Satellite Radio: Radio From the Sky

by Jerry Edgerton

You get your choice in music with no commercials. Is satellite radio worth the cost for you?

Traffic crawls during your morning commute. All you can find on the radio is top 40, hip-hop, conventional country, and classic rock. And you're not in the mood for any of them--especially since you get bombarded with commercials between songs. Worst of all, you've played your CD collection so much you're tired of it too. If you recognize yourself in that profile, think satellite radio.

Competitors XM Radio and Sirius Satellite Radio offer a different world. If you like bluegrass, big band, alternative rock, classical, reggae, or blues you can find a static-free, commercial-free channel devoted only to that specialty--more than 60 music channels for each service. Sirius even has an all-Elvis channel. Or if you like talk radio (with a few commercials, but nothing like AM talk radio), the variety is wide, too. For instance, XM has a talk channel focusing on African-American affairs. Raucous talker Howard Stern, in a much-ballyhooed move from broadcast radio, will join Sirius in 2006. Sports fans, too, get games and talk shows not available on regular radio.

"Satellite radio gives you more choice and a great alternative to over-the-air radio," says Phil Magney, president and principal analyst of Telematics Research Group--a Minnetonka, Minn., research firm that follows entertainment, navigation, and other electronic devices used in cars. Magney points out that recent availability of satellite radio receivers as options on many new cars has helped swift growth of the satellite product--to about five million subscribers for both companies combined in a little more than three years in operation.

But satellite radio is not for everyone. If you do not spend much time commuting in your car or otherwise driving long distances, satellite radio may not be worth the cost. The satellite signals--which should allow you to keep one channel even on a cross-country drive--are strongest in a car where an antenna on the roof or trunk almost always faces a clear path to the sky. You can get home receivers or portables that plug into your car or your home stereo, but Consumer Reports and other technology reviewers report that getting good home reception can be tricky, as the best antenna position may not be where you want the radio. If you are technologically handy, however, getting a home receiver or even the new small portables like the XM MyFi now coming on the market may seem attractive. Or, a satellite subscription for your car also lets you listen online--possibly a good home option.

Remember, the cost to get satellite radio, much like cell phones, includes both buying the equipment and a subscription cost for the service. Getting satellite equipment installed in a new car can be pricey. As options, satellite radios range from less than $200 in some models to nearly $2,000 for some luxury brands that sell satellite as part of an entertainment package. If you are installing satellite radio in your current car, most equipment choices range from $100 to $500 and professional installation from $40 to $100. So-called plug-and-play devices that fit either car or home stereos typically are $100 to $130 for the most popular models. In terms of your ongoing expenses, both services are similar.

Once you own the equipment, you pay $12.95 per month to Sirius or XM with no contract. Signing up for prepaid contracts of one, two, or more years gets you discounts of from 8% to 23% depending on the length. Start out month to month to make sure you like the service. Each company has its own equipment. Thus, to change, you would have to start over with new hardware. Depending on your interests, here's how to decide:

Pick the music

Choose your sport

Find special programming

Match your new car

The competing satellite radio companies have deals with separate auto companies. So if you are in the new car market, what car you buy will determine which satellite radio you can get. XM has deals with General Motors, Honda, Toyota, Nissan, and Volkswagen. Hyundai plans to make XM radio receivers standard equipment in all models starting in late 2006. (For models that have optional XM satellite radio, click here. Sirius has partnerships with all Ford Motor and DaimlerChrysler brands, plus BMW and Audi. (For models with Sirius options click here.

Once you spot an interesting vehicle with a satellite radio option, check out an automotive site such as Edmunds.com to see what it will cost you to choose that option. On the PT Cruiser, for instance, the Sirius option costs $195. But on the luxury Cadillac CTS, you must pay $1,850 for an options package that includes not just XM Radio equipment but navigation equipment, DVD player, and a six-CD changer.

While satellite radio offers some great programming, it isn't the only answer to avoiding radio commercials. Apple's iPod now offers a hookup to play your favorite tunes through your car radio. And analyst Phil Magney of Telematics Research says the day isn't far off when people may be able to get music through their cell phones. "Satellite radio is just one of the new ways that people buy, manage, and listen to their music," says Magney.

Jerry Edgerton is an automotive writer whose work has appeared in Money and other national magazines. He also is the author of the book "Car Shopping Made Easy."

July 18, 2005