A satellite radio or subscription radio (SR) is a digital radio that receives signals broadcast by communications satellite, which covers a much wider geographical range than normal radio signals.
SR functions anywhere where there is line of sight between the antenna and the satellite, given there are no major obstructions, such as tunnels or buildings. SR audiences can follow a single channel regardless of location within a given range.
Because the technology requires access to a commercial satellite for signal propagation, SR services are commercial business entities (not private parties), which offer a package of channels as part of their service —requiring a subscription from end users to access its channels. Currently, the main SR providers are WorldSpace (Intl.), XM Radio & Sirius (U.S.), as part of their each being proprietary and non-compatible signals, requiring proprietary hardware for decoding and playback. Both these and other services have news, weather, sports, and several music channels.
We all have our favorite radio stations that we preset into our car radios, flipping between them as we drive to and from work, on errands and around town. But when you travel too far away from the source station, the signal breaks up and fades into static. Most radio signals can only travel about 30 or 40 miles from their source. On long trips that find you passing through different cities, you might have to change radio stations every hour or so as the signals fade in and out. And it’s not much fun scanning through static trying to find something — anything — to listen to.
Now, imagine a radio station that can broadcast its signal from more than 22,000 miles (35,000 km) away and then come through on your car radio with complete clarity. You could drive from Tacoma, Washington, to Washington, D.C., without ever having to change the radio station! Not only would you never hear static interfering with your favorite tunes, but the music would be interrupted by few or no commercials.
XM Satellite Radio and Sirius Satellite Radio have both launched such a service. Satellite radio, also called digital radio, offers uninterrupted, near CD-quality music beamed to your radio from space.
Car manufacturers have been installing satellite radio receivers in some models for a few years now, and several models of portable satellite radio receivers are availabel from a variety of electronics companies. In this article, you’ll learn what separates satellite radio from conventional radio and what you need to pick up satellite radio signals.
Satellite radio provider XM wants to put a satellite radio receiver into a wide variety of electronics, including alarm clocks and DVD players, but the technology is not ready yet. In fact, the current goal of satellite radio, a wearable device, is not even practical, since the receiver will not pick up a signal if the person doesn’t remain stationary. However, experts predict that satellite radio reception will someday become standard in a wide variety of electronics.
Although XM Satellite Radio Holdings and Sirius Satellite Radio are posting higher-than-expected earnings and signing up record numbers of new subscribers, their expenses remain far higher than revenues. Both companies reported spending more on marketing in the fourth quarter of 2004 than they brought in from subscriber fees.
XM Satellite Radio Holdings surprised investors with better-than-expected earnings this morning, and the sky seems to be the limit for satellite radio.
Revenue is growing, subscriptions are booming, the industry is attracting high-class talent, and automobile manufacturers are putting satellite radio receivers in millions of cars.
XM (nasdaq: XMSR – news – people) and Sirius Satellite Radio (nasdaq: SIRI – news – people) have boasted stellar growth numbers, but their finances are soft and their revenues are far outweighed by spending.
Meanwhile, competing technologies threaten to overtake the satellite vendors the same way they’ve undercut traditional broadcasters.
XM has a market capitalization of $6.5 billion, 26 times what it booked in revenue for 2004.
“Based on where they are right now, the stocks might be considered ahead of themselves,” says Barrington Research President James Goss.
But traditional radio might not be the benchmark to watch–a number of technologies are threatening to undercut satellite radio.
“The terrestrial broadcasters, the satellite radio companies, Apple and all the iPod clones, they’re all competing for the same thing,” says Goss.
Apple has sold in excess of 10 million of the devices, and more than 7 million MP3 players of all brands were sold in 2004 alone.
Once roads are covered by emerging wireless standards such as WiMax, which has a range of 30 miles, or by mesh networks (which use short leaps from antenna to antenna to create an ad-hoc network, passing the connection from car to car), it’ll be easy for drivers to stream audio off the Web, play tunes off their home computer or even connect to other cars and listen to whatever songs are in their music libraries.
Samsung is in talks with XM Satellite Radio to develop a flash memory player that comes with a kit that would allow satellite radio access, and Cnet reports that the system would come with a home or car dock that would allow recording of radio shows.