Thanks to all the fine companies (including those listed below) who agreed to be part of our recent "RAIN Vendor Guide (Ver. 2.0)" issue. If you didn't have a chance to spend time with it yet, you can access the issue here.

BY PAUL MALONEY
The satellite radio industry is taking a beating -- a situation certainly not helped by the punishment the rest of the U.S. economy is enduring. New York-based Sirius Satellite Radio is seeing their stock prices continue to slide -- down to as low as $1.70 today, while Washington, DC-based XM Satellite Radio announced a wider net loss for the second quarter yesterday.

Sirius shares are down again for the fifth consecutive day. Reuters reports that this level is the lowest for the stock since December of 1994. The stock has lost more than 40 percent of its value since July 17, and over 78 percent so far this year.

On Monday, analyst Tim O'Neil criticized the stock, calling the selection and availability of Sirius-enabled radios "constrained." Further, he reduced his subscriber estimates 40 percent to 3,000 for the second quarter and 22 percent to 78,000 for the year. He estimated Sirius will lose a total of almost $600 million this year and next.

Sirius reported yesterday that Panasonic will introduce a series of Sirius satellite receiver products for distribution in September. The company also announced a deal with Monaco Coach for equipment in that company's recreational vehicles.

Meanwhile, XM shares are down as well, to as low as $3.50 shortly after the market opened today. That company's shares have lost more than 73 percent of their value this year. According to Reuters, over the period of Sirius's recent slump (through yesterday), XM shares have lost 23 percent of their value. (As of publication, XM shares had rebounded to about $3.80.)

XM yesterday announced a net second-quarter loss of $117.2 million (compared to a $38.5 million figure for last year), or $1.38 per share. Credit Suisse First Boston analyst Ty Carmichael today cut its rating on XM to "hold" from "buy."

XM CEO Hugh Panero maintains the company is still on track to hit the 200,000 subscriber mark by the end of the quarter, on the way to at least 350,000 by the end of the year. XM's most-recent subscriber count was 136,718, up 79 percent over the first quarter.

Also, new radios with a second-generation chipset, which XM says is smaller and can eliminate the need for a receiver separate from the radio, are slated to hit the market early in fall.



BY PAUL MALONEY
XM has announced it will "reshape" its channel lineup by adding channels for neo-soul, books and drama, folk music, easy listening and other formats.

New XM channel offerings will include: "Nashville!" (contemporary country hits), "The Village" (folk music), "The System" (electronica), and "The Flow" (R&B, jazz, hip-hop, and soul). Click the screenshot at right (or here) to see XM's complete lineup changes.

The satellite radio company has also forged an agreement with radio content company MediaBay to make that firm's classic radio programming "RadioClassics" an XM channel. The RadioClassics channel will feature "Golden Age" radio programming such as The Bob Hope Show, The Shadow, The Jack Benny Show, and Gunsmoke.

Available September 3 will be "adult entertainment" Playboy Radio, XM's first "premium" channel.

Several stations channels were dropped to make room for the changes. As reported in today's Nashville Tennessean (here), it was the heavy commercial load at Country WSIX-FM/Nashville that made it a candidate for deletion. ''It was a great station,'' XM programming chief Lee Abrams told the paper. ''It just stuck out like a sore thumb in our environment.'' Los Angeles CHR KIIS-FM is the only commercial broadcaster remaining (of four) that XM still carries.

From Wired: "From the beginning, the Internet had the whole free-form networking thing down. A packet of data could hop from one node to another all the way to its destination. Now a band of scrappy startups has figured out a way to mimic this model -- with mesh networks. The technology has the potential to bypass the telcos and saturate the nation in cheap wireless signals...

"The beauty of meshes? They're bottom-up networks that capitalize on the rise of Wi-Fi and other open wireless technologies. They shimmer into existence on their own, forming ad hoc out of whatever's in range -- phones, PCs, laptops, tablet computers, PDAs. Each device donates a little processing muscle and some memory. Packets jump from one user to the next -- finding the best path for the conditions at any given moment -- and finally skip to a high-bandwidth base station, which taps into the Internet.

"The result: big boosts to the range and speed of wireless signals. With the help of, say, 50 meshed PCs, PDAs, and phones, a typical Wi-Fi network with a 500-foot range can be transformed into one that extends 5 miles. In fact, the performance gains and cost savings are so great that these systems easily undercut today's wireless broadband service. A good telco plan typically costs $150 a month; a better mesh hookup will run about $45...

"Mesh could make the wireless Web sexy again. When MeshNetworks did field trials in Orlando, engineers clocked speeds of up to 6 Mbps, faster than a cable modem. To show off, they took visitors out on the highway for a little demo: a laptop receiving streaming video at 70 mph."

Read this entire article from Wired here.

...

... What's this have to do with anything? The final sentence says it all: "Streaming video at 70 mph." If users can have Internet access that's faster and cheaper than a cable modem in their cars...Internet radio will finally compete on an almost level playing field with terrestrial radio (in terms of portability and sound quality). We say "almost" because there will still be the equipment and access fee obstacles to entry (whereas nearly everyone has a radio, and the programming is free). Likewise, Internet radio on a wireless 6 Mbps connection will have no competitive disadvantage to satellite radio. -- PM ...

From a Wall Street Journal opinion piece by Holman W. Jenkins, Jr.: "About the smartest critique yet of AOL Time Warner's execution miscues was uttered by Steve Case, the company's chairman, who was quoted last week saying, 'During the Internet boom, we took our eye off the consumer a bit because we were focusing on commerce and advertising.'

"Yup. While it was clearly a good idea for AOL to help itself to some of the IPO money the dot-coms were spreading around, the big fish on the grill was supposed to be giving AOL a broadband strategy...

"The continuing problem of broadband is the failure of any party to dangle something in front of consumers to make it a 'must-have' service. Almost by definition that means something exclusive enough to irritate those who can't offer the same...

"So who's the man to save AOL now? The obvious candidate is the guy who's done it a dozen times before. Mr. Case just needs to get over his chairman's title and be willing to make a few people mad again. Here's how he should proceed:

"Put AOL and Roadrunner together to make AOL Roadrunner...

"Market the new service by offering unlimited downloads from the Warner Music library. Throw in content from all Time Inc. publications and make it available online as soon as it's edited...To quell fears of Napsterization, remind colleagues that the music industry was singularly vulnerable because the CD is such a crummy, costly way to deliver popular music.

"What's been missing from various broadband marketing efforts so far is a sense that, in Mr. Case's recent phrase, 'membership has its privileges.' Consumers are told to want broadband but they aren't told why they should want it."

Read Jenkins's entire column in the Wall Street Journal today, or online here (subscription required).