- The Washington Times - Monday, October 11, 2004

NEW YORK - Shock jock Howard Stern’s move to Sirius Satellite Radio Inc. begins an association between a man who was happy to describe, in detail, starlet Paris Hilton’s sex tape, and the industrial giants of the auto industry.

Shocked? Don’t be. After all, every car show has its company-sponsored cleavage.

The audience for satellite radio is “the car-buying male public,” said Scott Greenstein, president of entertainment and sports for Sirius radio.

Sirius and its larger competitor, XM Satellite Radio Inc., based in Washington, know they need men to embrace them if their business plans are to work, and the auto industry is more than happy to help.

Even though Sirius has lost more than $1 billion in the past five years and XM has lost $1.5 billion since 1992, they have attracted investments from most of the large automakers.

DaimlerChrysler AG has invested $100 million in Sirius. Honda Motor Co. has put about $50 million into XM, while General Motors Corp. has invested $120 million and given XM a $250 million line of credit.

And that’s not all. There are other incentives: GM and Honda pay for the first three months of XM subscriptions in some model cars, said Chance Patterson, an XM spokesman.

The Acura TL, Cadillac Escalade and Chevrolet Cobalt advertise XM-radio availability. “You go to a dealership and XM has a visible presence there,” Mr. Patterson said. “Most dealers have an XM kiosk with a radio and a lineup.”

“How important is the car industry? Critical,” he said. “Half of our subscribers come from the new-car market.”

Men are “the group most likely to be buying cars,” said Sirius spokesman Jim Collins. “This is the group listening to all the sports programming, the group likely to spend a lot of time in their automobiles. That’s why the Stern agreement is so important and a watershed for us. It mirrors our target audience.”

Mr. Stern, who said on Wednesday that he would move to Sirius in 2005 as part of a $500 million deal, is such a natural fit for satellite radio that XM executives said they had negotiated with him, too. Apparently, they decided his price was too high.

XM, the dominant player in satellite radio with 2.5 million subscribers to Sirius’ 600,000, started a show Oct. 4 by equally salacious shock jocks Opie and Anthony.

Satellite radio doesn’t lease the public airwaves, as traditional radio does, so it isn’t subject to the decency scrutiny and hefty fines from the Federal Communications Commission that the shock jocks face on traditional radio.

XM charges listeners extra to hear the Playboy Channel, whose programs include “Judge Julie’s unique brand of justice on ‘Sex Court.’”

Sirius hasn’t been shy, either.

In an ad that the Advertising Women of New York voted “most sexist ad of the year,” Sirius showed buxom “Baywatch” sex symbol Pamela Anderson washing a car by sliding across it in shorts and a wet tank top and buffing the chrome with her bottom.

Auto makers are betting that satellite radio’s mix of content and marketing will persuade customers to buy dedicated satellite radios, which usually cost $100 or more, and pay $9.95 to $12.95 a month to listen to them. There are stereo models for the home, wireless kits that can adapt a traditional radio to satellite, and portable radios that can move from a car to a boombox mount.

Still, the 1 million GM cars sold with XM radios since the company started installing them three years ago are a fraction of the 17 million vehicles sold in the United States last year. XM predicts that GM and Honda will make 1.5 million cars this year equipped with XM radios.

Sirius, which entered the car market later than XM, is far behind. Only 112,000 cars had Sirius radios at the end of June.

Sales of satellite radios were heavily skewed toward male techno-whizzes and audiophiles when the radios first rolled out, said Scott Tappan, the sales and marketing manager for XM Satellite Radio and GM subsidiary OnStar Corp. Now, “It’s still generally male, but we are seeing a whole lot more females.”

To give listeners a chance to test-drive the radios, Sirius has an agreement with the Hertz Corp. and XM has a deal with Avis Rent a Car System, Inc. Avis has seen an increase in demand for its premium and luxury cars since XM radios became standard equipment in those categories, said Susan McGowan, an Avis spokeswoman.

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