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Advertisements on XM Radio

How is this for building your business? Advertise that one of the chief benefits of your satellite radio service is that it is commercial free, and then have to add advertisments.

Unfortunately, that is the position that XM Radio finds itself in. While they are sitting on 6 milliion subscribers, a court judgement has forced them to allow Clear Channel Communications to play ads on the four stations they control. We can’t really blame XM Radio for this, they fought against it. Unfortunately, Clear Channel Communications invested in 1998 before XM went commercial free, so they won their case in arbitration.

XM Radio says they will add four more commercial free stations to make up for this. Problem is, they can longer claim that they are commercial free. Sirius can. And regardless of the reality of the number of commercial free channels, perception counts for more than anything else. As far as consumers are concerned, XM is now the satellite radio company that has ads. Too bad Clear Channel can’t see past the minimal commercial revenue they will get to see the larger picture. At the very least, they should have waited until XM Radio had built their customer base quite a bit more and had achieved profitability before they decided to do this.

Forbes

Posted by Jeff

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