I have always been a big fan of XM Satellite Radio’s business plan. They vow to put out quality, diverse and entertaining programming while remaining cost effective in an extremely costly business. They refuse to get into bidding wars with their competitor, Sirius over attracting talent. Sirius has a business plan too. Bring in so many high profile celebrities and sports, that when you finally cave for satellite you’ll have to lean Sirius way on star power alone (see my previous posts). That plan has finally began to take notice, as Sirius out performed XM in the 4th quarter last year in listener subscriptions, for their first win over XM. XM announced at the end of last week, they signed Oprah Winfrey to a 3-year $55 million to launch her own channel, "Oprah and Friends." Oprah has dominated television for decades and has entered the film, Broadway, periodicals, and book circles in her career: why not radio?
My guess, this move will be a massive success. XM’s strategy is to grab the early adapters first with great programming. Sports fans next with every baseball game ever played on their airwaves. Lastly, attract the women with a concentration in lifestyle programming. Considering what Stern cost Sirius in dollars alone, if Oprah attracts 325,000 extra subscribers her contract will pay for itself. Look for Oprah to dominate yet another market. Everything this woman touches turns to gold.