XM Radio 1999 Annual Report Download - page 13

COAST
-TO - Local advertising dominates radio. In fact, only 20% of radio advertising
is national, compared to 70% in the television industry. In the absence of a
national radio platform, advertisers patch together media buys market-by-
market. This is especially difficult since there are more than 98 million
listeners outside the 50 largest U.S. markets.
National Narrowcasting
Through its coast-to-coast coverage and targeted programming, XM will
aggregate a national audience around formats not broad enough to attract
sufficient local advertisers to today’s mass-market radio. Our research and
independent studies estimate there are up to 49 million potential satellite
radio subscribers. XM’s niche programming strategy will allow advertisers to
target this market with laser-sharp accuracy, achieving the ability to
narrowcast to specific audiences on a national mass-market scale.
XM will program an average of only six minutes of commercials an hour on
selected XM channels. Thus our premier national advertisers will not have to
fight through the traditional clutter of terrestrial radio advertising.
Premier Advertisers
As testament to XM’s national advertising appeal, we have attracted a
prestigious roster of 18 charter advertisers a full year in advance of service
launch. This preeminent lineup includes AT&T, Allstate Insurance, Discovery
Networks, Grey Advertising, J. Walter Thompson, Ogilvy & Mather, and Saatchi
& Saatchi’s Zenith Media. Premiere Networks, one of the nation’s top three
radio networks, will act as XM’s ad sales organization, marketing our unique
platform to its loyal list of national advertisers.
Premier Co-Branding Partners
XM will aggressively co-brand and cross-market our service to accelerate
national subscriber uptake. Under a long-term strategic marketing alliance,
XM kiosks will be displayed at select concert venues managed by SFX
Entertainment, the world’s largest promoter, producer and venue operator for
live entertainment events. Through this innovative marketing partnership, XM
can reach an audience of 60 million fans who annually attend SFX’s 120
venues located in 31 of the top 50 markets. And our innovative agreement
with LiveTV, the leading supplier of programming to commercial airlines, will
expose millions of airline passengers to XM programming and stimulate
subscriber uptake on the ground.
We have also established a marketing agreement with NASCAR – the name in
auto racing – which will give XM a brand presence at events reaching more
than 11 million people live and a TV audience of 252 million each year.
11 1999 ANNUAL REPORT
NEED
XM’s unique selection
of programming
and ability to
provide national,
targeted advertising
opportunities is an
advertiser’s dream.
It also provides XM
with another valuable
revenue stream.