(5 of 5)
All this suggests that the satellite guys have a narrowing window of opportunity to build their brands and sign customers before a free-for-all breaks out for the consumer radio buck. While consumers are now locked into choosing Sirius or XM when they buy satellite tuners, that will eventually end with radios that can pick up either company's signal (a regulatory requirement). The recent tit-for-tat content deals and fights over automakers could be just a warm-up to price wars that could whack everyone's bottom line. "The test will be whether XM and Sirius keep their covenant with the consumer that music shall be commercial-free," says analyst Westerfield. As subscriber growth slows, it's only a matter of time, he predicts, before corporate sponsorships creep in, followed by the occasional promo. "We will not have commercials" on music channels, promises Karmazin. More than anyone, he knows that's what helped kill the party before the satellite guys came to town. --With reporting by Melissa August/Washington