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Will Americans pay to turn on the radio?

Until now, radio has been free. But with new satellite technology and customizable playlists, will customers be willing to pay to play?

By Lynne MargolisSpecial to The Christian Science Monitor / July 5, 2002


Like many Americans, blues musician Delbert McClinton has turned off his radio.

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He says he can't listen anymore because "in order to hear one good song, you've gotta wade through an hour of stuff that has no substance to it whatsoever."

"People are tired of hearing what they're hearing," he adds.

Quality-starved radio fans like McClinton now have a new option.

Two new satellite-transmitted services – Sirius Satellite Radio and XM Satellite Radio – are each offering 100 channels of music, news, and entertainment programming with CD-quality sound and minimal or no commercial interruption. And, unlike terrestrial (land-transmitted) radio signals, satellite gives car-obsessed Americans the ability to cruise from Maine to California without ever having to change the station.

XM reaches listeners via two satellites, cutely named Rock and Roll, positioned over the East and West coasts. Sirius, named after the Dog Star, has three, orbiting over the country. Both use terrestrial "repeaters" for areas where buildings or similar obstacles could prevent clear reception. Each has exclusive deals with carmakers and radio manufacturers; Sirius radios also will become standard equipment in Formula powerboats.

Both offer country, rock, classical, Latin, jazz, and almost every other musical format, each of which has been split into several subcategories. The concept is much like that of cable or satellite TV: infinitely more variety and much better transmission – for a price.

Another monthly fee to worry about

Are Americans hungry enough for variety to pay a few hundred dollars for new equipment, plus a monthly fee of either $9.99 or $12.95, for a service they've always gotten free of charge?

Not according to local radio fan Kelly Rasmussen. "I'd return to my cassette tapes or old radio broadcasts before I'd pay a satellite company any money for what should be and always has been free just for putting up with commercials," she comments on the Internet site ZDNet.

Adding to the risk is this summer's economic doldrums. With a rocky stock market undermining already shaky consumer confidence, Americans may be hesitant to add another bill to the monthly pile.

But a just-released survey conducted by the Future of Music Coalition (FMC), a nonprofit advocacy group in Washington, D.C., that works on issues affecting artists, may bolster satellite radio's bottom line. More than half of the 500 people interviewed said they want more new music, with less repetition than they get on today's conglomerate-owned commercial stations.

Millions of them have turned to Internet broadcasters, but there's one problem: You can't listen to Internet radio in your car.

Independent Internet radio broadcasters might soon go the way of the eight-track tape anyway, because the Librarian of Congress has just mandated they must pay song royalty fees that in most cases will far outstrip their income.

With the demise of Napster and other musical file-sharing services, listeners craving exposure to new music might find satellite radio a worthy option.

"XM can and has opened up entirely new areas of music to explore," says subscriber Don Herring. "You can listen to music that you would not even begin to know how to sample [on the Internet]. I'm getting a very thorough reeducation in my favorite genre on the all-blues channel."

The two companies are counting on listeners' being attracted to their programming and strong air personalities, many of them industry legends who are thrilled at having another chance to create radio as they did once upon a time.

"In a world where [CDs] cost $18, music fans really rely on and look forward to people who can essentially serve as editors for them," says FMC lobbyist Michael Bracy. "They want to have a DJ controlling what gets played and they want access to more alternative programming models than they're offered in commercial radio.