Xm Satelite Radio

XM Satellite Radio Case

1. How is XM Satellite Radio differentiating its product from that of Sirius?

XM satellite has tried to differentiate itself from Sirius Satellite by providing programming that effectively brings value to its target markets. They have also developed a multitude of receivers to fit every users need or want. XM has also merged their product into other consumer products such as vehicles.

In February 2007, XM Radio and Sirius Radio announced that they planned to merge into a single satellite radio company. XM and Sirius are both in debt, and a merger could solve that problem. The merger may also lead to lower prices and more programming choices for consumers. Some people are worried about the two companies joining, fearing a monopoly would raise prices. “With a merger, Sirius and XM stand to save a lot of money. �There are billions of dollars--billions with a 'B'--that could be saved,’ says Sirius CEO Mel Karmazin. And failing to merge could be costly. On their own, they might be tempting targets for a satellite TV company such as Directv Group or a cable provider such as Comcast.” (Elstrom, 2007)

XM is very comparable in price to Sirius and offers many of the same functions. “Currently, subscribers can receive the XM signal for $12.95 per month. For that price, listeners get up to 100 channels of music, talk and news. They also get access to XM Radio online, a streaming audio service with over 70 channels. Many of the channels have no commercials, with none of the channels having more than seven minutes of ads per hour. XM's content providers include USA Today, BBC, CNN, Sports Illustrated and The Weather Channel.” (Bonsor, 2008)

2. What role has quality played in XM's product development and management?

Sound quality is one of satellite radio’s defining characteristics. Regular AM and FM radio can be static and distance causes you to lose channels and stations. Through the use of satellite’s XM has been able to deliver digital quality sound to all their customers no matter where they may be. Listeners are not able to pick up local stations using satellite radio services, but they have access to hundreds of stations offering a variety of music genres.

The key components of the satellite radio system are satellites, ground repeaters and radio receivers. Satellite radio works a lot like satellite TV -- you purchase a receiver and pay a monthly subscription fee for a certain number of channels. Receivers have been modified to fit every person’s needs or wants. XM has also made many beneficial marketing moves, such as merging their products into new vehicles. “XM landed a $250 million deal with a consortium led by General Motors. GM's halo effect on XM spurred other deals with carmakers. Today, XM is available in more than 100 new car models.” (Breen, 2005)

3. At what stage of the product life cycle is satellite radio? How is the rate of adoption affecting the product's progression through the life cycle?

XM satellite radio is in the growth stage of the product life cycle. It has been on the market for several years now and has continued to evolve and see increased profits. “Even though XM and Sirius have had some financial trouble, satellite radio still has a fairly strong fan base. About 8 million people subscribe to XM Radio, and more than 6 million people tune into