Shant Shahinian was the perfect customer for satellite radio.
As vice president of his family's chain of men's clothing stores in Los Angeles, he had money. And the 29-year-old former Metallica fan spent hours each week listening to his car radio as he shuttled from store to store.
When Shahinian bought a new Escalade at Casa de Cadillac in Sherman Oaks, Calif., he heard a brief demonstration of XM Satellite Radio Holdings Inc.'s 100 channels of music, news and comedy. He was sold.
Thanks to early adopters such as Shahinian, XM and rival Sirius Satellite Radio Inc. have established a niche among affluent car buyers. But that is not enough; the two broadcasters must tap a mass market of budget-conscious car buyers.
To break even, each company must sign up at least 2 million subscribers, a sharp increase from their combined total of 380,000 as of Dec. 31. To survive and prosper, both broadcasters must make substantial progress this year.
They'll need an army of auto dealers to convince consumers that they should pay up to $325 for the hardware and $10 to $13 a month for a product - radio - that has always been free. While it's too early to say how it will shake out, three things seem clear: