This Week: Can XM Save Radio?
Hosted Frank Ahrens
Washington Post Staff Writer
Tuesday, Jan. 21, 2002; 1 p.m. ET
Lee Abrams, the man who made commercial FM radio a bland wasteland, has a plan to revitalize the medium: XM Satellite Radio. He's betting that large numbers of consumers are ready and willing to pay for 100 niche channels, something akin to cable TV for radio.
Frank Ahrens, whose article "Why Radio Stinks" appeared in Sunday's Washington Post Magazine, will be online Tuesday, Jan. 21 at 1 p.m. ET, to field questions and comments about the article and about the future of radio.
Ahrens covers the media, entertainment, advertising and marketing industries for The Post. Before that, he covered the radio industry.
A transcript follows.
Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.
Frank Ahrens: Greetings, all, and welcome to the discussion. Wow, this is a time warp--it's like it's 1999 again, and we're back to the regular Tuesday radio talk! So much has happened since then...I got new glasses, lost hair, made a furtive run for Congress only to be derailed by a shocking scandal from my past, had my movie quashed by a Hollywood system afraid of the truth, zipped across the pond on the Concorde with Esperanto-speaking supermodels...ahh, what a time. Well, okay. I got new glasses and lost hair.
Thanks in advance for taking the time to read the my long magazine story. Let's get to your questions and comments.
(Radio) Del Ray, Va.: Thanks for the in-depth article on XM, Frank. As an Internet music broadcaster who was recently forced off the "air" by Congress's acquiescing to the outrageous royalty demands of groups like the RIAA, I would love to read your take on how this development may help or hurt satellite radio. I actually bode XM and its ilk no ill will, as they may indeed be the last shot to save listenable radio, what with the quashing of the internet and low-power FM. Thankya kindly!
Frank Ahrens: Radio Del Ray for those who have missed it was, and hopefully will be again, an excellent local Internet radio station. What RDR is referring to is the struggle over how much musical artists via their record companies and their lobby, the Recording Industry Association of America, should be paid by Internet broadcasters for playing their songs. Right now, I don't think the Internet royalty flap will give XM much more than a little bump in their new subscriptions. I'm not sure how or when Internet radio will recover from this royalty tussle.
Leesburg, Va.: I listen almost totally to talk radio like "Don and Mike", "The Sports Junkies", etc. Is there any reason for me to consider XM?
Frank Ahrens: Maybe not. XM is mostly about music. I got XM partially because I had covered its ramp-up here in D.C. but also because I love a lot of different kinds of music and found my tastes unrepresented on the D.C. radio dial. Also, I hate commercials.
Alexandria, Va.: Hi Frank,
Your comments about the sad state of "McRadio" here and everywhere else really resonated. It truly pains me that radio program directors almost to a person have this collective "We know what's best for you" attitude in spoon-feeding their programming to us.
Even assuming that Abrams succeeds with XM Radio, how soon before he becomes paralyzed again and develops the same fear of innovation that is so pervasive in radio today? I don't hold out much hope for him, if history is the guide.
Frank Ahrens: I got an interesting e-mail from someone yesterday saying that he believed that XM would continue to follow the example of cable television, which is to say it would soon be filled with ads unless you pay for "premium channels" like HBO. XM has guaranteed that its commercial channels will have only 6 minutes of advertising. But I suppose there is no guarantee that their non-commercial channels will remain so. Right now, advertising is a wash for XM; with 360,000 subscribers, it almost doesn't pay for anyone to buy an ad on XM; consequently, XM can only demand ad rates comparable to small cities, like Frederick. But if and when XM hits 1 million subscribers, it will be able to get more ad dollars and that temptation may be great.
In terms of Lee, I think he's very excited about what's going on at XM. As a consultant, he could launch a station but didn't have hands-on control thereafter. Now, he has direct control over 70 music channels, and I think that jazzes him.
Columbia, Md.: Hi Frank, I thought the Magazine article on XM was interesting, if somewhat after-the-fact. I'm wondering how public radio fits in context of your article. Is it irrelevant, even in D.C., because of its tiny audience? Particularly in light of the format change at WTMD (Towson University) to AAA (and it reaches well into MoCo & PG!), I no longer have much reason to wish for an XM receiver. With WTOP, WTMD, and my 200 CD binder, I'm never bored!
