Launching XM Satellite Radio
Charting the future of public relations
Holmes Report
CEO

Launching XM Satellite Radio

Named Fortune Magazine’s Product of the Year, XM Satellite Radio promises to do for radio what cable television and DIRECTV did for television by providing 100 revolutionary new channels of original radio programming.

Paul Holmes

Named Fortune Magazine’s Product of the Year, XM Satellite Radio promises to do for radio what cable television and DIRECTV did for television by providing 100 revolutionary new channels of original radio programming spanning the music, news and entertainment spectrum: classical, Spanish language, dance, country, blues, reggae, among many others.
 
PainePR and senior consultant Melissa Andrews were hired by XM to launch and roll out the first-ever satellite radio service nationwide during the third and fourth quarters of 2001. Beginning the planning process in May, the public relations team mapped out a plan to maximize the quantity and the quality of the publicity generated.
 
XM strove to be first to market, and achieving that, the PR team drove home the historic nature and advantage of launching the nation’s first-ever satellite radio service.
 
After months of meticulous planning, XM’s $1 million launch—with simultaneous events in three major cities—was scheduled for Wednesday, September 12. These events were cancelled in the wake of the events of September 11, and the unprecedented nature of the tragedy left the PR team in uncharted territory, with no roadmap or precedent to follow. Nevertheless, through a combination of sensitivity, agility, and precise operational ability, the team rallied and pulled off one of the most successful consumer product launches ever.
 
Major challenges included: launching a nationwide entertainment product shortly after September 11; canceling major launch events, celebratory and fun in tone, and then responding to the U.S. government’s call to “return to the nation’s business” by completely re-constituting them within two weeks; revamping plans for a national strategy of splashy mega-events to a regional strategy of a city-by-city tour of 60 markets, planned within three weeks; and adjusting to the fact that XM’s national advertising campaign was sharply curtailed in the wake of September 11, so that the successful launch of the company would be even more dependent on public relations and press outreach activities.
 
Additional challenges included the fact that XM is both a new technology medium and a wholly new entertainment service, presenting a tremendous learning curve for consumers and the media.
 
As in any start-up environment, other factors to contend with included product availability, technical developments, shifting resources, and continually changing priorities. A weakening economy, with a lessening demand for discretionary services such as entertainment, presented additional challenges.
 
Beginning in May 2001, team members conducted full immersion meetings with XM department heads from throughout the company, including programming, technology, marketing, sales and the Web site. Meetings with critical XM vendors included a download from the research and strategy team at Chiat\Day advertising to share and review consumer and market research data to develop relevant public relations plans and messages.
 
For every major program element, the team conducted informal media audits to review strategy, timing and messaging with relevant media, and the PR team tested our messaging informally with consumers in our relevant target audiences.
 
Senior consultant Melissa Andrews and a PainePR senior vice president worked on-site in XM headquarters for several months. Strategies were developed and fine-tuned for each of the company’s major milestones, including the launch of consumer advertising, announcement of roll-out strategy, lead-market launches in two initial markets, a national “flip-the-switch” moment when XM debuted its broadcast of 100 channels of programming, and continued market-by-market roll-outs of the Southwest, Southeast and North with a culmination celebration with simultaneous events in New York and Seattle.
 
This exhaustive planning process yielded the following objectives:

·    Make XM synonymous with satellite radio.

·    Be first and capture first-mover advantage and leadership positioning in the category.

·    Sell radios and subscriptions.

·    Promote XM as both a personal technology product and an entertainment/news service.
 
One of our greatest planning challenges followed the September 11 attacks. With the million-dollar launch scheduled for September 12, the team not only cancelled the planned activities, but also conceived and produced an entirely new and different launch event in 13 days, including a fully revised strategy, message platform and approach to reflect the new media climate. The team conducted primary research of media recovery times in the wake of other crises to get a semblance of an idea as to when to move forward with the launch, but recognized that this was an unprecedented situation with enormous emotional impact. When the PR team also recognized that our major national launch plans were not appropriate, the PR team quickly changed focus to a grassroots approach; exacting a 60-market local event tour in a few weeks.
 
The strategy was to reach as many consumers as possible through media relations and publicity. Because the technology story is so complex, the PR team knew the PR team would need to work with the consumer media prior to roll out and provide background materials and educational interviews. Tactics included:

·    Capitalize on the launch of XM’s consumer advertising to introduce XM to major consumer and news media; initiate early contact with top reporters to educate and hook them on the XM story.

·    Launch the XM service nationally in September with an XM headquarters event to officially turn on the first XM broadcast in the nation.

·    Link the historic XM service launch event in September with two lead launch markets via satellite with news events in Dallas and San Diego.

·    Schedule media outreach and resulting coverage by market and by week, through rolling out service regionally with local press events in 60 major markets, starting in the Southwest, then the Southeast, concluding with cities in the North and two finale events in New York and Seattle to maximize the media concentration.
 
With a full internal briefing on how to approach the media in the current climate, internal media relations pros and special event managers were put to work. XM was at the most critical juncture in its corporate history, yet the PR team recognized the importance of meeting frequently as a team to assess media feedback to strike the right balance in the ever-changing media environment. From an event management perspective, the PR team coordinated more than 60 press events, including full-scale press conferences in New York at the Museum of Television and Radio and at B.B. King’s Blues Restaurant; at XM’s Washington, DC headquarters; in Seattle at the Experience Music Project as well as press conferences and demonstration days in hotels, arenas and locales convenient to the media in each of the 60 markets.
 
To maximize the media results for each of our launch strategies, the PR team thoroughly researched our media list, arming our pitch team with recent and relevant articles/transcripts written or produced by the media representatives they were pitching. As a result, the appropriate reporters were targeted and were appreciative that our pitch efforts were relevant. Throughout this campaign, PainePR maintained an ongoing news bureau for trend stories, general national media relations, holiday 2001 gift guides, a media product review program and more.
 
XM was named “Product of the Year” by Fortune magazine; a Time magazine “Invention of the Year,” won the “Best of What’s New” Grand Award by Popular Science in the electronics category; “Best of CES” in 2001 in the mobile category and, in the current issue of leading automotive industry magazine AMI AutoWorld magazine was named as a “Best Option for the Car.”
 
XM secured nearly 28,000 subscribers by the end of 2001, beating most analyst predictions. XM stock price doubled during the period of the communications campaign. Initial sales data revealed that more than 50 percent of sales were driven by public relations efforts (the remainder were driven by advertising and the website.)
 
Thus, PR claimed a resounding victory; and XM executives, following these results, increased their spending and focus on PR. Without the use of a VNR or a matte release, XM’s public relations campaign from May-December 2001 generated more than 470 print placements, 511 broadcast placements, 25 wire stories and literally countless online media placements. In 2001, the PR team reached 175 million consumers (reported audience numbers, not impressions) with an estimated advertising equivalency of more than $2.5 million.

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