BEYOND TERRESTRIAL RADIO: A PRELUDE TO A PHILOSOPHY OF FUTURE MEDIA

BEYOND TERRESTRIAL RADIO:A PRELUDE TO A PHILOSOPHY OF FUTURE MEDIAByANDREW WHITACREA Project Submitted to the Faculty of Wake Forest UniversityIn Fulfillment of the RequirementsFor Honors Distinctionin the Department of CommunicationApril 24, 2002Winston-Salem, North CarolinaApproved By:Ananda Mitra________________________________ Examining Committee:Geoffrey Baym________________________________ Jill McMillan________________________________ Ananda Mitra________________________________

IntroductionOn September 25, 2001, XM Satellite Radio (XM) launched a service to provide paying subscribers with radio that they would traditionally receive free of charge. With inhand an $80 million Federal Communications Commission license to broadcast itssignals via satellite rather than through a network of ground-based transmitters, XM hadraised $1.1 billion to launch two Boeing-made satellites and to build a 60,000 square-foot broadcasting headquarters in Washington, D.C. (Colker T1). XM also secured deals withelectronics manufacturers and auto-makers to make certain the public can buy XM-readyreceivers, and by pouring $100 million into a preliminary advertising campaign, it madesure the public would know about this new, “revolutionary” technology (Taub G1).What was supposed to be revolutionary was that this new conception of radio wouldfinancially support its 100, genre-specific channels with almost no advertising withintheir programming (see appendix for full channel listing). Instead, the commercial-free programming is funded directly by the listener through subscription fees.

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From its nationwide rollout in November to the beginning of 2002, XM hadsigned up more than 30,000 subscribers, making satellite radio the fastest-selling piece of audio equipment in twenty years—topping even compact disc and DVD players whenthey were first made available (XM Satellite Radio “XM Ranks”). Thus far, marketresponse to the new service has been extremely positive. XM signed up those thirtythousand customers despite an economy still in recession during the 2001 holiday season,and the company immediately received their customers’ wide endorsement. 94 percent

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About thirty percent of XM’s channels are entirely commercial-free at present, and most have minimaladvertising in any case.

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of respondents to a Greystone Communications survey described the technology as“excellent” and 99 percent regarded the $10-per-month charge a “good” or “excellent”value (“XM Ranks”). XM expects to sell hundreds of thousands of more units in the nextyear, as car companies like General Motors make the radios available in their 2003model-year automobiles.RationaleOne could ask why this development is so important. He or she could answer thatit is at least

interesting

for the obvious reason that satellite radio stands so much incontrast to traditional, terrestrial AM/FM radio. Terrestrial broadcasting, first of all, islimited substantially by the curvature and topography of the earth, for if a station wishesto reach listeners farther than a few dozen miles away, it must replicate and rebroadcastits signals through ground-based transmitters (“FM Transmitter Kits”). Secondly, also incontrast to current satellite radio, the majority of terrestrial broadcasting is greatlydependent upon mid-program advertising as a source of revenue (Boehlert). Finally,unlike XM, which has 82 of its 100 channels centralized in a single block of studios inone building in Washington, D.C., terrestrial broadcasters have to depend very muchupon conglomeration of many individual stations across the United States (Boehlert).That is, ground-based radio, in order to maximize efficiencies, conducts a practice calledconglomeration by buying and consolidating many disparate stations; it then centralizesthe management and programs the stations’ content only to the two or three most popular genres. Ultimately, as a combination of the three differences above, the content of terrestrial radio can be greatly affected: in order for a conglomerate to overcome thelimits of geography while delivering its advertisers the biggest audience possible, theWhitacre 3