XM IN MARKETING PACT WITH DirecTV

Radio Service Hopes to Lure 'Satellite-Friendly' Customers

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CHICAGO (AdAge.com) -- XM Satellite Radio Holdings and DirecTV -- an investor in the satellite radio company -- are launching a joint marketing initiative in an effort to boost XM's subscriber base by leveraging DirecTV's existing customers.

"These are customers who are already satellite-friendly. They are already enjoying the benefits that DirecTV offers them," including programming preferences and digital-sound quality, XM's senior vice president of sales and marketing, Stephen Cook, told AdAge.com. "We offer a lot of those same benefits, only in a radio context."

Although Mr. Cook would not disclose the details of the co-marketing effort, direct mail and special offers are likely.

Targeted marketing
Capitalizing

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on DirecTV's consumer base, which Mr. Cook referred to as "low-hanging fruit," represents XM's first major step toward targeted marketing, following the mass-media-focused, awareness-building effort of the past several months.

Omnicom Group's TBWA/Chiat/Day, Playa del Rey, Calif., handles general advertising.

"Now is the time that we start implementing some of our more targeted programs," Mr. Cook said. "The DirecTV customer is one of those early target groups because they're satellite-technology customers already. It's an access point to get to early customers."

XM, which launched nationwide last fall, had 30,000 subscribers last month and anticipates 350,000 subscribers by the end of this year.

Rival set to launch
Rival Sirius Satellite Radio is launching its service in limited markets Feb. 14, backed by an integrated marketing effort through Interpublic Group of Cos.' McCann-Erickson Worldwide, New York.

Sirius and XM both broadcast 100 channels. Sirius' $12.95-a-month service offers 60 commercial-free music channels, while XM charges $9.99 a month for 71 music channels, but only 34 are without commercials.

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