Sirius outshines XM in marketing push by Barbara Shecter

Two satellite radio providers are hoping to make their mark in the pre-Christmas season in an attempt to become the dominant player in this new retail category in Canada.

Sirius Canada, which broadcasts 100 channels of CD-quality radio, including sports and talk stations featuring the likes of Martha Stewart, launched on Dec. 1 and is running a multi-million dollar television and newspaper campaign.

Backed by the CBC and Standard Broadcasting Corp., whose conventional radio stations include The Mix and EZRock, Sirius is also heavily promoting its service in the flyers of such retailers as Future Shop and Best Buy, where its radios are sold.

A concert planned for last night in Toronto, featuring Canadian artists including Ron Sexsmith and the Trews, was to be broadcast nationally over the Sirius network, with guest hosts from the band Sloan.

Ken Wong, a professor of marketing and business strategy at Queen's School of Business in Kingston, said this week's barrage by Sirius has made a bigger impact than a month of advertising by rival service XM Canada, which is offered by Canadian Satellite Radio Inc. and was launched on Nov. 22.

"If you were to ask people on the street, 'What do you think of satellite radio,' Sirius is the one they're going to talk about," he said.

"This is a business where being [seen as] the first mover is absolutely essential. Whoever gets out of the blocks faster can deliver market share."

XM Canada began their marketing push in October, with major billboard exposure in Toronto, Vancouver, Montreal and Ottawa, tie-ins to Donald Trump's The Apprentice in the United States, and newspaper inserts, said Colin Bettam, senior executive vice-president of marketing and sales.

There was also a "bag-stuffer," combining coupons for KFC restaurants with information about XM's satellite radio service.

John Bitove, a major investor in XM Canada, is chief executive of Canada's largest KFC operator.

XM opted not to buy television time after weighing the costs and the expected benefits.

"I don't believe it's the right medium to launch a product during the holiday season," Mr. Bettam said. "People are out; they're shopping like mad; they're going to Christmas parties."

But he said the decision was not based on a strategy of keeping marketing costs low.

"We're spending millions of dollars to make millions of impressions."

Still, Mr. Wong said XM's advertising has not been as visible as Sirius -- and that could cost XM because he expects only one dominant player to emerge.

"Market share is always important. But in this case, it's crucial," he said, likening the satellite radio launch to a battle between satellite television competitors Bell ExpressVu and Star Choice a decade ago.

ExpressVu led from the beginning, and with nearly 1.7 million subscribers, it has about twice as many as Shaw Communications Inc.'s Star Choice, according to Decima research.

"Star Choice can stand on its head, but [it won't] catch up" with ExpressVu, Mr. Wong said.

Over the years, there has been industry speculation that the two satellite TV services will ultimately be combined.

In the United States, XM expects to have six million subscribers by the end of the year, while Sirius expects to have about half that.

Mark Redmond, president of Sirius Canada, said he is not worried about the gap in the United States affecting the launch of Sirius in Canada. The primary reason is that XM had an 18-month lead when it launched in the United States, he said.

"We are the fastest-growing satellite radio service in the U.S., [and] they don't have an 18-month head start on us up here."

A year ago, Canadians knew little about satellite radio, according to Decima research, something executives were mindful of when they planned the marketing push this year.

In November, 2004, Decima found more than half of Canadian adults were not aware of the concept of satellite radio, and only one in five had heard it would be offered in Canada.

Being perceived as the strongest player at launch will give one service the advantage of being the one against which others must stack up, marketing experts say.

A senior manager at a Toronto-based media buyer said the marketing push appears linked to the holiday season -- when retailers such as Future Shop are looking for new products to push.

"They've been popular," said Pam Saunders, a spokeswoman for Future Shop and Best Buy. "We are running low in some selected models."

VYING SERVICES FACE OFf

SIRIUS CANADA

   PARTNERSHIP CBC/Radio-Canada, Standard Radio Inc., SIRIUS Satellite Radio
(U.S.).

   NUMBER OF CHANNELS 100.

   PROGRAMMING 60 commercial-free music; 40 news, sports and entertainment; 10
Canadian music and information stations in both English and French.

   BIG DRAWS 30 NHL games weekly, Martha Stewart Living Radio, MAXIM Radio, CBC,
BBC, Bloomberg Radio, ESPN Radio.

   EQUIPMENT/PRICES SIRIUS ONE: Receiver with built-in wireless FM transmitter,
$79.99; SIRIUS STARMATE: Receiver with wireless remote control, $99.99; SIRIUS
Sportster Replay: Replays 44 minutes of content, $199.99.

   MONTHLY SUBSCRIPTION $14.99; $7.99 for up to three additional receivers.

XM CANADA

   PARTNERSHIP XM Satellite Radio Holdings Inc. (U.S.), Canadian Satellite Radio
Inc.

   NUMBER OF CHANNELS 85.

   PROGRAMMING 61 commercial music; 24 news, sports and entertainment; eight
Canadian music and information stations, four English, four French.

   BIG DRAWS 1,000 NHL games per season, and exclusive NHL license in 2007-2008,
BBC World, CNBC, CNN, FOX News, Snoop Dogg's Classic Hip-Hop, Home Ice (hockey
greats talk station).

   EQUIPMENT/PRICES RoadyXT: Cassette tape-size receiver with car kit, $79.99;
XM2go: Portable receiver with car adapter and home kit, five hours recordable
playback, $399.99.

   MONTHLY SUBSCRIPTION $12.99; $9.99 for up to four additional receivers.

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