry Rebich, Sirius programming and market development VP. This year, the company's partners are launching 40 new Sirius-ready head units, Sirius' first two transportable home-car models (due in the summer from Kenwood and Audiovox), dedicated home units later in the year and by the end of the year, Sirius' first multizone receiver for home-install applications.

Another Sirius representative told TWICE that a battery-powered Audiovox boombox is due in September or October and that a Sirius "Walkman-type" portable is due by the end of the year. Later this year, Sirius will also offer receivers for commercial applications, he said.

Rebich called satellite radio a "ubiquitous product" whose presence in the car is "critical" to the satellite companies' success but whose usefulness is not limited to the car.

For its part, XM sees opportunity in commercial applications but will focus on its core business for now, Gavenas said.

In other comments, XM's Gavenas noted that his company would like to add more premium channels like XM's Playboy channel but is currently focused on driving its core business, reaching 1 million subs by year's end, and reaching the break-even point.

In other comments:

* XM's Gavenas said the recent conclusion of digital performance rights negotiations with the music companies has led to "exciting programming results." XM is "seeing a very positive response from the labels," he said.

* Sirius's Rebich saw potential in providing the audio feeds of the broadcast networks, datacasting of stocks and sports scores, a mobile video service and premium audio channels but didn't outline a timetable.

* Fox News, which simulcasts its cable-channel audio over XM, has reached an audience of people who spend a lot of time in their cars and don't want to lose a program when they travel, said Jack Abernathy, executive VP of the Fox News Channel. Cable-channel listeners also turn to XM to continue listening to a Fox program when they leave the house, he added. Fox consistently turns up as one of XM's top five channels, said Gavenas.

* The core of the Playboy channel's fan base is truckers, which Playboy didn't expect, said Playboy VP Seth Chasin.