Sirius: Radio from the Heavens

After more than eleven years of development,
Sirius is about to be
launched (expect it for the first quarter of 2001). Haven’t heard of them?
Well, you probably will. In fact, the next car you buy will probably have
their technology.

Sirius is only one of the two companies that have been licensed by the
Federal Communications Commission to develop digital satellite radio for
autos. The radio content is beamed from satellites and is commercial-free.
There is seamless coast-to-coast coverage (no static or interference) and
you get digital-quality sound.

Basically, Sirius is like the cable TV model: you pay a monthly fee, which
is $9.95. You then select the type of content you want to listen to. In
all, there are 50 channels covering such things as sports, news and
entertainment.

As for the music content, Sirius will have its own team of DJ’s. Actually,
the company has a state-of-the-art broadcasting facility. There is a
library of 2 million pieces of music, two performance spaces and 150 miles
of cable.

The news and entertainment programming will be from top providers, like
CNBC, National Public Radio and Bloomberg.

Of course, a critical piece is the satellite network. Sirius has launched
two satellites and another one will launch soon. There will is a spare
satellite that will be kept in storage.

Clearly, traditional radio is a dinosaur. You must contend with distracting
commercials, static, and limited content. So it is no surprise that Sirius
has been able to sign-up major car dealers to install the technology. Partners
include Ford, Chrysler, BMW, Mercedes, Mazda, Jaguar and Volvo.

What’s more, because of the FCC approval and heavy capital costs, Sirius has
incredible barriers to entry. It’s a great formula for creating a cash
machine.