Satellite Radio: Tune In or Turn Off?

Steve MacLaughlin writes: "After nearly a decade of buildup and anticipation satellite radio has finally hit the airwaves. By now you've probably seen a commercial or read an article about the digital satellite radio service. But what is behind all the hype? And does satellite radio have a viable future? To answer those questions Saltire decided to take an in-depth look at the new service's inner-workings, its potential, and its possible future." Read on for more of Steve's look at the current options and future possibilities for satellite radio service.

Satellite radio has been a technology in the making for many years now. In 1992, the Federal Communications Commission (FCC) assigned part of the S-band (2.3 GHz) spectrum for nationwide broadcasting of a satellite-based Digital Audio Radio Service (DARS). In 1997, the FCC granted American Mobile Radio (now XM Satellite Radio) and CD Radio (now Sirius Satellite Radio) broadcast rights over that band. After several years of tinkering, courting investors and partners, and lining up their content these two companies are poised to finally make satellite radio a reality.

The Players
XM Satellite Radio (NASDQ: XMSR) and Sirius Satellite Radio (NASDQ: SIRI) paid an estimated $80 million each for their exclusive distribution rights to satellite radio. With numerous industry partners and investors these two companies are hoping to become the next giants of the media world.

Washington, D.C. based XM Radio launched nationwide service on November 12, 2001, after two months of regional service. XM Radio currently offers 100 channels (71 music and 29 news, sports, talk, and children's programming). XM Radio has exclusive content relationships with C/NET, NASCAR, and others. XM Radio's most notable auto industry partner is General Motors. Cadillac now offers XM Radio standard on all new 2002 Sevilles and Devilles. XM Radio's service is available for a monthly subscription fee of $9.99.

New York City based Sirius Radio plans to launch their service in Denver, Houston, and Phoenix on February 14, 2002. A Sirius Radio spokesperson told Saltire that their service will be available nationwide by the third-quarter of 2002. Sirius Radio also offers 100 channels (60 commercial-free music and 40 news, sports, talk, and entertainment programming). Sirius Radio has exclusive content relationships with NPR, Hispanic Radio Network, and National Lampoon. Sirius Radio also has exclusive partnerships with DaimlerChrysler, Ford, and BMW. Sirius Radio's service is available for a monthly subscription fee of $12.95.

Although XM Radio and Sirius Radio have their distinct differences there are however some things that that they both share in common. Both services offer similar music channel genres. The big difference being that all of Sirius Radio's music channels are commercial-free as opposed to only about 30 such channels on XM Radio. Both services also share several news and entertainment providers like Bloomberg, CNBC, CNN, ESPN, and the Weather Channel.

XM Radio and Sirius Radio have also partnered with many of the same manufacturing partners including Alpine, Clarion, Delphi Delco, Panasonic, Pioneer, Sony, and Visteon. One very exciting product is Sony's "Plug and Play" DRN-XM01 model that works in both your car and home stereo system through the use of a $150 adapter kit. The two companies have also teamed up with similar retailers to help distribute satellite radio receivers, antennas, and other devices. These retailers include Best Buy, Circuit City, Crutchfield, Good Guys, and Tweeter.

Just The Facts
According to the Radio Advertising Bureau, 75% of all Americans age 12 and up listen to radio daily, and 95% listen every week. But their choices are almost always very limited. Consider the fact that more than 22 million listeners receive fewer than five FM stations, and the communications industry firm Veronis, Suhler & Associates noted that 50% of all existing radio stations only use one of three programming formats (Adult Contemporary, Country, and News/Talk/Sports).

In many cases, huge segments of the music industry get little or no coverage by mainstream radio. One study indicated that up to 21% of annual music sales come from these totally ignored formats. This is especially true of ethnic music formats like African, Asian, Caribbean, or Hispanic. Combine this with the fact that more than 105 million listeners live outside the 50 largest radio markets and you quickly realize satellite radio's potential appeal.

Too Much Information
XM Radio uses two Boeing HS-702 satellites that are positioned over the East and West Coasts of the United States. The satellites, aptly named "Rock" and "Roll", maintain a geostationary orbit at 22,000 miles above the earth. XM Radio has a third back-up satellite on the ground should something go wrong in orbit.

Sirius Radio uses three Space Systems/Loral 1300 satellites in a high altitude elliptical orbit. Sirius Radio contends that this ensures that each satellite will spend about 16 hours a day over the U.S., and that at least one satellite is over the country at all times. Sirius Radio also has a back-up satellite standing by just in case of problems.

