Radio AM to FM - June 25, 1999

Radio AM to FM: June 25, 1999

Subscription Radio Coming Soon

Two satellite radio service companies preparing to offer a service similar to satellite or cable television have made separate agreements to have subscription audio equipment in automobiles as soon as 2001.

XM Satellite Radio, one of two major digital satellite broadcast companies, made an agreement earlier this month with General Motors Corporation to have GM distribute XM-capable receivers in its cars and trucks beginning sometime in 2001. XM hopes to have its service in operation by late that year.

Now word comes that CD Radio, the other major digital satellite broadcast company, has struck a deal with one of GM's competitors -- Ford -- to have Ford offer CD Radio-capable receivers by the first quarter of 2001. By that time CD Radio hopes to be in operation with 100 channels of music, news and talk for $9.95 per month, roughly the same as XM.

"Our objective is to have every car already on the road and every car coming off an assembly line capable of receiving the CD Radio signal," CD Radio Chairman David Margolese told industry newspaper Radio and Records. "With this agreement, Ford and CD Radio usher in a new era of commercial-free music and innovative news, talk and entertainment radio programming for motorists across the United States."

Will the deals with GM and Ford -- as well as potential future deals with other automakers and car radio manufacturers -- cause a "Beta vs. VHS" problem, with some consumers getting stuck with a system that is useless if CD Radio or XM goes belly up?

No. At least eventually. In their agreements with the FCC, both XM and CD Radio are required to design and market receivers that are accessible to both systems. The first generation of Ford units may not be capable of so-called "interopability," but later ones most certainly will.

These systems could put a damper into commercial broadcast radio, since the major companies that now control most of the major AM and FM stations across the country have gone to great lengths to cut budgets, fire personalities and essentially put cookie-cutter dull formats in every market. Their short-term financial gains may all collapse if XM and CD Radio are successful. Only time will tell, of course (and personally I don't think it will happen). If it does, I'm going to laugh at Jacor, CBS/Infinity/Westinghouse and all the rest, however.

Ch-Ch-Changes

KLAC (570 AM) just can't get it's afternoon show right. First Johnny Magnus is hired for the slot, only to be pushed out by Gary Thompson. Now word comes that Thompson has been fired as of last weekend.

Note to KLAC: Los Angeles doesn't like revolving personalities. Get with the program, please.

Changes II

KOST (103.5 FM) has lost the only program director it has had since it dropped Beautiful Music for soft rock almost 17 years ago, as Jhani Kaye steps down to take on a corporate position with KOST owner Cox Broadcasting. No replacement was named by press time.

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