Frank Ahrens: I think public radio is a journalistically and culturally important part of radio. NPR signed to deliver its shows to XM's rival, Sirius, which in hindsight, looks like a pretty bad decision. Sirius has maybe 10 percent of XM's subscribers, diluted their stock to penny status to eliminate their debt and may be flirting with bankruptcy. And public radio, at least in D.C., does not have a tiny audience. "Morning Edition" is typically a Top 10 morning show on WAMU and gets an even bigger audience if you count in its listeners on WETA. The audience for Pacifica's local station, WPFW, is smaller. Since I can't get WTMD from Towson, I'll listen to Channel 45 on XM, which is their AAA (Adult Album Alternative) channel.
Arlington, Va.: First off -- great article. I couldn't agree more that radio stinks today. I turn on the "alternative" stations to hear songs from 10 years ago. Finding new music (much less local music) is difficult at best.
I would run out and buy XM immediately -- but I have to say the fear is that you plop down your $200+ to get started and in the back of your mind you're wondering if the services will last the year, much less 20.
Frank Ahrens: Good point. When I interviewed Hugh Panero, the XM chief executive, for the story, I told him: My XM subscription is up in December--should I renew for the year? Naturally, he said, "Yes, you should renew and you should get everyone else you know to buy one." Since the company got its $450 million in financing right before Christmas and appears to be rolling out well in GM cars, I guess I would be surprised to see XM go down anytime soon. There...you can read that quote on Jim Romensko's media Web site in 6 mos. when XM goes belly-up.
Spencer, Iowa: Hi, this is more of a comment then a question. I am a 28-year-old single male living in Spencer, Iowa -- a small town in northwestern Iowa. I travel a lot and I spend many hours each day in my vehicle. As you can imagine Iowa is not the best place to pick up radio stations unless you like listening to the farm report, Britney Spears and Led Zeppelin all day long. That is why I chose XM radio. XM radio has become my best friend. No matter where I go I can listen to what I want, not what the DJ only wants to listen to. I have basically quit watching TV, listening to FM or AM radio and for the most part stopped listening to my collection of CD's. XM radio is my #1 source of all my music, news, sports and entertainment. I have e-mailed the XM DJs and so far everyone of my requests have been played. I like XM so much I bought my mother and father both a XM radio for Christmas and now they both love XM. XM radio is the future of radio. The $9.99 a month is worth every penny.
Frank Ahrens: Now, there's a letter XM can post on its Web site. However, when you say "XM has become my best friend," being a misanthrope myself I sympathize, but still encourage at least occasional if fitful human contact.
Washington, D.C. Area: Your article discusses satellite radio, but from what I understand digital AM/FM radio which offers CD sound and on-demand services is already rolling out in major markets. What is your view on radically improved terrestrial radio and how it will effect the broadcast industry (including satellite providers)?
Frank Ahrens: Good question. Yes, the transition to digital AM and FM is underway, though it's important to remember you'll need a new digital radio to hear digital music. Digital AM and FM will improve the sound (I've heard some early versions) and because a digital signal can carry text and video, stations can stream the name of the song you're hearing and the artist along with the song to your radio and display it on a readout. However, until AM and particularly FM improves what it plays, it'll only be better sounding same-old stuff.
Fairfax, Va.: What are the eight stations in the D.C. market that Clear Channel owns?
Frank Ahrens: They are: Rock DC101, WASH 97.1 (EZ listening), Top 40 Hot 99.5, country WMZQ, oldies 100.3, sports-talk WTEM-AM, talk WTNT and bizness 1260 AM.
Frank Ahrens: FYI, just wanted to note something: If my magazine story read at least partly like a product endorsement, well, it was. I've had XM for more than a year and I think it's a great product, as I stated. Which is why it was important for me to disclose in the story that I own it, so there would be no apparent conflict of interest. Also, I did not talk about XM's rival, Sirius, in New York. I chose to do that because I wanted to frame the story around Lee and radio in general. Had we worked for Sirius, I may not have mentioned XM. While I think XM is a great product, it still has to prove it's a great business. And as for Lee Abrams, who I think is very good at what he does, I was struck by the irony that this was a man who had essentially created the thing he was railing against now, and realized it. Also, because I cover XM, I can't own stock in the company, the same way I can't own stock in any company I cover, like Disney and AOL Time Warner. So my journalism has no stake in the company's performance.
Silver Spring, Md.: Well I might pay for better radio. I hope auto makers put better XM radios in than the radios you get now. I have replaced the radio in nearly every car I've ever owned.
I thought your article was interesting in rationalizing why radio stinks. It seems that every channel has talk shows in the mornings with idiots attempting to entertain me. Do the polls really show that cubicle weary warriors on their way to work want idiot babble in the morning? It's better in the afternoons with more music and less talk.
