XM Satellite Radio Holdings Inc.(NASDAQ:XMSR) and Sirius Satellite Radio Inc. (NASDAQ:SIRI) are
booming, even amid constant predictions of future doom for the industry. Will HD radio be able to pull those subscribers back to earth? Circuit City Stores, Inc. (NYSE:CC) hopes so, as the retailer will begin selling HD radios soon along with online retailer Crutchfield.com and RadioShack Corporation (NYSE:RSH).

Roughly 1,000 terrestrial radio stations are broadcasting in HD Radio already, but relatively few listeners can hear the signals. HD radio gives FM radio CD-like audio quality while giving AM radio FM-like quality.

I don't see how HD radio can lure back former listeners. Sure, there are fidelity enhancements. But all they'll hear is the same tired content, all plugged playlists and tons of ads.

But, the HD Digital Radio Alliance is hoping to change all that now that the country's second-largest consumer electronics retailer has become the first 'big box' retailer to put HD radio products on its shelves -- and just in time for the holiday season.

Will you continue to listen to terrestrial radio stations with the same content, even though it'll sound better than it ever has? Or, are you planning a move to satellite radio soon? I'd be interested to hear from XMSR and SIRI investors as well as consumers on this one.

Both Sirius Satellite Radio Inc. (NASDAQ:SIRI) and XM Satellite Radio Holdings Inc. (NASDAQ:XMSR) have been under close scrutiny as of late due to allegations that both satellite radio companies are setting land-based repeaters to higher-than-allowed power levels. With the FCC still looking at how to handle permanent radio spectrum agreements that allow both satellite radio companies to operate a land-based network in addition to their birds, both Sirius and XM Radio may have some tough times ahead.

Basically, both companies operate a land-based network to supplement holes in satellite coverage, which is common in dense areas with taller buildings and foliage that block the satellite signal from the sky overhead.

What's happened here: both satellite companies, which are using temporary means of land transmissions to repeat their actual satellite signals in areas where needed, are tuning these repeaters to power levels outside of the specification allowed by the FCC. In other words, they've hopped up the wattage in a way that is irking many traditional radio folk. Sirius has disclosed that it has 11 repeaters outside the spec, while XM Radio has unveiled that it has 221 repeaters operating outside the spec.

With the prospects for both satellite radio companies looking a little shaky right now, let's hope that subscribers don't start losing signals in those downtown skyscraper-plexes.

With XM Radio swimming in the wake of competitor Sirius' success with bringing Howard Stern into the satellite radio biz, XM is going after a little of its own star power. The satellite radio network signed TV and publishing personality Oprah Winfrey to the network back in February, and just announced the Oprah talk network to debut today -- September 26.

This is a rather shrewd move by XM that will cost a pretty penny, but there are surely legions of women nationwide who, like their male counterparts and Stern, will have XM radio always handy just to hear their favorite celebrity. It's a formula for success that has worked for Sirius so far, and Oprah has a following just as impressive, if not more. XM hopes it is more.

In a perfect naming convention, the talk channel "Oprah and Friends" will make its debut at 11:00am EST today after being announced as available just yesterday (the official announcement was in February). Nothing like waiting until the last minute and launching right after the announcement to capitalize on the buzz and the incessant need most Americans have for instant gratification.

While Stern notched a reported $500 million deal with Sirius, Oprah's deal is reportedly worth $55 million. In Stern's defense these days, it's hard to not count the amazing 3 million+ customers who have tuned into Sirius since the raw radio personality took to the airwaves last January.

So, in a little over eight months what has Howard Stern -- the King of all Media -- done for Sirius Satellite Radio? The famous shock jock moved from the public airwaves of CBS to the privately-owned and subscription-only Sirius Radio network in January of 2006, taking a $500 million multi-year contract with him for himself and the crew he operates with (Hi Robin!).

But let's pull out the measuring stick and see if Stern has been worth it, although a direct measurement can't really be made. After all, would newer Sirius subscribers have signed up for Sirius if Stern had not moved over? That is the question we can all speculate on, but nobody can definitively answer, although some marketing statisticians have tried.

