- The Washington Times - Wednesday, November 14, 2001

XM Satellite Radio Inc. Chief Executive Hugh Panero has great timing.
Mr. Panero is in the midst of a 25-day promotional tour of major American cities to tell consumers XM finally has made its high-tech, digital radio available nationwide.
But much of the work has been done for him.
Just this week, Popular Science gave XM its "Best of What's New" award for 2001.
And Time magazine said XM, based in the District, has one of the best inventions of the year.
XM, which beams a digital signal from two satellites orbiting Earth to receivers nationwide designed to capture the transmissions, plans to bring its promotional blitz to the District today.
"It's important to launch in every major market. There is a particular enjoyment and satisfaction in launching in your hometown," Mr. Panero said.
The company began a limited rollout of its radio service on Sept. 25, but it has declined to indicate how many people have signed up for the service, available first in Dallas and San Diego. Mr. Panero says he expects more than 100,000 receivers to be on the shelves of retail stores by Christmas.
"We're getting a lot of interest. Much more than expected," said Alan Rimm-Kaufman, spokesman for Charlottesville consumer electronics retailer Crutchfield Corp.
Vijay Jayant, satellite analyst at investment bank Morgan Stanley Dean Witter, predicts XM has signed up about 5,000 subscribers since it became available seven weeks ago.
XM should be able to attract up to 25,000 subscribers by the end of the year, he said.
Mr. Panero said earlier this year XM could sign up 100,000 subscribers by the end of the year.
"I think the early estimates of sign-up rates were a little ambitious. I think [adoption] will be much more protracted," said Tom Taylor, editor of M Street Daily, a radio-industry trade publication in Nashville, Tenn.
XM needs about 4 million subscribers to break even, analysts predict. Mr. Panero has said the company can reach that threshold by 2004.
Music lovers are embracing the new service, Mr. Taylor said.
"The most motivated audience is a group of people who are looking for niche formats that they can't tune in on their radios. You can go deeper into a musical genre with satellite radio than you can with terrestrial radio," he said.
XM uses its satellites to blast digital signals for 100 channels of static-free music and news.
"This is a market where niche programming has disappeared," Mr. Panero said.
But XM's subscription-radio service costs $9.99 a month, and the company must overcome the hesitation people may have to pay for a service that, until Sept. 25, had always been available free of charge, said Dennis Wharton, spokesman for the National Association of Broadcasters, which represents terrestrial radio stations
. Not only does the service cost money, but receivers that capture XM's digital signal can cost up to $300.
In addition, radio listeners are used to getting local news and information over their radios, Mr. Wharton said. But XM, whose signals are available throughout the country, offers news and information for a national audience.
"Those are pretty considerable hurdles. Radio has survived nicely with a lot of people predicting its demise," Mr. Wharton said.
In introducing service nationwide this week, XM beat its only other direct competitor, Sirius Satellite Radio Inc., of New York. Sirius said last month it will delay service until next year, and it will update investors on its plans today.
XM shares rose $1.79, or 26.5 percent, yesterday on the Nasdaq Stock Market, closing at $8.55 a share.


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