Advertising on XM Satellite Radio
According to The Wall Street Journal, four channels that XM receives from traditional radio's Clear Channel
The article pointed out that before the ads start running on those stations, XM will add four additional commercial-free music stations, so it can still claim to be the "leader" in commercial-free music, with the number of music stations that eschew ads to stay static at 69. Both XM and Sirius include advertising on some of their stations, such as talk radio and local weather and traffic; Sirius has 68 ad-free music stations.
There's little question that XM and its rival Sirius
My biggest question upon first hearing this news was why XM has a deal through which Clear Channel provides it with content in the first place. Why join up with one of the very dinosaurs you're ostensibly hoping to fossilize? The outcome of the arbitration between the companies may represent only four channels' worth of content, but it certainly brought to mind an attack from within.
Flash back to the late '90s, when a handful of companies, including DirecTV
One of XM's major marketing points may be slightly handicapped by this development, although the truth is, the lion's share of its musical lineup can still boast the "commercial-free" element. However, should the amount of advertising increase across satellite radio stations in the future, it will negate one of the medium's greatest selling points and increase emphasis on quality programming. For now, it's still business as usual, but of course, the talking points of this development are interesting for satellite watchers to contemplate.
For more on the industry, tune in to the following Foolish articles:
XM Satellite Radio is a Motley Fool Rule Breakers recommendation. To find out what other stocks David Gardner and his band of growth-oriented analysts have recommended to subscribers, take a free 30-day trial by clicking here.
Alyce Lomax does not own shares of any of the companies mentioned. She bought a new car in November, and she hasn't turned on the radio once -- she uses her iPod for all her car music needs.
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