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New technologies rattle radio world

Sirius is paying shock jock Howard Stern big money to move his morning show to the satellite station.







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NEW YORK (CNN) -- With 30 percent of airtime on U.S. radio taken up with commercials, getting stuck in rush hour traffic can be torturous, especially if you are trying to find some decent music to listen to.

A growing number of people are escaping commercial overload on the airwaves by subscribing to satellite radio.

Traditional radio uses high-powered towers to transmit signals, but satellite radio competitors XM and Sirius beam digital signals into space.

Greg Steele, Sirius senior programming director, told CNN that satellite radio could offer listeners a lot more than traditional radio -- without them having to listen to commercials.

"We've got 120-plus channels, 65 or 66 music channels. You can get everything -- from the kinds of music you hear on terrestrial radio and then some -- all without commercials."

Satellite radio is capable of offering more channels because its signal is able to carry much more information than traditional radio.

In place of revenue delivered by paid advertising time on the waves they sell monthly subscriptions to listeners.

For about $13 a month you get to choose from all sorts of genres -- from folk to kids' shows, to metal mania -- as dozens of studios, all transmit niche programming that you may not find on your traditional radio dial.

XM music director and on-air personality for the station's 70s Channel Sari Zalesin has helped revitalize radio using satellite.

"During the 70s, you could listen to music, and music was a part of your life. There were DJs who were introducing you to music that you never heard before, that's what XM is."

Satellite radio may have started out as a service for music enthusiasts, but XM and Sirius quickly realized there was a much bigger audience out there, according to Craig Moffett, cable and satellite analyst for research company Sanford Bernstein & Co.

"Americans have to spend time in their car, whether they like it or not, they're getting to work in the morning. And so, satellite radio has smartly said, 'That's the part of the day we want to absolutely own,'" he told CNN.

Both Sirius and XM have signed major deals with automakers which have made their radios standard features in cars.

Sirius needs to play catch up. As the younger of the two satellite stations, it has 1.8 million subscribers, while XM has 4.4 million.

Sirius is also hoping controversial shock jock Howard Stern will lure listeners -- the station is paying Stern about $100 million a year to move his morning commute show to Sirius.

With 17 million cars sold annually, analysts say there is room for both to thrive, but experts caution it is too early to count traditional radio out.

"Everyone said the 40s and 50s, when TV was started, that radio was dead. Surprise. There are far more radio stations on the air today than in the 40s and 50s, " Chris Sterling, editor of The Encyclopedia Of Radio told CNN.

"If there is anyone that knows how to compete in the media, it's the local radio station. That's the key word: local."

While some listeners may still crave local news, XM and Sirius feel they have the advantage of being able to attract musicians and sports figures from across the spectrum who feel the medium offers more choice and creativity.

Satellite radio is also looking beyond the car to deliver to listeners who want their music anytime, anywhere.

Chancellor Patterson, XM's vice president of corporate affairs, told CNN the station would look to MP3 players and cell phones in future.

XM recently announced that a Samsung MP3 player would be capable of broadcasting the station later in the year.

"There could be cell phones down the line that have XM inside. Think of any application where you are listening to content and XM will be a part of it," Patterson said.

All of this is having an impact on terrestrial radio. Now, a new low-commercial format called Jack FM is popping up on FM dials around the country.

That may help cut down on the commercials -- but it still lacks the variety that can be found in the radio signal from space.

CNN's Maggie Lake contributed to this report.

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