Both companies transmit their signal on the S-band, at 12.5 MHz to radio receivers on the ground. Sirius Radio will use the in the 2320.0 to 2332.5 MHz frequency band. XM Radio already uses the 2332.5 to 2345.0 MHz frequency band. They will also use repeaters in urban areas where buildings and other obstructions may interfere with signal reception.

One On One
Saltire interviewed Chance Patterson, XM Radio's Vice President of Corporate Affairs, to get his take on satellite radio.

• Saltire - What are some of the key differences between XM Radio and Sirius Radio?
  CP - The biggest difference is that we have a fully developed and deployed system. We have a proven product that's great, and we developed the system with a retail focus, not just limited to the car. But we're not just an audio service. We've recruited the best people in the industry. These people really make our content come alive.

  Saltire - What will it take for XM Radio to succeed financially?
  CP - We figure that we need 4.5 million subscribers to be profitable. There are more than 200 million registered vehicles in the United States. So we need less than 2.5% of all cars to reach that figure. And this doesn't take into account people who only use it in the home. We think the demand is definitely there.

  Saltire - How important is the auto industry to XM Radio's success?
  CP - They are a part of it for sure. We have a full OEM (Original Equipment Manufacturer) system. We have partnered with GM, and they are also an investor. Right now Cadillac models already have the system. Over the next year more than 20 GM models will have factory-installed units.

  Saltire - What does satellite radio mean for listeners?
  CP - People are spending more time in their cars and they want to be informed, and they want to enjoy that time a little more. XM can do that. If you're listening to the reggae channel you should feel like you're in Jamaica. It's really point-of-view radio.

  Saltire - What does satellite radio mean for traditional radio?
  CP - XM doesn't disenfranchise AM/FM. Terrestrial radio will be forced to get better. Talk to the audience like they're older than 12 year olds. Talk to me about the music. Talk to me about the world when [the song] was written. That's what listeners really want.

  Saltire - But will people really pay for satellite radio?
  CP - People said they'd never pay for cable television because TV was something they already got for free. Look at how that turned out. We're going to do the same thing for radio. The difference is that we already have all of the infrastructure. The one-millionth subscriber doesn't cost more than the first one. We'll offer better quality, less commercials, and more choice. We believe people will pay for their passions.

Word On The Street
Saltire solicited the unfettered opinions of individuals in the technology, radio, and automotive industry.

• What do you think satellite radio means for advertisers?
  "I think it can potentially be very good for advertisers. Specifically, by dividing the content available into so many categories, advertisers can probably make better assumptions about demographics. For example, XM Radio offers a dedicated NASCAR channel, dedicated BlueGrass channel, etc. The targeting is more granular than conventional radio where most stations do a little of everything, music, news, weather, traffic, etc. This should translate to more effective advertising potential for advertisers. That said, some of us are and will be willing to pay for commercial free options - I sure am." - Jason Foodman, technologist and Vice President of Business Development, Aladdin Systems

  Why do you think satellite radio has the potential to be a big success?
  "Abetted by the Telecommunications Act of 1996 that relaxed ownership restrictions and made possible the creation of media behemoths, conventional radio programmers unwittingly sabotaged their own stations through pernicious cost-saving programming trends such as corporate-level programming, format duplication and computer automation. The result: bland, boring, sound-alike radio stations from town to town, up and down the dial all across America, which drive away listeners in droves. That's good for satellite radio services like XM and, soon, Sirius, since listeners may eventually find their way to satellite radio." - Michael Saffran, radio industry veteran and Senior News Specialist, Rochester Institute of Technology

  What does the auto industry really think about satellite radio?
  "Everybody in the automotive/telematics value chain is excited about it. Well, maybe not everybody, but I've just been doing some interviews on a satellite based telematics project, and everybody I've talked to at OEMs, Tier 1 suppliers, cellular carriers, really likes the idea of satellite radio. I get the feeling they want this to work, if only because it lets them get a foot in the car door with subscription-based services." - Thomas R. Elliott, Vice President of North American Consulting, Strategy Analytics, Inc.

The Bottom Line
Both XM Radio and Sirius Radio agree that the market is big enough for two players. But as both services ramp up they need to find a way to stay in business. XM Radio recently reported a third-quarter '01 net loss of $70.8 million. Sirius Radio reported a net loss of $57 million for the same time period. XM Radio just announced financing to operate its business into the fourth-quarter of 2002. Sirius Radio has also publicly announced that they have enough cash to last until the fourth-quarter of 2002.

