Since their debut a half-decade ago, satellite radio stations have had one main rival: traditional radio. And it’s not hard to see why winning subscribers has been easing pickings. Satellite radio offers ad-free music channels and boasts myriad specialized offerings, compared with a few dozen for traditional AM/FM stations. XM Satellite Radio (XMSR) and Sirius (SIRI) had signed up 9.3 million paying users by the end of 2005, compared with fewer than 4.5 million a year earlier.
Competition between XM and Sirius has been furious from the start and has only intensified of late — most recently with the Jan. 9 debut of a channel for shock jock Howard Stern on Sirius (see BW 12/28/05, "Satellite Radio: Now It’s a Race"). But now, the battle for subscribers is about to get cranked up another notch. Traditional radio companies are making a major push into so-called high-definition radio, a new technology that will let them better compete for listeners with a greater range of channels and higher sound quality.
What’s more, wireless broadcasting networks as well as services that let you listen to radio on your PC or download radio wirelessly are rushing into the market, offering consumers a slew of new listening options. The big wild card: Apple Computer (AAPL), maker of the wildly popular iPod digital music player, might enter the fray, with results that may not favor the satellite companies.
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