Frank Ahrens: As Abrams said to me once, "Basically, you've now got personality morning shows and audience-tested music the rest of the day." It's a balancing act that radio stations play. Enough people evidently like the morning show style to keep listening to get the ratings the station wants. So it doesn't make sense, really, to blow it up and try something different--say, no morning show or a completely different morning show style--because though it might succeed, it also might fail and there goes your revenue. Stations play it safe, which is understandable, given how much they cost to buy and how much quarterly performance Wall Street expects from their parent companies.
Buffalo, N.Y.: I like XM, but I HATE all the interruptions on the '60s channel. There's too much DJ schtick and jingles. Play more music please.
Frank Ahrens: Note to XM.
Escondido, Calif.: Will XMRadio be available on Walkmans such as portable radios?
Frank Ahrens: Take a look at the Web site, www.xmradio.com. They just introduced a radio by Dephi that can plug into a boom box.
Fallls Church, Va.: I miss your radio discussions Frank. I considered getting XM for my home (hook it up to the Bose Wave) and my truck (the cool Delphi unit) but it got costly, complicated and the home unit started to sound like it would look like an old fashioned set up with the antennae suspended on a coat hanger to get the correct orientation. If XM had a reasonably priced free standing, self contained radio I could buy I would probably jump on it for my home. I would pay 10 bucks a month for service and I would be willing to pay about 200 for a home radio. I wonder how much I would use it in my truck since I usually listen to local stuff and always check in for "traffic on the eights". Seems XM is missing the mark in their marketing aimed at vehicle use rather than home use. Tina
Frank Ahrens: Hi, Tina. Good to hear from you. I'll post this so XM can see it. Hope things are well with you.
Lexington Park, Md.: What do you think XM (and the other guy?) will do to/with the syndicated shows? You mentioned that Rush was offered a deal, but what about the other two big shows (Howard and Don & Mike). Will they sign on or...?
Frank Ahrens: I think XM still wants to land a really big fish. Howard Stern would most definitely qualify. He's making noises, again, about his contract with Viacom ending soon. He feels disrespected by Viacom boss Mel Karmazin, but you never know how much of this is real and how much is on-air bargaining tactic. I know XM would have to have Stern. XM, call Howard. Howard, call XM...
Bowie, Md.: Great article Frank! I couldn't put it down. As a former major market on-air personality, I can't wait to get my XM radio. In this day and age when you're being force-fed advertising no matter where you go, it's refreshing to have something to turn to where half the hour isn't swallowed up in spots and mindless banter. Like you, all I need is my traffic on the 8's and I'm on my way!
Frank Ahrens: Now that's very interesting to hear from a person who's been in the business for a long time. In the three years I covered radio, I don't know if I got more complaints about it from listeners or from people in the industry, sad about the way it had changed.
RE: Digital Radio: Digital AM isn't going to be a cure-all, because the current technology causes interference on adjacent channels (for example, if WTOP went digital, 1490 and 1510 would be noisy), which would kill off just about the last fun thing in radio: finding far off AM signals at night.
One thought about the "same-ness" of radio. XM isn't really an answer to this, beyond the fact that there are 100 stations, because there's no local content. It would be a true killer-app if they could find a way to get local content (or at least regional content) shoehorned in there somehow. Sure, everybody's hearing the same music coast to coast, but it would be cool if there was a weather break from a terrestrial repeater somewhere.
Frank Ahrens: Good point. I think one of XM's great services, if it gets big enough to pose a business threat to AM/FM is that it will clarify AM/FM's mission to be local. About the only FM I tune into these days is the go-go show on WPGC, because it plays something--local D.C. music--I can't hear anywhere else on a regularly scheduled basis. I will tell you this: If XM tries to be local, or more importantly, uses its system of local repeaters to try to start selling local advertising, the National Association of Broadcasters (the radio lobby) will be at the FCC and in court faster than you can say "competition," because the bread-and-butter of AM/FM stations is local advertising.
Shepherdstown, W. Va.: Frank,
Your piece on XM radio in Sunday's Post was golden. To read you write about the radio industry with authority and wit took me back to your days as the Listener and the weekly chat. The new guy is OK, but you had a better command of the radio side. The posters had a much better style, too. I miss the Original W, GenX girl, and the others.
Not really a question, just one loud sigh for the good ole days.
How 'bout them 'eers now?
Frank Ahrens: Yes, I am most disappointed that the late lamented Gen-X Gurl has not shown up today. I wonder what she's up to, he wondered, wistfully...
