WorldSpace Seeks Partners to Bring Satellite Radio to Europe

Michael Hedges June 23, 2005

Satellite radio pioneer WorldSpace wants to launch a European subscription radio service in 2007.

WorldSpace France general manager Pierre Casadebaig, quoted this week in Le Figaro (June 17), said the project, called Viatis, needs partners “at the European level but also in each country.” Clearly in the planning stage, no details were even hinted.

SES-Global, the ASTRA satellite people, made a similar suggestion last February.

Conventional wisdom among broadcasters has long questioned the prospect of subscription radio – anywhere. Why, they asked, would people pay for something already available for free? Satellite TV was different because, well, it’s television and the satellite offerings increased available channels. Radio by satellite would not be very interesting, just repackaging the same music, they said.

That wisdom was tossed into history’s dustbin when XM Radio and Sirius Satellite Radio collected US subscribers by the hundreds of thousands for channels in the dozens. Both companies are light-years from profit but investor and subscriber interest is moving at warp speed. XM Radio reported a half million new subscribers in the first quarter this year, for a total of 3.77 million. Sirius lags in subscriber base but extending the “strategic partnership” with Ford Motor Company is expected to add a million more.

To Boldly Go...

A decade ago WorldSpace founder Noah Samara raised about $800 million to develop receiver and transmission technologies and launch three satellites. The company was an early investor in US satellite broadcaster XM Radio, which uses technology developed by WorldSpace. It sold its XM Radio shares in 1999 to American Mobile.

Two satellites were launched, AfriStar and AsiaStar, with the third, planned to cover Latin America, put on hold. AfriStar covers Africa, the Middle East and Western Europe and AsiaStar’s footprint covers India and surrounding countries.

WorldSpace filed paperwork in April in the US for an initial public offering (IPO) for $100 million, to be managed by UBS Securities.

Attracting Europeans to satellite radio could be a challenge, even for the most experienced and financially able providers. A rudimentary form of pan-European radio – the pirates – were popular in the 1960’s, long before the deluge of new national, regional and local channels and stations over the next four decades. Other pan-European radio channels have been planned, mostly for appeal to large advertisers and long distance drivers. None have materialized. RTL Group has hinted at a re-launch of Radio Luxembourg using DRM technology to reach a broad geography with near-CD quality music. But the trend in Europe is in the other direction: to specialized and localized channels, often using DAB technology. And, too, there’s the language issue.

A glimpse of what satellite providers might find in Europe comes from the ruling last week from the Canadian Radio-Television and Telecommunications Commission (CRTC). Approving applications for Canadian joint ventures with both Sirius and XM Radio, essential to market the services in Canada, the CRTC imposed Canadian content rules on 10% of the channels offered and, on those,  25% French-language content would be required. Both Sirius and XM Radio accepted the conditions.

When any venture – particularly media – starts to have that pan-European orientation, the European Commission waves one directive or another. With media it is the soon to be revised Television Without Frontiers (TWF) directive. Radio has escaped these rules, so far, as a purely local medium. If the Commissioners get hooked on satellite radio, for Bulgarian football, Howard Stern or anything else, that might change.