• by Paul Gough , November 7, 2003

The leader in subscription satellite radio Thursday said it is just getting started in developing the industry, predicting a big holiday season and at least 2.5 million subscribers by the end of 2004.

XM Satellite Radio Holdings recently announced it had logged its one-millionth subscriber in less than two years of operation, putting it well ahead of rival Sirius Satellite Radio, which got a late start in the industry. Although it's fighting perceptions that satellite radio might not be commercially feasible, XM executives said it had shattered two myths: 1) That no one would pay for radio; and 2) That any service that wasn't locally based wouldn't work.

There were more than 929,600 subscribers to the service as of Sept. 30, with 237,395 added between June and September. Revenues, which are mostly from subscriptions (though XM posted $963,000 in advertising sales for its mostly commercial-free service), were $26.9 million in the third quarter compared to $5.6 million during the same period last year. That compares to Sirius, which had only 149,000 subscribers at the end of the third quarter and $4.3 million in revenues.

Hugh Panero, president and chief executive officer of XM, said his company had achieved the one million mark faster than the adoption of other technologies in their day, including radio, cable and satellite TV and mp3 players. Panero said XM even reached the one million milestone ahead of digital video recorders, and said he was amused that TiVo had only reached one million subscribers on Tuesday with several more years of operation under its belt than XM.