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Sunday, August 19, 2001

By Adrian McCoy, Post-Gazette Staff Writer

What bugs you most about radio? A) Too many commercials. B) Not enough different formats. C) Not enough variety in most playlists. D) Sound or reception quality.

If you picked any or all of the above, stay tuned for satellite radio.

It was 20 years ago that MTV played "Video Killed the Radio Star" and proceeded to do just that with music videos. Now, satellite radio technology is hoping to apply a little CPR to a medium that its developers say is out of tune with the times.

Satellite radio wants to do to radio what cable did to TV -- expand the horizons of an audience used to a handful of offerings. They're promising digital clarity, compelling original music programming and commercial-free or limited commercial channels.

The Federal Communications Commission has granted licenses to two companies -- XM Satellite Radio and Sirius Satellite Radio. New York-based Sirius and Washington, D.C.-based XM each will offer 100 channels of music, news and entertainment programming.

By the end of this year, listeners willing to shell out money for a new satellite band-equipped radio and a monthly subscription fee will have a mind-boggling array of listening choices. Sirius will launch nationally in the fourth quarter of this year. XM will launch its service next month in two markets -- San Diego and Dallas/Fort Worth, and nationally in early November.

Even in the largest radio markets, there are only a handful of popular formats. A blues or reggae station wouldn't last long, even in New York or Los Angeles. But although these genres can't sustain themselves as 24/7 operations, they account for significant record sales -- and a generally underserved audience. By dishing up a full smorgasbord of musical flavors to a subscriber base, the fledging satellite networks hope to serve the smallest of niche audiences -- even those who have been yearning for an all Tejano or opera or comedy station.

With more narrow defined oldies formats, listeners will get more variety and more songs from individual artists. Fans of '70s music who hate '80s music, and vice versa, will have their own channels.

"You won't hear any train wrecks where Buddy Holly collides into ABBA," says XM chief programming officer Lee Abrams.

Sirius will have 50 commercial-free music channels, created by its own staff of programmers. Among them:

Several hits channels, including Top 40, soft rock, love songs and channels of hits by decade ('50s through '90s).

Rock channels -- two classic and two alternative channels, plus hard rock/metal, album rock, eclectic rock and rock specials.

Country -- alternative, hits, classic country and bluegrass.

Jazz -- classic, contemporary and smooth.

R&B -- oldies, soul hits, urban hits, rap, soul ballads and gospel.

Several Latin and classical stations, plus New Age, reggae, blues, Christian, world music and dance music.

News programming includes CNBC, Public Radio International, World Radio Network, BBC World Service and more.

Talk formats aimed specifically at African-American, male and female listeners.

Programming unique to Sirius includes Live Broadway, devoted to the theater audience; a House of Blues channel; Wisdom Radio, which is devoted to health and wellness topics; and two NPR channels -- NPR Now and NPR Talk.

Five ABC channels, including Radio Disney, ESPNews, ESPN Radio and ABC NewsTalk.

From Texas, WBAP's "Midnight Cowboy" show, hosted by Eric Harley and aimed at truckers.

Competitor XM's offerings include:

Fifteen channels of hits music, including a Top 20, hits channels from MTV and VH-1, simulcasts of popular Los Angeles rock and New York Lite Rock stations, alternative, Christian, show tunes, movie soundtracks, Euro and global chart hits.

Six channels of hits by decade -- from big band/swing '40s to the '90s.

Ten rock channels, including album rock featuring deep cuts, hard rock, new rock, classic alternative, classic, progressive and independent and emerging acts.

Seven channels of urban -- old-school R&B, classic soul, urban, urban top 40 and uncut-and-uncensored hip hop.

Jazz -- traditional, light jazz, modern, vocals and standards, blues and Latin jazz.

Four dance channels.

New Age, Indian, African and Mandarin Chinese channels.

Talk programming geared to Christian, African-American and teen listeners.

"Open Road," aimed at long-haul truck drivers.

ABC News & Talk, ESPN and Radio Disney, NASCAR Radio and BBC World Service.

Several cable TV networks will program satellite versions on Sirius and XM, including A&E, The History Channel, C-SPAN, CNBC, E!, The Weather Channel, Fox News and CNN.

It's all about choice

What's wrong with your radio? Plenty, say the satellite programmers.

"Radio formatics and the product offering really haven't changed," says Joseph Capobianco, vice president of content for Sirius. "What is offered on any given station is a result of market dynamics. Even though you could say every city is different, radio sounds the same everywhere you go. Everybody plays the same thing."

He calls the heavy commercial loads "abusive" for audiences.

"A lot of that is due to the business plan of radio," Capobianco says. "Radio is very much a local market-driven business. Stations thrive on local ad dollars. Radio's primary mission is to deliver people to advertisers within that local market.

"The opportunity for Sirius is to flip that equation on its head and super-serve the individual subscriber, no matter where he or she may be. That changes the whole paradigm of what radio is for that consumer.

"Once someone gets satellite in their car, it's like the change from rabbit ears TV to having cable or DBS."

XM chief programming officer Lee Abrams is a veteran radio programmer who played a key role in developing several of the top formats still heard today -- including classic rock, urban/dance and the first New Age/jazz format. But he admits that radio has stuck to these formulas and stopped evolving.

