SIRIUS HOPES TO EMULATE SUCCESS OF DIRECTV
LAS VEGAS -- Sirius Satellite Radio’s 2002 rollout plans will have predictable ring of familiarity as new CEO Joseph Clayton told news conference Mon. at Consumer Electronics Show (CES) here that aim would be to repeat successes of 1994 DirecTV launch over which he presided as senior Thomson-RCA executive.
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Citing “striking similarities” between public’s appetite for DBS and potential allure for satellite radio, Clayton mapped out launch strategy similar to that used in 1994 for RCA Digital Satellite System (DSS) receivers, including signing on Jackson, Miss., independent retailer Cowboy Maloney to participate in Feb. 14 launch. Jackson joins previously announced debut markets Denver, Houston and Phoenix to go actively online first. They will be followed in intervals of 45-60 days by 2nd phase in Albuquerque, Dallas, Little Rock and Tulsa, and thereafter in Indianapolis, Miami, Nashville and Tampa. Rest of country will begin in July-Aug.
Clayton said “we're not married to any strategy,” indicating rollout tack would be fine-tuned to learn from mistakes of rival XM and “emulate their successes.” In significant departure from company’s hard stance for months before Clayton’s arrival that it would stand by $12.95 monthly subscription fee vs. XM’s $9.95, Clayton didn’t rule out going to lower or even higher fee if promotional conditions warranted it. For example, he said Sirius already had decided to promote activations with rebate offer or 3 months’ free service in markets he wouldn’t identify. Retail rollout will be supported by swarm of aggressive grass-roots promotions also reminiscent of DSS. Highlight will be 65-ft. portable Ferris wheel sporting cars for each of Sirius’s main musical genres. Clayton said effort would be “like taking a state fair to a retailer’s parking lot.”
As for promotion, Clayton said Sirius would be differentiated strongly from XM in at least 5 areas -- commercial-free music, original programming, “superior sound resolution,” ergonomic superiority, better customer service. In other Sirius developments: (1) Clayton said completion of $158 million stock offering “takes any immediate liquidity concerns off the table.” (2) Clayton said fact that XM has gotten off to head start won’t put Sirius at long-term disadvantage. Consumer awareness of satellite radio still is quite low, he said, and history of CE industry is full of examples such as VHS vs. Betamax where first to market didn’t guarantee success.
Meanwhile, XM had 28,000 subscribers at end of year and number has risen to 30,000, company said Mon. Company said it beat projections of Wall St. analysts which had predicted sales of 20,000-30,000. XM said it has shipped 100,000 radios and manufacturing partners would be producing 50,000 radios per month by March. Company also expects to exceed target of selling radios in 6,000 retail stores by end of first quarter.