- The Washington Times - Tuesday, September 25, 2001

The future of radio arrives today.
It is heavily funded and bears little resemblance to its past.
XM Satellite Radio Inc., a 9-year-old company based in the District, has overcome regulatory hurdles and the technical challenges that come with beaming radio programming from a pair of satellites to receivers on earth. Today will mark the first major change to radio since the advent of FM in 1961.
"It's very 21st century," XM programming director Lee Abrams said.
The studios at XM's Northeast Washington headquarters look nothing like those of WQAM-FM in Miami in the late 1960s, where Mr. Abrams, now 49, worked as a teen-age disc jockey.
"In the old days, the studios would have records and notebooks all over the place. Now it's very clean and organized," Mr. Abrams said.
XM delayed the start of service almost two weeks because of the Sept. 11 terrorist attacks on America, but now it is ready to usher in the age of the digital disc jockey.
Computers, as common at XM as sound boards, connect each of the company's 82 studios to a hard drive that has 1.2 million song files. To play a song, the disc jockey simply types in the title on a computer keyboard. Compact discs are stored on the third floor of the building, a former printing plant. The CDs that disc jockeys want to retain are digitized and loaded into the system.
A disc jockey will work an entire shift without touching a compact disc.
"You have so much at your fingertips," Mr. Abrams said.
Satellite radio is not a single station. XM is 100 stations 71 music stations and 29 stations featuring talk radio, news and entertainment. The satellite sends a signal for each separate station to each receiver, without the static that can accompany standard terrestrial radio.
But satellite radio's most striking change from terrestrial radio may be that consumers have to pay for it.
Listeners in San Diego and in Dallas and Fort Worth, Texas, who are willing to pay $9.99 a month can begin receiving XM's crystal-clear satellite signal today. The company plans to beam its signal to receivers which consumers can buy at retail stores in the rest of the country by November.
XM Chief Executive Hugh Panero predicted last month the company will have an estimated 100,000 subscribers by the end of the year. XM will need about 4 million subscribers to break even, and Mr. Panero predicts the company will cross that threshold by 2004.
The company plans to reach its goal by tapping into the automotive market and pitching to commuters. General Motors Corp., which owns 12 percent of XM, will offer the satellite receivers as an option in more than 20 models of its 2003 cars and light trucks.
GM will put receivers in 2002 Cadillac Sevilles and DeVilles beginning in November.
XM's agreement with GM comes at a cost. XM will pay the automaker $35 million over the next four years, according to a document filed with the U.S. Securities and Exchange Commission. After those payments are complete, XM will make annual payments from $35 million to about $130 million through 2009.
The high cost of doing business also separates XM from terrestrial radio. XM has raised $1.3 billion in venture capital. The company anticipates it will need an additional $250 million to $300 million through 2002 and more funding after that, according to SEC filings.
If XM doesn't convince enough listeners to pay for radio, the company could be in jeopardy.
Funding aside, XM overcame its most immediate barrier last week when the Federal Communications Commission gave it and Sirius Satellite Radio Inc., the only other company licensed to market satellite radio, temporary authority to use ground-based repeaters.
Wireless-telephone companies, including AT&T; Wireless and BellSouth Corp., asked the FCC to force XM and Sirius to use less-powerful repeaters, which are intended to strengthen signals in urban areas, to reduce the potential that the equipment would interfere with their wireless networks that provide Internet access.

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