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Satellite Radio Orbits For Profit

The dueling satellite radio companies need to rein in previous expectations, but they are still poised to create thriving new businesses that will challenge terrestrial radio, a new report suggests.

In a research paper titled “Satellite Radio: Get Outta My Dreams, Get Into My Car,” Webnoize Inc. estimates that 19.1 million Americans will subscribe to either the XM Satellite Radio or the Sirius Satellite Radio service by 2005, representing 9.3% of the adult population in the United States.

The study contradicts earlier estimates touted by the satellite radio industry. Various sources had predicted such lofty numbers as 42 million subscribers by 2005, 43 million by 2007 or 49 million by 2012. But report author Ric Dube said even the diminished numbers represent $2.3 billion in subscriber revenue – more than enough to ensure the success of both companies.

Sirius and XM each intend to provide 100 channels of satellite radio, mostly to American motorists who pay a $9.95 subscription fee.