XM Satellite Radio took the wraps off its launch plans for the new 100 channel digital satellite radio service, which will kick off in two markets Sept. 12, accompanied by a $100 million advertising campaign for the total launch.
At a news conference here, president and CEO Hugh Panero said XM will begin commercial service and sales in the Dallas-Fort Worth area and San Diego, expanding the rollout to the entire Southwest in mid-October, with nationwide sales to begin in November. A total of 5,000 retail storefronts are expected to participate in the launch this year, including 1,600 independent stores.
XM also finally revealed its exact programming lineup, which will consist of 71 music channels — more than 30 of which are commercial-free — and 29 news, talk, sports and entertainment channels.
The media campaign, equivalent to the size of Sony PlayStation's annual budget at $100 million, will kick off Aug. 10 in approximately 3,000 movie theaters with a 60-second spot featuring B.B. King, Snoop Dogg and David Bowie. Seven different 30-second TV spots, some with the same artists, will also air as part of the $45 million campaign earmarked for the fourth quarter this year. The campaign centers on the theme, "Radio to the Power of X," and was developed by TBWA/Chiat/Day. It will also include radio, print and in-store merchandising.
Panero claimed that XM "intends to change radio the way cable and DBS changed television, by providing compelling entertainment choices to consumers." Its programming lineup will include six "decades' channels (from the '40s to the '90s), five country channels, 15 hits channels, as well as 10 rock, seven urban, six jazz and blues, five Latin, seven world, and four classical music channels. The lineup also includes two children's channels, 12 news channels, five sports channels, three comedy and nine variety channels.
Panero said that he expects the company will sell between 60,000 and 75,000 subscriptions this year. "Our radio manufacturers are prepared to ship 40,000 to 50,000 radios per month and can ramp up to 80,000 a month quickly if necessary," he added. Ninety- five percent of radio sales this year are expected to come from the aftermarket and the remainder in OEM radios offered by Cadillac. Next year, OEM sales will expand as General Motors offers the radios through more car divisions, he continued.