Satellite radio allows you to choose what to listen to

Wired on Friday: Americans spend a great deal of time in their cars, often with the radio turned on. Advertisers long ago realised this was a captive audience with the result, it seems, that all you hear are commercials as you scan the dial on your car radio.

Wouldn't it be nice to listen to your favourite music or chat shows commercial-free and with a lot less inane chatter from DJs? Some AM/FM radio stations in the US broadcast up to 25 minutes of commercials in one hour. That's a lot of advertisements to listen to, over and over, again.

Often the reception of these smaller stations extends only for 30 or 40 miles, so if you're travelling a long distance you have to find a new station to match your tastes.

Satellite radio is one of the newest technologies being looked at by car companies.

With a digital signal being beamed from satellites orbiting over the continental US, the same programme can be received crystal clear from coast to coast.

For a monthly subscription fee, the satellite radio providers offer a multitude of channels, many commercial-free, covering almost the entire spectrum of listener tastes.

At present, there are only two companies with licences in this field. The largest is XM Satellite Radio based in Washington DC, which promotes itself as going beyond AM and FM.

It has been offering a nationwide service since November 2001 and offers 70 music channels and 30 channels of news, talk, sports and entertainment for $9.99 a month.

This month, Avis Rent a Car has XM service available to car rental customers in 30 cities throughout the US. Avis is adding 7,000 XM-equipped General Motor vehicles to its fleet. All told, XM radio currently has a subscriber base of 500,000 customers.

Its competitor is Sirius Radio, which has been around for 11 years but has only been operating a nationwide service since last July. For $12.95 a month, it offers 60 commercial-free music channels and 40 sports, news and entertainment channels, of which some have commercials.

Beginning next year, Sirius will be installed on 10 Ford, Lincoln and Mercury vehicle models and most 2004 Mercedes-Benz vehicles. To date, Sirius has 100,000 subscribers.

Both Sirius and XM are seeing their subscriber base grow.

Sirius also offers original programming from a national digital broadcast studio it built in New York's Rockefeller Center whereas XM buys in a lot of programming and has commercials on about half its channels.

Having a competitor is "not a concern to us", said Mr Jim Collins, a spokesman for Sirius. "It's not like a race.

"We believe the market is large enough for the two of us. All we need to break even is two million subscribers, whereas XM needs about five million."

And the potential market is certainly huge. According to Mr Collins, there are about 200 million cars on the road in the United States.

About 16 million trucks, four million heavy trucks and three million recreational vehicles are sold every year and many of these will soon come out with satellite radio installed as an option.

There is also a retail market from consumers interested in buying satellite radio at audio outlets such as Circuit City and Best Buy. Some stores will replace a current in-dash radio with a satellite radio and hook it up with an antenna and tuner.

The satellite radio tuner mounts in the boot of the vehicle, capturing digital satellite radio signals and sends those signals to the receiver in the vehicle.

The receiver is the hands-on controller for selecting digital national music, news, talk or sports that is enabled by the tuner.

Another option is to buy an FM modulator (with a compatible tuner, antenna and subscription), which will add superior sound to an existing car radio system. Models range in price from $100 to $1,500.

Car dealers are another important source of radio sales and Sirius has built an alliance with the Asbury Automotive Group, which has 93 dealer locations across the country.

A senior executive at one of the largest automotive groups has a demo unit in his car as he considers a deal with one of the groups.

During his morning commute, he likes to listen to commercial radio stations for the traffic reports but on his return home he prefers to listen to his choice of commercial-free music from the satellite radio stations.

"I believe consumers will be willing to pay for this," he said. "Particularly the younger generation, who are the future car buyers, because they will have a better grasp of technology."

So far, the vast majority of listeners are car owners but Mr Collins sees potential for the product from boat owners and homeowners, with new transportable units that can be taken from the car into the home or the boat and installed in separate docking kits.

In fact, Sirius introduced a product called the Kenwood Here2Anywhere plug and play model this month.

"I would love this in the home because I wouldn't have to buy CDs," Mr Collins said.

"We have a record library that you could never reproduce yourself. I believe these will be popular because they offer flexibility from one subscription service and are easy to install."

Newer in-home models will come on the market in the autumn and these will offer features such as the ability to store 10 songs in an audio box and a service to monitor music channels and alert someone if his favourite song pops up.

The features that people seem to like are the lack of commercials, the variety in music categories and quality news programming from broadcasters such as CNN, BBC World Service and National Public Radio.

At the moment, the two companies use satellites that are only configured for North America. "If we do something in Europe or Asia, we will need additional satellites," Mr Collins said.

Sirius employs 300 and Mr Collins said the advantage of new broadcasting technology meant "we don't need a large number of employees to operate this kind of service".