To succeed both companies will need the support of the auto industry, and quickly. Getting satellite radios installed as standard equipment will help to build their subscriber base. The current $300 to $400 conversion cost might be a bit too steep for most consumers. Also, current receivers only support a single format (XM or Sirius). Future AM/FM/XM/SR models should also help boost more widespread usage.

Finally, there is enough content overlap to keep subscribers to either service happy. Perhaps the biggest decision is whether or not you want ads with your music. Sirius Radio's commercial-free music service can be yours for just $3 more each month than what XM Radio charges. The immense variety of music and other content should be a big hit if consumers can just find an easy way to get their hands on the technology. And reports of its CD-quality audio can only help to increase satellite radio's popularity. I'm still waiting to hear it for myself. Stay tuned.

Comments

Who cares?

[vought]

With in-car MP3, XM and Sirius are headed for the same landfill that Iridium and Ricochet are in, namely, great technology that solves no problems.

What a waste!

Now if someone could just get my trash bin to the street on Wednesday mornings without my involvement...that would be weinning technology.

Re:Who cares?

[amccall]

Truck Drivers, Audiophiles, "Gadget People", people who like to drive cross country(or need to).

I spend roughly 1 and a half hours in the car each day. Listening to a single set of mp3s, even a large one, can get tedious.

Then there is talk radio, which I imagine is going to be a large application of this thing. 24 hour Rush Limbaugh Marathons(...what joy...), still I imagined listened too. More selection, less trouble dealing with media/mp3's. Station not playing what you like, pick another. Then there is news, traffic reports(I don't know about localization, but I imagine it's possible), weather, and such - which just can't be taken with you.

Anyway, just because you don't see applications, doesn't mean that noone is going to buy it. Remember, people still listen to radio, not just CD's.

Re:Who cares?

[tomzyk]

Now if someone could just get my trash bin to the street on Wednesday mornings without my involvement...that would be weinning technology.

That's already offered: Maid Service. Subscription based. And not only will it get your trash can out to the street, it'll pick the trash that isn't even IN your trash can and get it to the street!

Re:Who cares?

[RussGarrett]

When you can instantly access any song ever recorded, why would you still pay to subscribe to a service that only gives 100 streams where someone else is picking the songs?

Of course. The thing is, you may have access to every song ever recorded, but you don't know which ones you like, which you enjoy, and which aren't worth your bandwidth. That's what radio is for. MP3 won't supercede radio, because they're completely different media.

Re:Who cares?

[FatRatBastard]

So people in Britain did, indeed, pay for radio directly rather than indirectly through higher priced groceries, etc.

And the people in Britian have never been very happy paying either. It was a tax, you had to pay it (or prove you didn't own a radio, or TV now).

Now, I won't go into an arguement about the quality of Auntie Beeb's programming (I think its top notch, sans maybe the Archers) and if they cut the free web broadcasts would probably pay for thier service, but that's a different story.

People in Britain pay for broadcasts (be it radio or TV) because they have to by law (call it what you want, it is essentially a tax).

Re:Who cares?

[mentin]

With in-car MP3 XM and Sirius are ... great technology that solves no problems

There are people (like me) who like to listen to something that they did not know before, like new artist that I never heard of (so it is not in my MP3 collection), or an interesting opinion on NPR, so on. MP3 is just static set of data, you will never get anything new there. MP3 will never completely replace radio, it will only replace your CD-player.

Coverage

[mini me]

In many cases, huge segments of the music industry get little or no coverage by mainstream radio.

Lucky them!

Seriously, if this technology is just an overglorified radio, what is the benifit? If they provide radio stations with content the people want to hear (like non-mainstream music in all genres) then you might have a winner.

Of course if this frequency is ideal for wireless satellite broadband internet access then get the radio off it immediately! You can stream the radio over the net if you have to.

Re:Coverage

[Jus'n]

If they provide radio stations with content the people want to hear (like non-mainstream music in all genres) then you might have a winner.

Hate to be the one to tell you this, but by definition, "mainstream" music IS what people want to hear. You're suffering from the all-too-common human curse of thinking everyone in the world is like you and your own local peer group.