Sirius has gained customers this year, no doubt about it. Even Mad Money's Jim Cramer calls SIRI stock a "buy" at $4. But there are rumors all over that the overall disappointing performance of Sirius and larger competitor XM Radio might force the two companies to make a deal and merge their networks. Cramer says this would spike SIRI shares to $10 or more. It very well could. Both companies are unprofitable so far (as expected, launching satellites is not cheap), and a merger could eliminate tons of financial redundancies and other factors.

Even as Stern has more than likely brought legions of his fans to the Sirius network in the last eight months, it will take more than the arguable most-popular show host on radio these days to rescue Sirius from mounds of debt and impatient institutional shareholders, who are ready to try and recoup some investment. It's true that it takes time to make a profit after launching satellites (at a cost of hundreds of millions) and facing huge costs up front.

Then you have to spend hundreds of millions of dollars on customer rebates to hit price points and marketing costs (like Stern) to drudge up a loyal fan base that will pony up $13 a month to help you pay all that debt off. That's apparently not happening fast enough, even with Stern's recruits onboard.

XM Radio continues to see technical issues with some of its most popular satellite radios, which has helped propagate a share tumble to near XMSR's 52-week low. The Roady XT and MyFi products have failed to pass tests from the FCC regarding the amount of noise these units pass out into the air when the FM transmitter feature is used. There are millions of these units in use today, and they are among XM's best-selling units because they can be used with any car radio or stereo system that has just an FM radio built-in. There is no need to hard wire them to any car stereo system at all, although the fidelity is lowered quite a bit.

The problem lies in the potential interference other FM users may experience when an XM customer with an XM radio using the FM transmitter feature gets close by. While this may seem like a low-end problem (it is in my view), there are no bones about it -- XM must correct this "defect" in these XM models before they can be sold again. With the holiday shopping season getting closer, this is a serious deal for XM, which needs to continue bolstering its subscriber numbers so that the company can become profitable sometime this decade (at the earliest).

An added issue is that XM may start taking existing XM radios with built-in FM transmitters off store shelves, denting sales even now. The speed at which XM responds to this crisis -- which it is for sales alone -- will be a good indication of the strength of its management team.

Brian White has worked in various executive positions in technology and telecommunications and now focuses on editing and writing.

Manufacturers of Sirius Radio (SIRI) receivers that previously had to stop production of several models because of signal emissions the violated FCC standards have resumed production of two models, the company said yesterday. The models were designed to allow users the capability to use receive FM radio as well as receiving the subscriber programming offered by Sirius. This brings over 90% of Sirius radio models back into production. XM has its own ongoing FCC concerns, noted below.

The news was met indifferently by investors and in late afternoon the stock is landing where it finished yesterday -- at $3.77 a share.
Michael Canfield is a private investor, a business and media writer, living in Seattle. He doesn't own stock in XM or Sirius.

Volvo announced plans to offer factory-installed Sirius Satellite (SIRI) radios on many of its models beginning with the 2007 model year, including all of the new S80 models. That'll run Volvo buyers around $295, including a 6-month subscription. Sirius' biggest challenge to growth is the massive head-start competitor XM (XMSR) has in pre-installed automaker offerings, including General Motors, Honda, Toyota, Hyundai, Nissan and Volkswagen/Audi.

Sirius has been adding new dealers as well, and soon consumers will have increased benefit of choice when seeking satellite music right off the dealer's lot.

In other satellite radio news: although XM Radio loses Nascar to Sirius in 2007, it maintains a valuable major-league baseball contract will broadcast the US Open.

Michael Canfield is a private investor, a business and media writer, living in Seattle. He doesn't own stock in XM or Sirius.

Forgive my ego all you blog readers, but yesterday's article on China should have raised some alarms and it did not. It just shows how complacent we Americans are. Blog readers were more interested in Google/MSFT & Sirius Radio.

Maybe it is old news.

Maybe it was Monday.

Maybe we have just accepted the loss.

Perhaps if I wrote that Google or Microsoft were buying GE or Nike that would have been more intriguing.

Only two comments...that is complacent!

Second chance: "Will China One Day Buy GE or Nike?"