Falls Church, Va.: Nice to see you chat again, especially on the topic of radio.
Seems that conventional wisdom is that people only listen to radio in their cars. What about this? XM seems at least originally to have swallowed that hook-line-and-sinker -– when I bought my first XM radio in late 2001, they only sold one version which you could plug into your home stereo (and I needed to special order a kit to do so, it took a month for delivery, etc.). Now they’re starting to sell some more versions you can use at home -– even a boombox. Did they learn that people actually do listen at home –- maybe even that the type of niche users they’re going after might use radio differently from the typical commuter? Or perhaps this was a problem in convincing the radio manufacturers to produce a home unit? Or is it even true that radio users only listen in the car (or maybe if it is true, that’s because of the current poor quality of AM/FM radio as entertainment, that people would NEVER listen to it except that in the car it’s the only thing available…)
Frank Ahrens: I think the original XM strategy was to focus on the car because, compared to the home, listeners have fewer entertainment options in the car. And, on a percentage basis, more radio listening does occur in the car. However, XM knows that because it is a niche-oriented, luxury item, it needs to be in the home, on a boombox, on the beach, etc., so now it's rolling out its second-gen products.
Silver Spring, Md.: Will XM have a station that broadcasts live baseball games all the time?
Frank Ahrens: Good question. That is my one complaint about the service...not enough live sports. XM did the World Series this year and last, and that was a blessing: I had to drive to W.Va. during Games 1 and 3 of this year's WS, and it was a delight to listen to the games in an uninterrupted fashion instead of trying to pond-skip from one AM to the next. But don't expect a lot of live sports soon. The AM and FM stations and their networks that currently have the rights to broadcast major league baseball, the NFL, etc. would rather not let XM in on the party. As Lee said to me once, "It would be like Iraq asking the U.S. to borrow some ICBMs." However, if XM continues to grow, the sports leagues will see that they are missing a large audience and will probably try to get their games on XM.
New York, N.Y.: Like many metro New Yorkers (and District'ers), I don't have a car. What I DO have, though, is an office where I spend 10 hours a day. In my office is a radio, which I have 'on' all day, but at least 60 percent of the time the volume is turned to zero because of commercials, lousy songs and songs I've heard a billion times on the two stations I find palatable (not even that I like).
Can I get XM in a high-rise building with other skyscrapers around it? I find this similar to DirecTV, which I love but can't get because I don't have a SW facing area. My window faces in an easterly direction.
Frank Ahrens: That's a good question that I don't think I'm qualified to answer. There's a couple of e-mail addresses on the XM Web site that I think you can send your question to. Also, ask Sirius. New York is filled with terrestrial repeaters to bounce XM's satellite signal around. I can tell you the couple of times I've driven in New York, I had some drop-outs because of the canyon effect of the tall buildings. And you're right: satellite services need a Southernly line-of-sight.
State College, Pa.:
What are some of the greatest technical hurdles to get over, to successfully deliver Widespread XM Radio?
Which will be solved near term, and which are long term issues?
Frank Ahrens: Really, I'm not sure there are technical hurdles. There are market hurdles. XM relied on early adopters like myself for its launch. Most people are not willing to do what I did: Find out about a new product on my own, then go to a store and have them pull the radio I already have in my car and put in a new one that has not demonstrated to me that it's worthwhile. XM's widespread acceptance depends on it "already being there," which is to say, already an option on new cars, which is happening now with GM vehicles. If you're buying a new car and they say, "Your monthly payment will be $300 without XM or $300.50 with XM and it's already in the car," more people will get it. Also, more people need to hear it. Generally, when people hear it they become evangelists. But it's hard to describe without experiencing it.
Herndon, Va.: Hey Big Frank: Great to have you back on more consistently. Will XM have at least a few channels devoted to jazz? (and I don't mean Jazz Lite!)
Frank Ahrens: Hey, Li'l Herndon. Good to hear from you. Yes, XM has six jazz and jazzy channels, including straight-ahead jazz, experimental jazz, yes (argh) lite jazz, a jazz singers station and a groovy cocktail station. Go to www.xmradio.com to see all the channels.
Frank Ahrens: BTW, how's this for moving markets: XM stock is up 15 percent after opening today.
Washington, D.C.: I disagree that XM is only about radio. I am thrilled to be able to listen to CNN and Fox News in my car now. No offense to NPR, but I think the news offerings in the D.C. market are lousy. XM lets me listen to real news without a bit on how they make folk instruments in the Adirondaks, or the sound-bite "news on the 8's". Also, I think the comedy channel is great!
