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XM, AOL Plan Online Radio During Summer

America Online and XM Satellite Radio have joined forces to create an online radio service.

The service will begin this summer and will carry both the AOL and XM brands. It is expected to help broaden awareness of XM, given that AOL has approximately 100 million users, said an XM spokesman.

“It’s an important way for us to continue to build our brand and expose new people to our content. In what we’ve seen in other scenarios, ranging from our joint promotions with Starbucks to Avis to airplanes, once people have an opportunity to experience our content, there’s a strong likelihood they’ll become permanent customers,” said the spokesman.

The new service will be offered in two flavors — basic and premium. The basic service will be free to all users. The premium service will carry an undisclosed fee for non-AOL members, but it will be free to AOL subscribers.

The basic service will include a sampling of 20 XM radio stations plus 130 AOL Radio stations. The premium version will offer over 70 XM stations and more than 130 AOL Radio original and third-party stations.

XM said AOL’s current online radio service attracts 10 million listeners.

As part of the arrangement, XM will integrate select AOL original programs into its standard satellite-radio service such as Radio KOL, AOL Music Sessions and AOL Music LIVE! These will be interspersed across XM’s current channels rather than offered as a separate AOL channel on XM.

“Our philosophy at XM has been to work with strong partners at every level: retail, automotive and now online to build awareness and subscriptions for XM,” said Hugh Panero, XM’s president/CEO.

XM also announced a deal with Zipcar, a rent by the hour or day car service, to offer XM in Zipcar autos. Beginning last Wednesday, XM receivers will be activated in Zipcar’s fleet of 500 cars in 21 cities (including Boston, New York and Washington) at no additional cost. Panero sees it as “a great way to promote our service” to the 35,000 Zipcar members. The car firm claims they get about 1,500 new customers a month.