Abrams compares satellite to the growth of FM radio in the '60s and '70s.

"AM was limited to a few formats -- middle of the road, easy listening, Top 40," Abrams says. "FM came in and invented a whole new generation of formats. A lot of music was happening -- Santana, Led Zeppelin -- and AMs really weren't playing a lot of the emerging music styles.

"AMs weren't meeting the audio standard. It was a stereo world -- 33s [long-playing records] didn't sound good on AM, but sounded great on FM. AM radio was loaded with commercials, while FM at the time was relatively commercial-free. AM at that time was very successful, but focusing more on the bottom line and not on the music."

As a result, Abrams explains, not only was FM technologically superior, but also the whole programming was dramatically different.

"And now fast-forward to 2001. We're seeing the same things. A lot of FMs aren't playing a lot of the music that's emerging. B.B. King is a cultural icon, and you don't hear him on the radio. Lots of bands sell incredible numbers of records, but all you get to hear are the hit singles. There's not much depth. FM is not part of the new digital audio standard."

Abrams says satellite programmers see a lot of similarities between 1970 and 2001.

"The opportunity exists for offering more choices, and to really rethink radio," he says. "That's probably the most exciting thing from a programming standpoint. We have to come out with something completely fresh, because we're charging for it. We want to have the same creative effect [as the early FMs], where it's a new totally different sound in radio from what you get on FM now.

"We don't want listeners. We want fans. The only way to do that is to create vibrant, compelling programming that has a point of view."

Abrams cites several examples of experimental programming on XM:

*"Unsigned" will give new artists a shot at airplay. "There are a lot of artists out there who are very good, but because they don't have an experienced lawyer or manager, they're stuck. We're offering them a national platform. In many respects, we hope to be the A&R wing for the major labels." Unsigned's program director is Pat Dinizio of The Smithereens.

*"XM Music Lab" is geared to the 40-something audience who grew up on good music but now has little to hear: "We found a generation of people over 40 who tend to listen to talk radio and news radio, but love music. There's nothing challenging enough for them on the dial. They don't want to hear 'Freebird' again."

*"Babble On," described in the program guide as "Young and Sassy Talk," is aimed at 13- to 17-year olds. "Talk radio works in every demographic," says Abrams. The teen talk channel is "a very edgy, off-the-wall channel, kind of the on-air equivalent of an AOL chat room."

Sirius has already recorded more than 500 interviews and 120 live-in-studio performances by major artists, which Capobianco says will add a new dimension to the music programming.

How competitors see it

Does satellite pose a serious threat to commercial radio? An emphatic "no" comes from KDKA-AM general manager Michael Young.

"While any medium is going to be competition because it offers other choices, I firmly believe the impact satellite radio will have on traditional over-the-air radio will be very small. The strength of radio is its programming to the local market."

KDKA's news and talk format won't be duplicated on satellite, Young insists. People will still need to tune in to a station like KDKA for news, weather and talk on local issues.

Clear Channel market executive vice president John Rohm agrees. Even in terms of music programming, local flavor is crucial. Clear Channel has six stations here -- WDVE-FM, WXDX-FM, WJJJ-FM, WWSW-FM, WKST-FM and WBGG-AM.

Even though satellite offers more music, he says, it will almost never beat a personality-driven radio show.

"I don't write it off as no competition. People will sample it," Rohm says. "[But] I don't think of it as any more of a replacement [for radio] than CDs or the Internet."

Clear Channel senior vice president of programming Gene Romano sees some fragmentation of the listening market with the advent of satellite. But he also says the new medium has several hoops to jump through. The question, he says, is "Will these services offer superior programming and different content" than what listeners are already getting? As for the niche audiences: "There's an audience for progressive and blues and alternative. The question will be, how large of an audience? And after a period, will consumers justify the monthly fees?"

Romano believes the successful formula for a good format is not just music, but what happens in between cuts -- "whether that means the X-Fest concert or Steelers play-by-play or Jim and Randy in the morning [on WDVE] or raising money for local charities."

Nonetheless, Clear Channel has a stake in XM: The broadcast giant, is developing several music and talk channels for XM.

As for satellite's criticism of terrestrial radio's sound quality, many commercial stations have upgraded equipment and now offer digital broadcasting and cleaner signals.

Still, the future looks bright for satellite, which could have more than 21 million subscribers by 2006, according to a Yankee Group study.

To tune in, the listener will need a three-band radio (AM, FM and Satellite] for car and home use. The major automakers will provide satellite radios as an option on new models. There also are adapters for existing car radios (although these won't be digital receivers, so the sound quality, while good, won't be quite as good.)

As for consumer costs, XM receiver prices start at $249 for adapters, and $299 for the easiest solution -- a plug-and-play unit from Sony, which works for home or car. Beyond that, other bells and whistles like CD players and video receivers will push the units into the over-$1,000 category. The Sirius tuner modules and antennae will range from $249 to $399.

In addition to buying special receivers, the consumer will pay a monthly subscription fee for the service -- $9.99 for XM, $12.95 for Sirius.

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