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Luxembourg/Paris (pte022/27.01.2005/11:45) - The world's largest satellite operator SES Global http://www.ses-global.com has revealed plans to establish a subscription radio network across Europe. As the Media Guardian http://www.mediaguardian.co.uk reports, it is understood that Alcatel http://www.alcatel.com , the French telecoms company, has discussed forming a satellite radio venture with the Luxembourg-based group. Subscription radio is already immensely popular in the US, where 4.4 million customers pay from around 9.99 dollars (7.64 euros) a month to receive more than 100 radio stations via satellite.
Romain Bausch, the chief executive of SES, is said to have made satellite radio one of the group's main objectives for this year as it seeks new uses for technology that can deliver a broadcast signal into every home in Europe. Although SES does not want to be involved in programming, it will accept a joint venture. Alcatel already has a business relationship with SES and is an investor in WorldSpace, a satellite radio project that broadcasts in Africa and Asia, but has been unable to penetrate the European market. As talks are at such an early stage, no decision has been reached on whether to go ahead with the project.
Subscription radio has been so successful in the US that technology firms, investors and media groups are looking at replicating the business model in Europe. New York-based Sirius recently signed up to infamous radio DJ Howard Stern and has 1.2 million subscribers, while rival broadcaster XM boasts 3.2 million customers. Both Sirius and XM have attracted customers by offering more than 100 channels of advertising-free radio, which is broadcast by satellite into special receivers. Satellite radio is particularly useful in the US, as there is one common language for a broad geographic area and many local stations have a 40-mile radius, meaning radio listeners have to keep retuning in to the new channel.
According to Tim Schoonmaker, founder of Emap's radio business, although the launch of satellite radio in Europe is inevitable, there are lessons to be learnt from the US market, where competition between Sirius and XM has driven up costs for both companies. "Its so inevitable that satellite radio will now be given a long, hard look in Europe," he said. "It offers challenges, but has the benefit of learning from successes and mistakes in the States, not least the problem of two competitors who drive up content and marketing costs. Clever technology people will keep inventing new and better handsets and satellite kits. Someone will launch in the next five years, they'll combine audio with video, and FM broadcasts will lose share," he added. Both SES and Alcatel declined to comment on the group's specific plans.
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