PRI to announce satellite deal, NPR also will plan sky streams

Originally published in Current, May 24, 1999
By Steve Behrens

Both PRI and NPR are talking with direct-to-listener satellite companies about supplying channels when the start-ups launch continent-wide digital broadcasting late in 2000.

PRI will soon announce a multi-year deal with one of the radio satellite companies to provide two channels for its service, according to President Stephen Salyer.

And CPB announced at the Public Radio Conference a $200,000 grant to NPR's $800,000 Virtual Programming and New Technologies project, which will plan program streams for satellite radio, the Internet and other new media.

It's not clear what the PRI or NPR programming would be, but in NPR's case it won't include Morning Edition or All Things Considered, since NPR is operating under a "strategic framework" adopted by its board last July that permits the development of new streams so long as they don't "compromise the long-term viability" of member stations.

And it probably won't involve expensive original production. "In some ways it will be like the early days of cable," said PRI's Salyer. "We can't afford major programming investments."

NPR Chief Operating Officer Peter Jablow said the network is talking with all satellite operators, but neither he nor Salyer would say whether they're choosing to deal with XM or CD Radio--the two firms with licenses to launch high-powered satellite broadcasting stations with 100 channels apiece.

Jablow said NPR would prefer to provide the channels to both operators and would consider an exclusive deal only if that operator is expected to win the competition. He said NPR aims to begin developing and testing program concepts in July.

"The system understands that new technologies are a risk on one hand, but a huge opportunity on the other," Jablow told Current. Public radio's networks seem to be moving into program-supplier relationships with a new species of national distributor--a risky step that public TV never took when it was watching the cable TV industry develop in the 1980s.

CPB President Bob Coonrod, when he announced the grant to NPR May 13, offered a rationale for going ahead: "When our existing and potential listeners explore this new media terrain, they must find the public service audio that they value."

"By that, I mean positioning our public service audio as a clear and immediate choice for American listeners, who will have an enormous range of options via satellite radio," Coonrod continued. "The core goal of this project is to claim public radio's share of the digital spectrum and ensure the presence of mission-based news, information and entertainment programming in the digital satellite universe."

Though PRI and NPR may risk some investment to establish themselves as program suppliers before the satellite radio biz takes off, their risk will be small change compared to the mega-outlays by investors in XM and CD Radio.

To start with, each company bid more than $80 million to get its 12.5 megahertz chunk of spectrum during an April 1997 auction. Now they have to build and launch two or more high-powered satellites and install dozens of terrestrial mini-stations (using the same frequencies) in downtown areas where satellite reception will be iffy. And then they'll keep 100 channels going until the revenue rolls in, or not.

Both expect to charge subscribers $10 a month. XM will carry six minutes of ads per hour on most channels. CD Radio says its music channels will be commercial-free.

Execs from the two companies described their plans in sessions at the PRC:

XM Satellite Radio: The D.C.-based company, largely owned by American Mobile Satellite Corp., started out as American Mobile Radio Corp., but changed its name to "XM," as in: "AM ... FM ... XM!"

Lee Abrams, developer of the album-oriented rock format and now senior v.p. at XM, said the firm will program its own music channels but contract for production of others. Announced partners include CNN (three channels), USA Today, C-SPAN, Bloomberg News Radio, One-On-One sports talk, BET/Radio One (four African-American channels), AsiaOne (two channels, Chinese and Hindi), Heftel Broadcasting (five Spanish channels) and Salem Communications (three Christian channels).

Abrams figures that XM can "kick ass" by offering "amazing radio," including musical genres that FM still won't touch, "whether it's Enya or B.B. King," or continuous cricket sounds. With 100 channels, XM can dare to broadcast a Satan Weekend without losing the Ace Hardware account, Abrams joked.

He said Pioneer, Alpine, Sharp, Delco and others will make radios with XM capability. Because General Motors' Hughes Electronics is a major owner of its parent company, XM reportedly has a favored relationship with GM. Hughes also owns DirecTV, the major television DBS service.

CD Radio: The company that set off the satellite radio competition by petitioning the FCC for channels in 1990 remains a separately traded company that lost $86 million in calendar 1998.

CD Radio, based in New York City, will offer 50 monaural voice channels (including 10 news streams) and 50 of music (including oldies channels for every decade). The music will be commercial-free.

Robert Briskman, executive v.p. of CD Radio, said subscribers will be able to listen at home or in their cars, but the company will focus on mobile listening. As explained in company literature, CD Radio will offer a small "radio card," activated by slipping it into the cassette player. The signal supposedly will be relayed wirelessly from an antenna, the size of a silver dollar, affixed to the car's back window.

Bill Wiltshire, an attorney for a third satellite radio applicant, a California-based consortium called WCS Radio, Inc., also spoke on a PRC panel.

Completing the panel was a face that would be familiar to longtime pubcasters, former NPR and PBS programmer Sam Holt--now v.p. of content strategy for WorldSpace, a satellite radio broadcaster that plans continent-wide services for Africa, Latin America and Asia. The firm is also a minority owner of XM. Holt hung around to celebrate the 20th anniversary of Morning Edition, which he helped start.



To Current's home page

Earlier news: The uphill race for digital radio includes regular terrestrial radio stations as well as the satellite firms that won frequencies at auction, 1997.

Later news: At the same Public Radio Conference, NPR and PRI unveiled their plans for Internet services to station web sites, 1999.

Outside link: CD Radio's web site.

Outside link: XM Satellite Radio's web site.

Through an alliance with GM, XM receivers may come with many cars. Above: artist's conception of an in-dash model.

Web page created May 24, 1999, corrected March 24, 2000
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