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Case 3: The Battle In Sat Radio

Case 3: The Battle in Radio Broadcasting: XM vs. Sirius vs. Local Radio vs. Internet Radio.

I. Statement of the Problem

- Declining profit returns of XM and Sirius Satellite Radio Stations.
- Declining no. of subscriber.

II. Objective

- To produce attractive profit return on invested capital.
- To attract people to continuously subscribe and patronize radio stations.

III. Strategic Elements

- Many radio stations were investing in equipment to begin broadcasting high definition digital radio programs.
- Expanding the range of music played on the air, improving ad copy and experimenting with new formats in order to provide more entertaining listening and better complete with satellite radio.

XM Satellite Radio Station

- XM radio employed a subscription based business model.
- Program offerings:

? 5 commercial music channels
? 37 news/ talk/ commentary channels
? 38 sports channel
? 21 instant traffic and weather channels
- XM offered an online service through an arrangement with AOl and had partnered with NAPSTER to provide online music purchase and playlist management capability.
- Building awareness through appealing features of its satellite radio service.
- Advertising and promotional activities via television, radio, print and internet.

? In-store promotional campaigns, including displays located in electronics, music and other retail stores, rental car agencies, and automobile dealerships.
? Incentive programs for retailers.
? Jointly funded local advertising campaigns with retailers.

- Sponsoring racing events, Major League Baseball and building an exclusive relationship with General Motors, Honda, and Starbucks.
- Free 3-months or 6-months trial subscription to the purchasers of new vehicles equipped with a factory installed XM receiver.
- XM produces radio equipments.
- The company expanded its product line in 2006.
- XM had collaborated with Sirius Satellite radio to develop a common receiver platform for...