In their battle to gain listeners from over-air radio stations, satellite radio providers Sirius and XM have often highlighted their "commercial free" music channels. Back in 2004, XM joined Sirius in banishing advertisements from music channels, though both still air in-house promos that many listeners may consider to be similar content.
After touting "100% commercial free music", XM is going to have to change that.
Billboard Radio Monitor confirms a report that's been floating around the message boards and blogosphere the past few days...that its loss of arbitration with Clear Channel means the latter company can add commercials to four music stations it still programs - "MIX", "Sunny", "Nashville" and "KISS". (If you can't tell the formats by the obvious Clear Channel-owned names, you haven't been listening to radio enough!)
XM is adding additional commercial-free music channels of its own, in an attempt to balance out the four newly-commercial laden channels.
Clear Channel used to own about 20 percent of the satcaster, until it sold its stake in XM a couple of years or so ago. The arbitration relates to the loss of income Clear Channel saw from its own channels being made commercial free.
Though it's not confirmed in the Billboard report, as we reported earlier, OMW still believes that the arbitration settlement was responsible for the recent addition to XM of another Clear Channel-programmed channel, the simulcast of Cincinnati news/talker WLW/700 (XM 173). The addition of four more channels is also apparently responsible for a dive in audio quality on many XM channels, including most news/talk/sports stations (ironically, not including WLW, which did not appear to be affected).
To the OMW ears, the audio quality on those channels has improved somewhat since a low point last week, though there is still a rather noticeable "S" sound, as if there was a gap in the tooth of the person speaking. But if satellite radio is going to continue to try to compete against AM and FM, it CAN'T sound WORSE than over-air radio...which XM did much of late last week.
And some conspiracy minded folks note that Clear Channel apparently did not opt for a financial buyout/settlement, and insisted on the commercials on the four channels it runs on XM. They note that it would appear Clear Channel more likely wanted to undercut XM's "commercial free" position, though it could be just as likely that Clear Channel thought it could make more money by selling the spots...