XM Plans Joint Promos with DirecTV

Author:
Publish date:
Updated on

XM Satellite Radio Holdings Inc. announced a joint marketing agreement
Wednesday with DirecTV Inc. to help drive subscriber growth for the new national
music service.

The move comes in part from DirecTV parent Hughes Electronics Corp.'s
relationship with XM as an investor with a 10 percent stake in the company.

XM executive vice president of sales and marketing Steve Cook said DirecTV's
direct-broadcast satellite customers are a fertile target for satellite radio
because they already appreciate the benefits of satellite-delivered
entertainment, including digital quality, a national reach and a wide variety of
available programming.

'It seemed like a natural for us to want to talk to DirecTV's satellite
customers,' Cook added.

Although the companies have not yet ironed out specific details of the joint
promotion, Cook said he expects the offer to be communicated to DirecTV
subscribers through direct mail and on-air messages sometime within the next
several months.

'We expect to have an ongoing relationship with DirecTV,' Cook added.

He said XM has not yet had discussions with EchoStar Communications Corp.
about targeting its DBS customers, and it would wait and see how the proposed
merger between EchoStar and Hughes plays out.

Since its national consumer launch in November, XM has advertised its service
using traditional media, including television, radio and print ads, Cook
said.

XM also provides co-op advertising support to national retailers such as
Circuit City Stores Inc. and Best Buy Co. Inc.

Cook did not disclose the company's marketing budget.

In guidance to Wall Street, XM has projected that it will have at least
350,000 subscribers by the end of this year.

Competitor Sirius Satellite Radio is scheduled to launch its consumer service
in four markets Thursday (Feb. 14): Houston, Phoenix, Denver and Jackson,
Miss.

Sirius plans to offer service nationally by the third quarter.

Cook was not concerned that Sirius would slow XM's subscriber growth.

'We think this category is plenty big enough for two players,' he said. 'It
will actually help the category to have two companies promoting satellite
radio.'

For its market launch, Sirius will be aided by a number of former Thomson
Multimedia executives who helped to launch the RCA brand of DirecTV equipment at
retail in 1994.

'The irony is that although Sirius has recently hired people from RCA,
they're not actually the DirecTV people,' Cook said. 'We're actually working
with the DirecTV people.'

Both XM and Sirius recently joined the Satellite Broadcasting &
Communications Association, the SBCA announced last week.

Related