By LORNE MANLY
Just a blink after the newly emergent titans of radio -- Clear Channel Communications, Infinity Broadcasting and the like -- were being accused of scrubbing diversity from radio and drowning listeners in wall-to-wall commercials, the new medium of satellite radio is fast emerging as an alternative. And broadcasters are fighting back.
The announcement on Friday by XM Satellite Radio -- the bigger of the two satellite radio companies -- that it added more than 540,000 subscribers from January through March pushed the industry's customer total past five million after fewer than three and a half years of operation. Analysts call that remarkable growth for companies charging more than $100 annually for a product that has been free for 80 years.
Total subscribers at XM and its competitor, Sirius Satellite Radio, will probably surpass eight million by the end of year, making satellite radio one of the fastest-growing technologies ever -- faster, for example, than cellphones.
To keep that growth soaring, XM and Sirius are furiously signing up carmakers to offer satellite radio as a factory-installed option and are paying tens of millions of dollars for exclusive programming. On Sunday, XM began offering every locally broadcast regular-season and playoff Major League Baseball game to a national audience, having acquired the rights in a deal that could be worth up to $650 million over 11 years. And Howard Stern is getting $500 million over five years to leave Infinity and join Sirius next January. Each company offers 120 or more channels of music, news, sports and talk.
Though satellite radio is still an unprofitable blip in the radio universe, it is pushing commercial radio to change its sound. Broadcasters are cutting commercials, adding hundreds of songs to once-rigid playlists, introducing new formats and beefing up their Internet offerings. A long-awaited move to digital radio could give existing stations as many as five signals each, with which they could introduce their own subscription services -- but with a local flavor that satellite is hard pressed to match.