Wired has a profile on Lee Abrams and XM Satellite radio:
Seven years ago, Lee Abrams found himself in exile. He invented a music format called album-oriented rock, or AOR, which in the 1970s shifted the music industry’s focus from singles to albums and showed radio execs how to hold listeners and attract advertisers - to make money in the new, boundary-free world of FM.
Then, in 1997, the federal government authorized two licenses for nationwide satellite radio broadcasting. A headhunter called Abrams to ask if he knew anyone interested in the top programming job at one of the new companies. “Sure I do,” Abrams said. “You’re talking to him.”
Today XM looks like a winner. It reached 1 million subscribers faster than any other consumer electronic service, and in the second quarter of 2004 it added 418,000 subscribers. “They’re going to make it,” says Steve Mather, an analyst who covers sat radio for investment firm Sander Morris Harris. “That’s becoming a given.”
The company has deep-pocketed investors like General Motors and, in a shrewd bit of bet-hedging, Clear Channel. It snapped up NPR’s Edwards after he was rather shabbily ousted as host of Morning Edition and grabbed New York’s Opie and Anthony - fired from WNEW in August 2002 for a stunt involving sex in St. Patrick’s Cathedral - for a drive-time show.
Some of the early criticisms have fallen away as well. XM now has entire channels of traffic and weather programming in more than 20 markets, using the same datastreams as local news radio.
With 23.2 million people subscribing to satellite television in the US and 87.1 million more paying for cable, ponying up for radio doesn’t seem so preposterous anymore. “Digital compression changed the rules of TV, and now it’s changing radio,” says Michael Gold, a senior analyst with SRI Consulting/Business Intelligence. “If people don’t like fragmentation, tough luck.”
Terrestrial radio is getting the message. Entercom, the fourth-biggest US radio conglomerate, recently began running a series of “man on the street” ads criticizing satellite for the cost, bad signal quality, and foul language.
In July, Clear Channel announced it would limit the number of commercials its more than 1,200 stations could play per hour. (Following the lead of its satellite competitor Sirius, all of XM’s music channels are ad-free.)
