Positioning Paper: XM Radio

Essay by Hokie95University, Master'sA+, March 2006

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1. Product Information


Satellite radio is a new emerging industry with just a pair of competitors, and XM Satellite Radio has established itself as the 800-pound gorilla of this fledging market. Fully 4 of 5 listeners subscribe to XM making it the most-listened satellite radio service with over two million paid subscribers in the U.S. today.

Features, Advantages, and Benefits

One of the primary benefits of satellite radio is that if there are one or two channels that an individual enjoys, they can have it anywhere across the country in CD quality sound. In many cases, this alone justifies the cost of equipment and subscription fees. To allow subscribers to turn in from coast to coast, XM employs the two most powerful satellites in the entertainment industry (XMRadio.com), appropriately named "Rock" and "Roll."

Subscribers can tune in to a single station in CD-quality sound anywhere in the U.S. XM boasts 68 commercial-free music channels, as well as dedicated sports radio (e.g.

ESPN, FOX, NASCAR), talk, news, and entertainment (e.g. CNN, S-SPAN, ABC, CNBC), and offers instant traffic and weather channels in major metropolitan areas - all channels are broadcast in CD quality sound. Listening to XM radio does not necessarily limit you to your vehicle either, computer and home stereo conversion kits are available, as well as portable "boom boxes". Subscribers are charged $9.99 per month, but family discounts and long-term subscriptions lower the price by 10-25%. Satellite radio enjoys a nearly non-existent learning curve as individuals treat the product as they would any standard car radio.

2. Product Positioning

Current Strategy

XM Satellite Radio positions itself as the best choice for coast-to-coast CD-quality sound through superior listening choices, competitive pricing, and readily available equipment.

Introduced in October, 1998, XM (NasdaqNM: XMSR) radio topped one million subscribers last fall,