Frank Ahrens: So noted. Thanks.
Falls Church, Va.: How about the Greaseman to XM? (I say that as someone who generally hates those morning programs, but the Grease WAS funny.)
Frank Ahrens: I bet the Greaseman would jump in a second if that wanted him.
Office Niche: I hope XM doesn't overlook an important radio niche that is completely unexploited: office radio listening. About 10 people in my office now have XM and listen to (on headphones or in their enclosed office) it purely because it doesn't have advertising. The classical music stations and jazz are the most popular. A marketing campaign leading towards office use might go a long way to get XM a niche it can call its own.
One problem: you need a window with a southern exposure right now, which annoys those in cubicles or with north-faching offices.
Frank Ahrens: Excactly as we discussed before. Thanks for the posting.
Louisville, Ky.: It is obvious that intensive music research dictates tight playlists on radio stations, what guarantee do XM's paying customers have that programmers won't do the same bland "narrowcasting" of music on these channels?
Frank Ahrens: That's a good question. Right now, XM does not have a good way of judging how many people are listening and what they're listening to, other than by e-mails. However, the company will soon have technology that will tell them, in a real-time fashion, how many people people are listening to each station, and the numbers will rise and fall based on what songs they play. If XM plays a "bad song" and listenership drops, that song may get dumped from the playlist. This could lead to the sort of tight playlists that FM has now, but I'm hoping it doesn't.
Silver Spring, Md.: "Also, more people need to hear it. Generally, when people hear it they become evangelists. But it's hard to describe without experiencing it. "
That hits the nail on the head. I explained it to friends and they were ho-hum. I played half a dozen stations and they got the point.
My wife's (small) office has it now. EVERY person that walks in asks what they are listening to.
Frank Ahrens: Zactly.
Arlington, Va.: What about HD Radio? I have seen articles popping up around the country that are extremely positive. As I understand it, HD Radio will be a free service to consumers.
Frank Ahrens: Take a look a my answer higher up on digital, or HD radio.
Washington, D.C.: Great radio stations are few and far between. I use the Internet to listen to radio stations like KFOG (San Francisco) that still have a shred of originality. I'm not sure who owns KFOG, but it can't possibly be ClearChannel or Westwood One, they wouldn't stand for it.
Frank Ahrens: Funny you mention KFOG. It is owned by Susquenhanna, which is not Clear Channel but ain't mom and pop, either. It was at KFOG in about 1982 where Lee Abrams rolled out his "Superstars II" format, which was essentially the first AAA or Adult Album Alternative station. This was a station for rockers as they aged, a little mellower but still adventurous. A local AAA station, if you live on the east side of D.C., is WRNR 103.1 in Annapolis.
Washington, D.C.: Hi Frank: Terrific article. I'm wondering if you can tell me how diverse you have found the songs played on a specific XM channel to be. One of my favorite radio stations is WNRN in Charlottesville, which plays an astoundingly diverse selection of music. Does one find really interesting songs on Fred, for instance, or is it more like R.E.M.'s greatest hits? Thanks.
Frank Ahrens: I find hits on Fred, but I also find less-popular songs by well-known artists, which follows what Abrams did with his original Superstars AOR format. For instance, yes, I'll hear R.E.M.'s "Losing My Religion" on Fred, the Classic Alternative channel, but I'll also hear "Electrolite."
Washington, D.C.: I'm curious about Sirus (?) the competitor to XM -- what is their story? I heard they were totally commercial free, unlike XM, which has some, but may not survive. Is this a Beta/VHS type thing or more like a Comcast vs. Starpower cable battle?
Frank Ahrens: Sirius and XM both got their FCC licenses as the same time and for awhile, Sirius was ahead of XM. But then XM experienced technical delays and management problems and had to delay their launch, which was a crucial setback. XM launched Sept. 2001; Sirius didn't launch until last summer. Sirius eradicated its debt but diluted its stock. XM still has debt but has operating money going forward.
Montclair, Va.: Wow -- they've got you going head-to-head with your successor today. I've missed your weekly online chats, as well as your Style columns.
Frank Ahrens: We'll have to see who got higher ratings today, me or Farhi. It's all about the cheddar!
Frank Ahrens: That's going to do it, folks. It was fun to be back talking radio, esp. with some familiar voices (wither O Dubya and Gen-X Gurl...?). Thanks for tuning in today. Now, it's back to my glamorous life of state dinners and weekends in Aruba. Hmmm...maybe I need new glasses.
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