Sirius Expands Focus To Mobile Video Market

Sirius Satellite Radio [SIRI] was the second U.S. satellite radio to enter commercial service but it aims to be the first to add a video component to its existing slate of audio programming.

Company officials demonstrated the capability to transmit video during the Consumer Electronics Show (CES) in Las Vegas last week and expressed interest in developing commercial applications for the technology. The video is intended for use by passengers, not the vehicle’s driver, and might be especially useful for entertaining children in the back seat, said Larry Rebich, vice president of programming and market development at New York-based Sirius.

A survey conducted by Sirius to determine the interest of consumers in satellite radio and in-car video found that during the next two years, 13 percent of the respondents planned to subscribe to satellite radio and 12 percent wanted in-car video, Rebich said. Only customized vehicles currently carry either DirecTV Inc. or EchoStar Communications Corp. [DISH] satellite TV services, so the market for such mobile video remains largely untapped. Rebich said consumer interest in watching in-vehicle video “surprised” him.

Sirius officials reacted to the survey by initiating discussions about providing youth-oriented content in vehicles. Talks are ongoing with Toon Disney, the Cartoon Network and Nickelodeon, Rebich said.

The content also could include programming oriented for other market segments, including sports, movies, live television or adult entertainment. Rival XM Satellite Radio [XMSR] offers a Playboy Radio channel that requires subscribers to pay an additional $2.99 per month to hear frank discussion about sexual matters.

“We wouldn’t rule anything out,” Rebich said. Specific content decisions will be made by Sirius in the next 12 months as the technology and hardware are fine-tuned for the delivery of video by a system designed to provide digital audio.

At the CES show, Sirius broadcast video on an existing Kenwood receiver that up to now only had provided audio, Rebich said. However, the Kenwood model used a DVD player and a television receiver.

The technology exists to provide video “without harming” the sound quality of the bread-and-butter audio service, Rebich said. The size of the video screen could be as large as 8 or 9 inches but would depend on the application and the vehicle, he added.

A key for Sirius to differentiate its service is that all its music channels are commercial-free, said Mary Pat Ryan, executive vice president of marketing at Sirius. Rival XM Satellite Radio offers fewer commercial free channels but only charges $9.99 a month, compared to the monthly subscription fee of $12.95 for Sirius. -Paul Dykewicz