Xm Radio Marketing Analysis
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XM Satellite Radio
Competing in the New Digital World
[pic]
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This case was written by Professor Michele Greenwald, Visiting Professor at HEC Paris, for use with Advertising and Promotion: An Integrated Marketing Communications Perspective – 7th edition by George E. Belch and Michael A. Belch. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources
Introduction
When Fortune magazine named its product of the year in 2001, the winner was a new technology that many feel may revolutionize the way we listen to radio. The magazine’s rationale for its selection stated: “Of all the new technologies of 2001, XM Satellite Radio is way, way, way above the rest. It’s the first major advance in radio since FM emerged in the 1960s, and the best thing to happen to mobile music since the dashboard CD player.” After spending more than a billion dollars for programming and satellite operating expenses, as well as catchy TV commercials featuring celebrities such as David Bowie, B.B. King and Snoop Dogg; XM Satellite radio hit the airways in the Fall of 2001, claiming that it would do for radio what cable did for television. XM used “Rock” and “Roll,” its two Boeing 702 satellites stationed over the East and West coasts to beam more than 100 audio channels from the stratosphere to subscribers’ cars. While subscribers to satellite radio can still receive regular AM and FM terrestrial stations via their car antennas, by 2006 they could get more than 170 XM channels of nearly commercial-free digital radio that includes music, news, talk, sports, and children’s programming. Many industry observers noted that there was a tremendous
XM Satellite Radio
Competing in the New Digital World
[pic]
______________________________________________________________________________
This case was written by Professor Michele Greenwald, Visiting Professor at HEC Paris, for use with Advertising and Promotion: An Integrated Marketing Communications Perspective – 7th edition by George E. Belch and Michael A. Belch. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation.
The case was compiled from published sources
Introduction
When Fortune magazine named its product of the year in 2001, the winner was a new technology that many feel may revolutionize the way we listen to radio. The magazine’s rationale for its selection stated: “Of all the new technologies of 2001, XM Satellite Radio is way, way, way above the rest. It’s the first major advance in radio since FM emerged in the 1960s, and the best thing to happen to mobile music since the dashboard CD player.” After spending more than a billion dollars for programming and satellite operating expenses, as well as catchy TV commercials featuring celebrities such as David Bowie, B.B. King and Snoop Dogg; XM Satellite radio hit the airways in the Fall of 2001, claiming that it would do for radio what cable did for television. XM used “Rock” and “Roll,” its two Boeing 702 satellites stationed over the East and West coasts to beam more than 100 audio channels from the stratosphere to subscribers’ cars. While subscribers to satellite radio can still receive regular AM and FM terrestrial stations via their car antennas, by 2006 they could get more than 170 XM channels of nearly commercial-free digital radio that includes music, news, talk, sports, and children’s programming. Many industry observers noted that there was a tremendous