Satellite radio to launch in US

Listeners will need a new radio receiver to get the service

Satellite radio is to start broadcasting in the US on Wednesday, backed by major car manufacturers.

A Washington-based service, XM Satellite Radio, funded by General Motors, will be the first in the country.

It promises 100 channels of digital radio ranging from modern jazz to comedy to 24-hour news for a monthly subscription fee of $9.99 (£6.90).

There hasn't been any real change in radio for 40 years, since the advent of FM

Windy Kramer, Sirius Satellite Radio

Listeners to the service will also require a satellite radio receiver which will cost $200 (£138) or more.

The main target for the service is car drivers. XM Radio will be built into some new Cadillacs as well as cars made by Saab, Honda, Isuzu and Acura.

A rival service is being prepared by a consortium backed by Daimler-Chrysler and Ford.

Sirius Satellite Radio, based in New York, will launch later this year and offer 100 radio channels for $12.95 per month.

It will offer a broad range of music as well as a children's service, Radio Disney.

XM Radio says that it will be available nationwide by November and that consumers will be able to hear a clear signal anywhere in the United States.

But some conventional radio broadcasters have questioned the viability of the new services.

"Satellite eliminates localisation, which I really believe is radio's greatest strength - being able to go out on the street and say, 'I really like your show'," said Andy Lockridge, of the Hispanic Broadcasting Corporation in Dallas.

"There's a bond that's created there that's going to be a real issue for any kind of national programming," he said.

Investment

XM Satellite Radio is backed by General Motors

Both services have required substantial investment - some $1.5bn (around £1bn) in each case.

But Sirius spokeswoman Windy Kramer said she was confident that consumers would pay for the service.

"If you look at television years ago, people were pretty happy with four or five or six channels until their neighbour got cable with 50-60 channels," she said.

"Then they realise there's something so much better - we think the satellite radio story is akin to that. Television is the king in the home; radio is the king in the car.

"There hasn't been any real change in radio for 40 years, since the advent of FM - what has been lost in radio is the 'wow' factor."