Satellite Radio's Big Year

Thirty-six floors above Rockefeller Center - or Times Square, depending on which side of the building you're gawking from - Jim Collins is giving a tour of Sirius Satellite Radio's Manhattan headquarters. The VP of corporate communications points out a bunch of empty cardboard equipment boxes propped up against a glassed-in control room. "You would never have seen these here two years ago," he says - almost giddily - of the clutter. "When you walked down the halls then, it was like a ghost town. Now there are people and stuff everywhere. We're taking up more space."

So what happened to Sirius? Well, the "H" bomb hit, for one thing - "H" as in "Howard," "Howard" as in "Stern." When the self-proclaimed King of All Media announced in October 2004 that he would move his throne from the terrestrial-bound Infinity Radio network to Sirius in the sky (which he did on January 9), satellite radio became truly legit.

"There was electricity," Jay Clark, Sirius's executive VP of programming, tells me. Before Stern signed on, "It was hard talking big names into coming over here. They were afraid. But as soon as Howard hit, I got resumés from 95% of the most important people in the business. Last year was the turning point, not just for us but also for our competitor."

That competitor being, of course, XM Radio. In fact, XM's star talk-jocks Opie & Anthony (who beat Stern to orbit by 15 months) are feeling the same rush. Since starting at XM, "We've just seen a huge growth," says Gregg "Opie" Hughes, who, with partner Anthony Cumia, also used to be syndicated nationally on Infinity. "Our e-mail has just exploded, and the phone lines are jam-packed all morning. And when we do [remote] gigs now, so many more people show up."

Just hype-blab from a couple of professional talkers? Nope. Media experts are broadcasting the same message: satellite radio hit the right frequency last year. "2005 was the first year that content became king," says Forrester Research analyst Ted Schadler. Also, "Satellite went beyond the traditional radio model of 'You listen when they play it.' Now, with new devices, you can pause, store, and go back later." Maybe that's why subscriptions to both services skyrocketed in '05: from about 3 to 6 million for XM and from 1 to 3.3 million for Sirius. And maybe that's why, after subscribing to XM, rocker Bob Dylan finally "got" the lure of satellite (lots of good, eclectic music with no commercials) and gave in to years of XM's wooing. He was expected to start broadcasting his own weekly music/talk show in March.

And in other XM news: The service also planned to begin broadcasting some channels in 5.1-channel surround sound in March - a radio first - plus, its programming is now available on DirecTV, Jet Blue, AirTran, and AOL. Sirius, meanwhile, has landed Martha Stewart, who gets a channel on which she'll marinate an exclusive radio show, a simulcast of her daytime TV show, and daily segments hosted by her editors - all of which can now be streamed by Sprint wireless customers.