You want to know what the benefit is? Let me give you an example:

Do you get cable/satellite TV? Have you ever gone for any length of time without it? I didn't get cable until I was about 10 years old. I was perfectly content before that, watching local saturday morning cartoons, watching local network sitcoms like Who's the Boss, etc. Then around 10 or 11, I got cable, and discovered the joys of USA's Cartoon Express (and now, we have a whole Cartoon Network!), and found a whole world of other programming on those 40 or so channels (at the time). Not to mention all those wonderful movies on the premium channels we got for free as a sign-up bonus (back when I was 11 or so, I was more easily amused. Or maybe Showtime sucks now. At least Skinemax is still living up to its name...). I got to watch TV shows that actually stimulate, rather than sedate, the mind! Then, after a couple years, my family decided that they didn't really watch all those channels, and we could save a little chunk of change by ditching cable, so we did. We went back to watching drivel like Who's the Boss, and OMFG it sucked! It lasted about 6 months before my parents broke and got cable again. What's the moral to this story, you may ask? Local programming, like broadcast TV and radio, is necessarily limited. Niche markets, on a local scale, are not generally worth catering to. Sure, local programming is interesting for curiosity's sake when it's not your own local area, or for keeping grounded in your local world, which is all fine and good, but it certainly does NOT bring you the best the media has to offer. Generally, they cater to the lowest common denominator, and odds are, in your area, that's pretty damn low (at least compared to the average Slashdot-Intellectual).

Is cable perfect? Of course not. It's necessarily limited in bandwidth, and therefore you DO get some of that lowest-common-denominator effect (HOW many f***ing times a day is that Emeril loser on Food TV? ok, bad example, since he owns a bunch of it, but still. And how many Turner networks do I really need? Especially since Discovery took all their good shows on put them on specialty networks, like Discovery Wings, Discovery Science, and Discovery Health, leaving bassically NOTHING good on Plain Ol' Discovery Channel, the only one I get). Sorry for the rant. At any rate, sure, cable's not perfect (leaving the door open for DBS and digital cable), but ye gods! have you seen broadcast TV lately? One or two good shows a week, and everything else melts your brain!

Now imagine how that could apply to radio. I live in the DC metro area. We have a lot of radio. I think we have something like 20 FM stations. I don't like a single damn one of them. I think the two modern rock stations sync their (bad) playlists just to piss me off. The 3 "Mix" stations play an interesting "mix" of decent music and crap... heavy on the crap. Country stations are right out, as are the hip-hop/R&B/whatever you want to call 'em stations. Occasionally I get a jonesin' for some classical, some nice Beethoven or Wagner, but our classical stations just play lilting little fairy-dust stuff whenever I turn them on. Jazz is totally hit-or-miss when I hit the public/college stations (maybe one good song a month, due mostly to the fact that they only play jazz maybe 2 hrs a day, and only when I'm not listening to the radio). One thing I can count on is the morning shows. WHFS's morning show will, at least once every single weekday morning, talk about Fred Durst. And that's only in the 45 minutes or so I listen, out of, what, 4 hours they're on? The Mix stations have ok morning shows, and that's really the only thing I listen to the radio for anymore. Much like broadcast TV... local news is really all it seems to be good for anymore. All the good shows on local broadcast channels are made by the NETWORKS which probably only broadcast ANYTHING because not everyone has cable/DBS yet.

Why listen to someone else's playlists at all? Well, I have about 45 hours' worth of MP3s here at work, and maybe another 100 hours on CD at home that I haven't ripped yet, and I get SICK of my music. I'll go a month or so just loving the crap out of my mixes (MD player for the morning commute) and then go a month without listening to a single thing I already own. That month is painful, because I'm reduced to listening to that locally broadcast shite.

I welcome satellite radio (and I get especially creamy at the thought of what will replace it!).

-j

It's not the music that will sell this.

[markx16]

I see the greatest appeal in satellite radio in talk radio/news/sports, live content that you wouldn't be able to get(or at least reliably or from a consistent source) if you're on the road.
Plus, like with satellite TV, it could help you get shows from other parts of the country you'd otherwise be unable to get.

Plus, not everyone has the time or inclination to upload their music collections to mp3.

Its the content, stupid....

[KoshClassic]

The bottom line with the success of these services will be a) Is the content actually good, where they'll play a song even if it isn't on a major label or performed by Brittney Spears, or am I going to have to listen to the same 75 songs programmed by mindless corporate drones over and over like I have to do on FM today? b) If they actually get part 'a' right, will they last long enough financially for word of mouth to help them achieve critical mass?

On a technical note, does anyone know the capacity of these systems in terms of the number of seperate channels they can offer?

Re:Less interesting that it used to be

[FatRatBastard]

There are only a few things that I would actually pay to hear on the radio:

News/Sport? There's almost always a news station somewhere on the AM or FM dial. No need to pay there.

