What explains the rapid growth of satellite radio? Barely four years after the first signals bleeped down from orbit, some 8 million subscribers have signed up with Sirius Satellite Radio (SIRI ) and XM Satellite Radio, (XMSR ) the twin stars of digital broadcasting. That's a faster adoption rate than any prior major new consumer technology -- from VCRs to MP3 players -- over a similar period.
The increasing availability of satellite-ready radios in most new vehicles has sped up the rush. Plus, as the units have shrunk in size and price, they've escaped from the car. Although they're still works in progress, even handheld versions -- such as the XM2go line and the recently-launched Sirius S50 -- are hitting store shelves.
These handhelds make satellite radio more accessible and give you greater opportunity to listen to it. When a favorite song comes on, you can hit a button and the radio will record the full track. The $300 XM2go portable, introduced last spring, stores up to five hours of audio. The newer Sirius S50, at $360, receives satellite signals only while docked, but it can hold up to 50 hours of audio which you can play back any time.
Of course, the real attraction of satellite is the programming, not the gear. On that front, XM and Sirius (both $12.95 a month) continue to one-up each other and to do what their earth-bound rivals can't. Recently, the two have focused on locking up pro sports leagues and famous on-air personalities. In the past year, Sirius has signed up Martha Stewart and, most famously, shock jock Howard Stern. XM countered with Ellen DeGeneres and Tyra Banks, among others.
In the coming year the rivalry is likely to shift to niche interests such as artists with fanatical followings, says Craig Moffet, an analyst at Sanford C. Bernstein & Co. Already fans of Frank can enjoy a Sinatra-infused channel on XM. At Sirius, Parrotheads can tune into Jimmy Buffett-themed Margaritaville programming 24 hours a day. Bruce Springsteen's E Street Radio starts a three-month gig on Nov. 1.
Services are multiplying for motorists, too. XM was first to deliver real-time data to in-dashboard GPS mapping. By merging traffic and weather with road maps, these systems let drivers see congestion in advance and steer clear of jams. Sirius is not only following with similar data services but also aims to be first out with "video to the backseat" in 2006. For an as-yet undisclosed premium, the service promises to pipe cartoons and music videos to rear-seat displays. Mom and Dad, meanwhile, can keep tapping along to Jimmy Buffett in the front.
By Adam Aston