CHICAGO, Nov. 12 (UPI) -- It's being sold as salvation for truckers and music lovers tired of straight-jacketed formats that make radio in every big city sound alike.
XM Satellite Radio's 100 channels of digitally clear radio reached Chicago on Monday, six weeks after the system's roll out in San Diego and Dallas Sept. 25.
"Remember when there were only AM and FM?" asked Hugh Panero, president and chief executive officer. "We intend to do on radio what cable and direct satellite broadcasting did for TV."
XM Satellite Radio began broadcasting its signal coast-to-coast from two Boeing satellites -- called "Rock" and "Roll" --- in geo-stationary orbit 22,000 miles over North America kicking off a 25-city, 25-day promotional tour.
The service costs $9.95 a month and the 100 channels of news, music and talk programming include 30 advertising-free music channels.
"We're giving programming back to DJs (disk jockeys), 'music animators' and a range of people you can't hear on regular radio," Panero said.
"Seventy percent of local radio uses just five formats."
Chicago has not had a 24-hour FM jazz station for more than a decade and industry consolidation, with large corporations owning hundreds and even thousands of stations, has produced formats like "smooth jazz" that are so homogenized you can't tell what city you are in.
Panero said satellite radio will complement old radio like cable TV does ABC, CBS, NBC and the rest of commercial television.
"What we do is radio," he said.
XM offers 24-hour jazz, blues and rock stations, country, bluegrass and progressive country, classical, opera and decades channels featuring music from the 40s through the 90s programmed at XM's high-tech 80-studio Washington, D.C., broadcast center, which resembles the bridge of the Starship Enterprise.
There are 12 news channels including Fox, CNN, CNBC, Bloomberg, CNet Radio, BBC World Service and C-SPAN and five sports channels, including ESPN Radio, Sporting News Radio and NASCAR Radio.
Music information on an LCD display of the receiver shows only the song title and artist playing, but Panero said in the future the system could alert listeners about breaking news, with announcers on music channels reading bulletins and telling people to tune in the news if they want more details.
The rival New York-based Sirus Satellite Radio is expected to begin broadcasting early next year but the systems are not compatible. Sirus plans to charge $12.95 a month for 100 channels, 60 of them commercial-free.
XM received a $66 million investment from Boeing Captial Services Corp. and Boeing Satellite Systems International Inc. in October and its backers also include General Motors, DirecTV, Honda, Clear Channel Communications and Madison Dearborn, a private investment firm.
Avis plans to offer XM Satellite radio in business rental cars and Freightliner, Peterbuilt and others will offer the units in big-rig trucks.
So how is reception?
A test showed the signal was remarkable clear in downtown Chicago, where tall buildings can play havoc with FM signals, thanks to 11 terrestrial "repeaters" on tall buildings blanketing the city.
"Literally you can drive for thousands for miles and never lose a station -- into Canada and Mexico, too, " said Stephen Cook, senior vice president sales and marketing. "Bridges are no problem." He said the signal could be lost inside tunnels longer than a half-mile, but since the system is digital the signal is perfect until it disappears.
The signal is static-free and crystal clear in the wide-open spaces of the desert Southwest.
"Truck drivers who are on the road to 10 hours a day say, 'Thank you so much,' for being able to keep in touch," he said.
Receivers by Pioneer, Sony, Alpine and Delco are available at places like Best Buy, Radio Shack, Tweeter, Sears, Crutchfield and Circuit City for between $200 and $300 and home units are in the works.
"Most radio is listened to in the car," said Panero. "We see the home as an important market but not as important as the car market."
There are two units that can turn a car radio/CD/Cassette player into an XM radio.
Sony introduced a "plug and play" docking station module last week for $299 and Pioneer has a universal receiver that connects to the stereo unit already in your car for $249. Some high-end receivers with all the bells and whistles can cost double that.
The antenna and installation add another $100.
General Motors offers XM radios in new Cadillac Seville and DeVille models and plans to offer them as options in more than 20 vehicles by 2003.
Panero estimates XM Satellite Radio will reach break-even with four million subscribers in three years and that the audio service will have 15 million to 16 million subscribers by 2006.