Music? I rarely listen to any music station. I have enough MiniDiscs in the car to keep me happy (just like the previously mentioned MP3 players).

Sporting Events? If I'm going to subscribe to sporting events outside of my local coverage I'd rather spend my money on a Satalite TV subscription. How many games am I going to want to listen to in my car? Plus, most of the stuff I listen to I can get free over the web (Ipswich Town FC) or if needs be can pay $30 to Real/MLB for a season pass to any baseball game.

For me, that leaves unique/niche shows. If I lived somewhere where Stern wasn't syndicated I'd think about dropping some cash to listen to him. Thankfully I live in DC, so I get that for free as well.

As someone has already pointed out, its a nice idea, but I think the satalite radio companies have overestmated the demand out there for thier service. They'll have to come up with something above and beyond simply reproducing the radio experience over satelite to get lots of people to fork over $$$.

Just my $0.02

Reason to care: Your music is lame

[Mdog]

Seriously, the point of the radio is to get exposed to new music. Call me a teenie-bopper, but I have discovered shit that I like by listening to the radio.

Outside of populated areas, you mean

[Spamalamadingdong]

ask anyone who has driven across Montana, Wyoming, and one or both of the Dakotas: There are literally miles and miles where you cannot get any radio at all.

Those are also areas where people are also spread very thinly. You're not going to pay for your satellite network with 15% of those people; you're going to need 3% of the suburban drivers. U-Hauls are the same, people don't use them often enough to make it worth putting a sat radio in it. Those things usually don't even have cassette decks, let alone CD players. (Yes, I have way too much experience with rental trucks.)

Long-haul truckers are probably a solid market, but I don't know how many of them there are or if they'd make a big difference in the bottom line.

Target audience?

[mr.buddylee]

Who is the supposed to appeal to? I personally wouldn't use it with a 10 minute commute, even with a 30 minute commute, I can't justify $10/month for the radio.

Also, do you think this will appeal to the soccer moms of america? or the older population? Too technical maybe or just not worth it?

He said "are more than 200 million registered vehicles in the United States" but to reach their number they still need 4.5 million of those? Are there 4.5 million people ready to chuck out $10/month with the uncertainty of the economy?

I hope they do well, but I personally think they're about a year too late. A year ago, everyone wanted a new gadget, now, I don't think thats the case...

good idea, poor delivery

[avdp]

Why I will not be listening to satellite radio anytime soon:

- It's a subscription model, and yet I have to buy the equipment which is not cheap (other than the one car manufacturer that includes it).

- It's a subscription model, yet there are commercials (on at least some channels)

- I have to dish out money for equipment and yet there is a good chance it will only work for less than a year. One company admitted that they have money to stay afloat until the end of next year. Which means, there is a good chance they will no longer exist a year from now since I think they're expectations on signing up 4.5 million subscribers is a bit optimistic.

Yikes. No thanks. You won't get me to take the gamble, at least not until they have been around for a couple years. Of course, if everybody thinks like me, they won't be around for a couple of years.

What about us sports junkies?

[e2d2]

What about me? The sports junkie? I could listen to sports events/talk the entire time I'm in the car. My commute lasts about an hour each way so I love listening to the sports channels. The only problem is there's only one FM sports talk show on and they dont have live coverage. I need to switch to AM for that. All though many on /. would like to think that the world is filled with others like them, the fact is everyone on here is most likely the minority. Some, myself included, would spend $10 /month getting live coverage of sports/news events.

Local advertising?

[cr@ckwhore]

What does this mean for local advertising that dominates traditional FM radio? Lets say "Larry's Local Lobster Shack" advertises on the radio and generates a lot of business. There really isn't anything attractive about satellite radio advertising for local business owners to get excited about. Plus, its probably a lot more expensive to match the likes of the larger national companies.

I'm sure FM radio isn't going anyway, but will FM become to XM what AM is to FM?

As long as....

[x0]

Clear Channel Communications has nothing to do with any of the programming choices.

In the last three years I have moved from North Carolina to Texas, California, and finally Minnesota.

CCC has done more to ruin Classic Rock stations (shock jocks, et al...), that I would consider $10/mo cheap if the playlists are good.

Re:I will NOT pay for XM.

[RocketScientist]

Umm...huh.

