Satellite Radio
By Michael Sanford, Fri Dec 9th
A satellite radio or subscription radio (SR) is a digital radiothat receives signals broadcast by communications satellite,which covers a much wider geographical range than normal radiosignals. SR functions anywhere where there is line of sightbetween the antenna and the satellite, given there are no majorobstructions, such as tunnels or buildings. SR audiences canfollow a single channel regardless of location within a givenrange.
Because the technology requires access to a commercial satellitefor signal propagation, SR services are commercial businessentities (not private parties), which offer a package ofchannels as part of their service --requiring a subscriptionfrom end users to access its channels. Currently, the main SRproviders are WorldSpace (Intl.), XM Radio & Sirius (U.S.), aspart of their each being proprietary and non-compatible signals,requiring proprietary hardware for decoding and playback. Boththese and other services have news, weather, sports, and severalmusic channels.
We all have our favorite radio stations that we preset into ourcar radios, flipping between them as we drive to and from work,on errands and around town. But when you travel too far awayfrom the source station, the signal breaks up and fades intostatic. Most radio signals can only travel about 30 or 40 milesfrom their source. On long trips that find you passing throughdifferent cities, you might have to change radio stations everyhour or so as the signals fade in and out. And it's not much funscanning through static trying to find something -- anything --to listen to.
Now, imagine a radio station that can broadcast its signal frommore than 22,000 miles (35,000 km) away and then come through onyour car radio with complete clarity. You could drive fromTacoma, Washington, to Washington, D.C., without ever having tochange the radio station! Not only would you never hear staticinterfering with your favorite tunes, but the music would beinterrupted by few or no commercials. XM Satellite Radio andSirius Satellite Radio have both launched such a service.Satellite radio, also called digital radio, offersuninterrupted, near CD-quality music beamed to your radio fromspace. Car manufacturers have been installing satellite radioreceivers in some models for a few years now, and several modelsof portable satellite radio receivers are availabel from avariety of electronics companies. In this article, you'll learnwhat separates satellite radio from conventional radio and whatyou need to pick up satellite radio signals.
Satellite radio provider XM wants to put a satellite radioreceiver into a wide variety of electronics, including alarmclocks and DVD players, but the technology is not ready yet. Infact, the current goal of satellite
radio, a wearable device, isnot even practical, since the receiver will not pick up a signalif the person doesn't remain stationary. However, expertspredict that satellite radio reception will someday becomestandard in a wide variety of electronics.
Although XM Satellite Radio Holdings and Sirius Satellite Radioare posting higher-than-expected earnings and signing up recordnumbers of new subscribers, their expenses remain far higherthan revenues. Both companies reported spending more onmarketing in the fourth quarter of 2004 than they brought infrom subscriber fees.
XM Satellite Radio Holdings surprised investors withbetter-than-expected earnings this morning, and the sky seems tobe the limit for satellite radio. Revenue is growing,subscriptions are booming, the industry is attracting high-classtalent, and automobile manufacturers are putting satellite radioreceivers in millions of cars.
XM (nasdaq: XMSR - news - people) and Sirius Satellite Radio(nasdaq: SIRI - news - people) have boasted stellar growthnumbers, but their finances are soft and their revenues are faroutweighed by spending.
Meanwhile, competing technologies threaten to overtake thesatellite vendors the same way they've undercut traditionalbroadcasters. XM has a market capitalization of $6.5 billion, 26times what it booked in revenue for 2004.
"Based on where they are right now, the stocks might beconsidered ahead of themselves," says Barrington ResearchPresident James Goss. But traditional radio might not be thebenchmark to watch--a number of technologies are threatening toundercut satellite radio. "The terrestrial broadcasters, thesatellite radio companies, Apple and all the iPod clones,they're all competing for the same thing," says Goss. Apple hassold in excess of 10 million of the devices, and more than 7million MP3 players of all brands were sold in 2004 alone. Onceroads are covered by emerging wireless standards such as WiMax,which has a range of 30 miles, or by mesh networks (which useshort leaps from antenna to antenna to create an ad-hoc network,passing the connection from car to car), it'll be easy fordrivers to stream audio off the Web, play tunes off their homecomputer or even connect to other cars and listen to whateversongs are in their music libraries.
Samsung is in talks with XM Satellite Radio to develop a flashmemory player that comes with a kit that would allow satelliteradio access, and Cnet reports that the system would come with ahome or car dock that would allow recording of radio shows.
For more information on Satellite Radio please visit the Satellite Radio resource center.
About the author:None
