3. Introduction
XM Satellite Radio, Inc.
By the end of 2003, XM expects to have
more than 1 million signed up with each
subscriber paying $9.99 per month after
purchasing a $300-500 receiver.
XM Satellite Radio, Inc. was founded in 1992, but didn’t hit the
airways until September 25th, 2001 with its first broadcast in San
Diego and Dallas / Ft. Worth.
.
XM runs programming on 100 different channels offering content from
that found in the mainstream to content targeted towards niche
segments like disco, comedy, and blues. .
4. XM has formed strategic partnerships with General Motors,
Sony, Clear Channel Communications, and Direct TV, trading
equity in exchange for the benefits they are able to provide to
XM Radio’s business model. XM will require 7-8 million
customers to reach breakeven on an operating cash flow basis,
which many forecast XM to achieve in 2005 or 2006.
5. WS
1. The receiver XM is about 400$ which is expensive.1. For only 56 days, XM has over 30,000 subscribers.
2. XM is compatible with all type of existing car radio.
3. A 100$ million advertising campaign . Included TV, radio,
magazines, News papers, direct mail, outdoor and online
advertising.
4. XM aired 71 music channels more than 30 of them are
commercial free. limited Ads. (2-4 min. per hour on some
music channels.
5. (7-9 minutes per hour on third party programming
channels like CNN.
6. About 35 channel are commercial free.
7. Most affordable than SIRIUS.
8. Reaction to XM service is range from very good to
fabulous. (Telephone survey)
9. Retailers are more excited about the market potential for
satellite radio than any other mobile electronic products.
10. Fees are less than SIRIUS by 3$/Month.
SWOT
TO
1. 9/11 terrorist attack.
2. SIRIUS has 60 music channels commercial free.
3. SIRIUS has strong relationships with retail, electronics
and automotives partners.
4. Completely original music programming.
5. AM and FM are free.
6. Satellite radio , cable radio and internet radio have a
large audience.
1. Very potential market.
2. Large sectors of customers spend more than 1 hr driving.
3. Rapid growth market.
6. United Sales In Thousand
2.83.4
7.88.6
30
0
5
10
15
20
25
30
35
SACD & DVD
Audio (2000)
TIVO (1993)CD Players
(1983)
DVD Players
(1997)
XM Satellite
Radio (2001)
Distribution of XM subscribers as of January 2002
7. XM Radio Customer Satisfaction of 100 Early Adopters (Dec.2001)
ExcellentGoodOkPoorVery PoorElement
94%5%1%Overall Rating of XM Service
92%7%1%Rating of SoundQuality
88%9%2%1%Rating of Signal Strength/Coverage
88%11%1%RatingThe Price/Value at 9.99$
XM satellite radio launch advertisements (Sept-Nov. 2001)
8. Very
Smooth
Good
Ok/Minor
Delays
InconvenientA Big HassleElement
82%2%11%3%2%Rating of the activation process
XM Has Far
Fewer
Commercials
XM Has
Fewer
Commercials
About
The Same
XM Has More
Commercials
XM Has
Many More
Commercials
Element
85%13%2%
Radio rating of the installation
process
No
Comparison/
XM Clearly
Better
XM
Better
The Same
AM/FM
Better
AM/FM
Much
Better
Element
93%6%1%Rating of XM compared to regular radio
Very
Smooth
Good
Minor
Problems
Many
Problems
Terrible
Problems
Element
86%4%8%2%Radio rating of the installation process
9. Differentiation
Strategy
Targeting
The target market segment we will serve is:
• Adults from 18th to 50th.
• Truck drivers and RV owners.
• Commuters driving more than 90 minutes
per day.
• Business traveler who spend much of their
time in the car. Like a real state sales
agent.
• Workplace listeners. Includes places needs
non stop music such as outlets and
restaurants.
• Residents of undeserved rural areas.
These target group spend an extraordinary
amount of time listening to radio, especially
in the car.
12. Product
K EY F E AT U R E SSatellite
XM receiver
Customer
13. • XM radio is a brand new way to listen to radio.
• XM radio is a service.
• XM radio includes 100 channels.
o 71 music channels (more than 30 of them are commercial-free).
o 29 are news, sports, talk, children's, and comedy channels.
o The amount of time used for commercial ranged from 2-4 min. / hr for
music channels and 7-9 min/hr for news, talks and sports channels. The
amount used to partially fill the gap in third party programming that were
left specially for advertising. XM filled the remaining gap with the
announcement of internal programming and news.
• The sound quality and signal strength are very good.
• The installation and activation process are very smooth.
15. • The target market will be North America.
• Use local and national retail stores as
distributions channels. Chains like Best Buys
and Circuit City have a large no. of stores
nationwide.
Place
XM Satellite• Strategic partner for
manufacturing and
distribution channels such
as:
Partner with manufacturing
of aftermarket car radios such
as Sony, Pioneer and Alpine.
Partner with OEM companies
(original equipment
manufacturer) such as Delphi
Delco in order to include XM
receiver as factory installed in
new vehicles.
16. • 100$ million advertising campaign.
• The campaign included TV, radio, magazines,
newspaper, direct mail, outdoor and online
advertising.
• The agency TBWA/Chiat/Day created the
campaign: X_M radio the power of X. the
campaign branded XM as the ultimate radio
experience and used a series of artists-BB King,
Snopy Dog and David Bowei.
Promotion
XM Satellite
• The campaigns have two
main goals
To educate the customers,
how to use and how XM is
differ from regular AM and
FM radio.
To differentiate XM from
SIRIUS.
17. LOGO
Price
Future Of Radio
• Price of the receiver is about 400$.
• Price of subscription for basic package is about 9.99$/m.
• Price of subscription for the premium package is about
12$/m.
19. LOGO
Conclusion
• XM Radio is adding value to customers who spend
much time in their cars and customers in rural area that
lake from variety of entertainment.
• XM Radio is differentiated from regularly AM and FM
radio because it has 30 music channel commercial free
and the rest is limited Ads.
• XM Radio is differentiated from SIRIUS because it is
more affordable. And lower pricing structure.
