Satellite radio is a type of digital broadcast that transmits audio signals to specialized receivers, which are installed in automobiles and home stereos. It relies on satellites to distribute its signal across a continent, and it uses ground-based repeaters in urban areas where buildings and other signals may block the signal.
The idea behind satellite radio first emerged in 1992, when the Federal Communications Commission set aside a spectrum for nationwide distribution of digital radio through satellite. The two companies that eventually became Sirius and XM bid huge sums to acquire the rights to use the new frequency. Once they owned the rights, both companies began selling special receivers and charging listeners a monthly subscription fee to access a range of content over multiple channels.
To make their satellite-transmitted broadcasts available, Sirius and XM need to store an enormous amount of music in digital format. They also have studios where musicians play live and record material, which is then transmitted to the satellite. The satellites then retransmit the signal to radio receivers, which decode the information and play it.
A cornucopia of entertainment programming awaits satellite radio listeners, from niche music channels (such as the Beatles channel) to comedy programming (like NPR’s Wait, Wait… Don’t Tell Me). Entertainment channels often appeal to specific target audiences, which makes them ideal for advertisers willing to pay top dollar.
In 2006, popular radio host Howard Stern moved from free broadcast radio to satellite radio. The move allowed him to maintain and grow a loyal audience that includes millions of people with similar interests who have the means to afford subscriptions. In addition to its variety of entertainment programming, satellite radio provides a clean, digital signal with no static interference and near CD-quality sound. It can also transmit text information such as stock quotes and sports scores alongside the audio broadcast.
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