XM Changes Program Structure, Faces New Indecency Standard Proposals

By Ian Rice
Arts and Lifestyle Editor


XM Satellite Radio (the nation's leading provider of satellite radio with more than 3.2 million subscribers) made an announcement last week that it is expanding its basic service package, in an effort to counter the fact that their monthly subscription price for said service will increase from $9.99 to $12.99 beginning April 2. To make the price jump an easier transition for current subscribers, XM is also offering existing customers the opportunity to keep the $9.99 monthly rate provided they sign-up for a one-year prepaid plan. More substantial discounts can be obtained by purchasing a two, three, four, or five-year prepaid plan with the provider. The price change will not affect XM's Family Plan, however, a package which permits XM subscribers to add up to four additional subscriptions for $6.99 a month per radio.

With the April 2 increase, XM's expanded basic service will include XM Radio Online, which offers more than 70 channels of XM music and talk programming via an Internet stream. Additionally, the High Voltage channel (202) will be taken out of “premium” status (which required an additional fee to access). The High Voltage channel is the home of talk radio duo Opie & Anthony, who will begin building the channel after the April 2 changeover. The duo’s plan, according to recent discussions on their program, is to add other shows that they feel fit into the format they are trying to create, a format billed by the company as “Extreme Talk.” Among the rumored additions to the High Voltage channel are Opie and Anthony’s terrestrial radio friends Ron and Fez, who broadcasted on WNEW-FM during the same period as Opie and Anthony. At present, Ron and Fez remain under contract with Infinity Broadcasting and host a daily show on Washington DC’s WJFK-FM in the evenings.


Since the national launch of XM Radio in November 2001, the satellite provider has dramatically expanded its channel lineup from 100 channels to 151 channels, converting most to a commercial-free format in the process. In addition, XM spent a great deal of capital to introduce 21 traffic & weather channels, 16 channels dedicated to Major League Baseball, nine college sports channels and XM Public Radio. The April 2 increase remains the only price change since the provider’s aforementioned debut.


Hugh Panero, XM President & CEO, noted last week that "XM's growth to date demonstrates that the potential for satellite radio is far greater than anyone anticipated. This new pricing approach will help fund future technology development, enable us to offer more attractively-priced radios and maintain our programming excellence. Together, these initiatives should result in XM exceeding its current target of 20 million customers by 2010. Most importantly, XM is instituting the pricing change in a way that adds value to the basic service and provides existing customers the opportunity to lock in the current lower monthly rate -- a unique opportunity rarely offered by subscription entertainment services, including satellite radio, satellite television and cable television."


The news of XM’s programming alterations comes on the heels of a government push to permit FCC regulations on both cable television and satellite radio. Senate Commerce Committee Chairman Ted Stevens said last week that he would “push for applying broadcast decency standards to cable television and subscription satellite TV and radio.” Previously, cable television and satellite radio providers were exempt from FCC regulations and indecency standards, as their services are only available to those who subscribe and regularly pay a monthly fee. Since the Janet Jackson Super Bowl debacle last year, however, the government is seeking to heighten the terms of their indecency standards.


"Cable is a much greater violator in the indecency area," Mr. Stevens told the National Association of Broadcasters, which represents most local television and radio affiliates. "I think we have the same power to deal with cable as over-the-air" broadcasters. Although Mr. Stevens did not directly address XM radio (or its competitor Sirius) in his initial statements, he did note that "there has to be some standard of decency.”


Mr. Stevens clarified his statements, later confirming that he would push legislation to apply the standards to cable TV and satellite radio and television providers. In fact, the issue could become a small part of a larger pending bill to substantially increase fines for broadcasters who violate indecency. If Mr. Stevens is successful, the broadcasting industry would be a whole new business.


It is uncertain at this point whether or not Mr. Stevens would have the support of the US Senate or of his fellow committee members. Last year, the Senate Commerce Committee narrowly defeated an amendment to a bill raising indecency fines that would have included cable and satellite services. Senator George Allen, a Commerce Committee member and Virginia Republican, told reporters he would be "hesitant to expand it to those" services.


Currently, the U.S. House of Representatives has approved legislation to raise fines to a dizzying $500,000 on television and radio broadcasters that violate indecency limits. As of right now, the fines only stand at $32,000 per violation. In addition, the Senate has legislation pending to increase fines as well. But neither bill has provisions within it that would extend indecency restrictions specifically to cable and satellite services and the White House (while admittedly in support of the House bill) has yet to make any public pronouncement in favor of the Senate measure.




Some information within this article was provided by CNN.com and FoundryMusic.com