Media: Making Waves

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Unless you're familiar with New York City's burlesque scene, you may not know about the Glamazons, a troupe of plus-size female dancers who like to camp it up around town. A few weeks ago, however, a handful of Glamazons were featured on a live national radio show, guests of a gay-and-lesbian duo named Derek and Romaine who were celebrating their second anniversary on the air. With a bartender mixing martinis in the studio, the scene was suggestive of radio's party days, before Big Radio ate the AM/FM dial, demanded quarterly profit growth and sucked the fun right out of the control booth. Except that a wannabe big corporate entity was footing the bill for the show, broadcast from a gleaming new studio in a Rockefeller Center skyscraper. And the Glamazons were tame compared with the time Romaine invited a male porn star into the studio for a little on-air fun, and curtains had to be drawn--this for a radio show. "If listeners find it interesting, that's great," said Romaine. "But really the whole show is about us."

Welcome to Sirius Satellite Radio, a company running edgy programming and sparing no expense in its quest to breathe life into radio--and one day turn a profit for shareholders. Based in New York City and run by pugnacious radio-industry veteran and media icon Mel Karmazin, Sirius broadcasts 65 channels of commercial-free music, sliced and diced in formats from Broadway-show tunes to '80s hair bands, along with channels dedicated to sports, news, weather and niche shows like Derek and Romaine's, which would be fined into extinction if the FCC had its way. This being satellite radio, whose subscribers pay a $12.95 monthly fee, the content cops have no say in what's beamed down from Sirius' three satellites. And Sirius is taking full advantage of its outlier status to serve up fare you would never hear over the AM/FM dial, from frat-boy channels like Maxim Radio to hip-hop so crude it might make Eminem blush.

Sirius and its bigger satellite competitor XM are death stars to the broadcast-radio industry. Since 1996 companies such as Clear Channel and Infinity (part of Viacom) have taken advantage of deregulation to buy hundreds of stations with the idea of bringing scale--and higher ad prices--to the airwaves. For a while it worked, as industry revenues rose at a double-digit clip during the late '90s ad boom and stations racked up profits thanks to cost cutting. But for listeners, that consolidation brought homogeneity, as corporate playlists suffocated local jocks, and ever more ads were jammed into each hour.

No wonder that in the past year satellite radio, which like cable TV was once laughed at--pay radio? C'mon--reached critical mass. Sirius' audience surged from 351,600 listeners to more than 1.4 million; XM added 540,000 subscribers in the first quarter of this year to reach an audience of 3.8 million. Reasons: better programming choices; lots of programming choices. In other words: game on. Advances in technology mean that every listener is up for grabs. Broadcasters have to contend not only with satellite operators like Sirius but also with cell-phone makers and service providers, iPods and even Internet amateurs who can find audiences for the oddest musical tastes. Broadcast radio's answer: fighting back with its own digital strategy.