Some of the stations do have commercials. The comedy stations, probably due to more expensive content. The CNN/WeatherChannel/ESPN Radio talk channels, probably due to the fact that they're just getting feeds from other commercial services. However, I'd rather listen to ESPN Radio, commercials and all, than listen to something that doesn't have the coverage and commentary that ESPN does. I doubt that either XM or Sirius would be able to put together a high-quality sports show, for example. The XM Radio news stuff is mostly just read off-the-wire, so it's not so great either. I just wish they had more NPR-ish news.

The music channels are generally commercial free. Some have commercials (on the order of a minute or two an hour maybe). Many do not (the decade stations are, I believe, commercial free). Some content with advertising, some without. I remember hearing that their alternative-ish station was doing an hourlong commercial-free concert last night.

There's a mix of both. If you have the service, and you don't want the commercials, you can either avoid the stations with commercials or (gasp) change stations. There's a hundred of them, chances are you'll find at least 5 or 10 that are acceptable to your tastes.

Monopoly is not a free press or competition

[isdnip]

Sure, the technology's cool. But the way Uncle (Frank Charlie) Charlie licensed it is indicative of everything that's wrong with modern American media.

With broadcast radio, in urban areas at least, there used to be a lot of broadcasters. Now they're allowed to consolidate so Clear Channel and Viacom own most of the stations. College radio and a handful of local holdouts are what remains of diversity.

With satellite radio, they cut right to the chase. Two licenses, nationwide, high capital corporate players. No other diversity. Sure, those players can select their providers from a diverse supply, if they so choose. But only if the dollars say so. No equivalent of Cable Leased Access, which theoretically allows anybody to buy a slot on a cable network, or for that matter cable's Public Access. Just 100 channels of what your Providers wants. Big Brother Knows Best. In the olden days, if there were a "natural monopoly" of this sort (if, for techical reasons, there could only be one or two providers, each with many channels, which seems to be the case here), then there might be the common carrier obligation or more open third-party-programming rules. But that's not what the content monopolists want.

Worse, the two systems are not interoperable. So you can't even pick one. You get either Sirius or XM, depending on which car (or aftermarket radio) you buy. So the duopoly is really a monopoly so far as listeners are concerned -- at least with broadcast radio, you get your choice of Viacom or Clear Channel pablum. And that interesting stuff down at the low end of the dial.

This is the DMCA's companion, a broadcast model from hell.

I disagree

[pyite69]

If the channels are good enough, I will gladly add this in
addition to my mp3 player.

The key, obviously, is programming. I have been radio-free
for years and sometimes I just wish someone would choose
good music for me... but every time I listen to the radio I
realize how unlikely it is because you are not the customer;
you are the product.

With these guys, you are the customer, so I think they are
more likely to come up with good programming.

Re:These are easy to hack

[ShavenYak]

In retrospect, XM should have really considered a smartcard system like that of DirecTV.

Yep, and that also could have solved the problem of the poster above (the "$30 a month" topic). With a smartcard, you could have one subscription per person, perhaps an additional fee for additional cards. Then, you could keep your card with you when you swapped cars with the wife. Or when you went to a rental car.

They also could have had a system for storing "favorite channels" on the card and such.

Re:You are the exception

[Black Perl]

Cable TV generates new unique content. Radio just plays music that is available elsewhere.

Yes, but:

• I like to hear new music that I haven't been exposed to before.
• NONE of the 4-5 genres of music I like to listen to is broadcast on the radio where I live.

This is reason enough for me to get it, particularly with the receiver that can move from car to home. I'm sure there are many others in the same situation.

If there were more independent radio stations and less corporate crap, this wouldn't be necessary.

One questions

[iceT]

What happens when I go under an overpass in my car? Last time I checked, satellite communications were line of site... Is my radio going dropp out ever 1/2 mile as a go up 'sunken' highways with overpasses ever 1/2 mile?

Excellent Point!

[cryptochrome]

Excellent Point! You put it quite clearly, although you wrote too much. However, your argument does fail for channels that don't do advertising, i.e. HBO and the sirius network. And you also didn't mention that satellite broadcasting is far more efficient than cable or broadcast for every type of content except local news and entertainment.

So let me propose a hybrid approach - satellites distribute advertising supported channels for free (users pay only the cost for recievers, which could be subsidized, and they do need to improve their reliability). Using the existing subscription-verification methods they have in place, they charge extra for the premium channels. Local broadcasters and cable companies either go out of business, change their business model, or operate with the satellite providers for local content (news, entertainment, and particularly advertising inserted into the other channels), broadband internet (particularly upstream, since satellite can handle downstream), and on-demand TV (especially via PVRs). It's that simple.