Sirius" satellites have had circuitry problems since launch and if one of the satellites fails, users will experience daily service outages. With more repeaters and its second satellite always in a fixed position, XM will have fewer reception problems associated with satellite failure. XM must continue to improve the satellite radio technology because reception problems will destroy the reputation they have worked to build. With the advent of dual-signal receivers and low switching costs, there will be nothing stopping dissatisfied XM customers from changing their SAT radio service provider to Sirius.
What attracts people to satellite radio even more than nationwide coverage is the variety of programming choices available. Both XM and Sirius offer 100 highly-segmented, CD-quality radio channels. Unlike traditional radio, satellite can satisfy niche musical tastes because the listener base supporting the station is not confined to a single geographical area. For example, a single city may not be able support a Mandarin-Chinese station, but all the listeners in nationwide can. With 30% of recorded music sales coming from niche music buyers, satellite radio has the potential to fulfill the demands of a very large consumer segment. Because XM and Sirius offer similar formats and music genres, XM needs to differentiate themselves by focusing on their proprietary programs and exclusive partnerships with companies like C/NET and NASCAR. By stressing these unique programs and special features in marketing and advertisements, XM can differentiate themselves from Sirius, terrestrial radio, and other audio formats.
The main difference between XM and Sirius lies in subscription fees. For similar services, XM charges $9.95 per month while Sirius charges $12.95 and promises no commercials on music stations. XM limits commercials to six minutes per hour (down from 20 minutes that some terrestrial stations offer) and has 35 channels that are completely commercial free.
