Interviews at The Entrepreneur Center @NVTC

Bisnow: What continues to make the job exciting?
I can meet with an investment banker, an executive of a car company, I can talk to Roger Ailes of Fox, but when the artists, Quincy Jones, The Allman Brothers, Carole King, and others, come in, that’s when I go home and say, “Well, guess who I met today?”

Can you believe XM and Hugh Panero are recognized by the public?
I’m actually never recognized. The company has a very high profile, but I keep a low profile.

What milestone are you setting for the company?
Well, obviously I have my short term and long term goals. The short term goal is to get to 6 million subscribers by the end of the year.

Long term?
We want to establish ourselves as a major media brand and technology company. We’re a content company at heart. I think we made that mark, and are recognized for it. We really want to be what MTV was 10 or 15 years ago.

Do you think you are changing the way people look at radio?
Well, if you start with the premise that nobody would ever pay for radio, we clearly have debunked that notion. Our growth rate attests to how people are absorbing this and it’s changing their lifestyle, particularly in their car. People are actually listening to terrestrial radio less because XM radio is moving forward. There’s always need for local information, local news, and local traffic, but we’re returning radio to its roots, which was passionate about music, not delivering large-audience advertisers.

How has Washington been a good place for XM?
I think Washington is a great place to live, it’s one of the top 10 media markets in the country. Clearly, it’s not about where you are but what you do that counts. It’s very cost-effective in the area that we chose to situate our headquarters, here on New York and Florida avenues, as part of the area’s re-development.

What are Washington’s listening habits?
I can tell you that they love music, but they also love their news, and we have a very active subscriber base in this region by virtue of the fact that we’re headquartered here.

You made an early decision to get in tight with the District. Is it still as amicable as it seemed?
It’s terrific! Mayor Williams is enormously supportive, as is the city council in our development. They knew that we were taking a huge risk. This area is one of the hottest areas in the city right now, and we got in on the ground floor. We’re a big part of the community here and actually a lot of our neighbors in this community say, “you’re the best thing that has ever happened to this neighborhood.”

How do you feel about changing the face of a city by your presence?
I feel great. It has been a theme that I’ve had personally, and I know has been supported by the management team. Companies talk about giving back to communities. We had an opportunity to situate here in DC rather than going out to some green field site around Dulles or some other environment, where you could be in the open spaces. The District at the time was recovering from economic problems and they needed a boost. I think that it worked out great for the city, and by us being located here, as a kind of innovative new company, we actually got a much higher profile.

Do you think that among the problems Sirius may have had was the fact that it moved to New York and it didn’t stay in Washington?
No, their problems were more macro-oriented. A lot of companies that have a heritage in their business by virtue of getting licenses from the FCC or having to be near the regulatory agencies, make a decision after they’ve acquired the license to stay or go. The CEO there decided to move to Rockefeller Plaza because he had an ego that maybe needed that. Their problems were just execution on the technology, which we were able to leap forward on, even though they were at the time supposed to launch a year ahead of us and were better financed.

How do you evaluate your success?
I think we see it driving the streets and looking on top of cars. We just see a lot of XM radios, portable radios that people wear on their belts, and boom-boxes at home. You can see this wave of enthusiasm. We also look at radio listening trends and find our customers listening in very large segments of time to XM and less for terrestrial radio. I think we have pierced the veil of what radio claims to be. It’s controlled by two or three large conglomerate radio groups. They say that they’re local, but they’re really not. Except for certain people and certain shows, they transport in DJs to do shows in many different markets.

What has the growth of XM been like for you?
It is overwhelming when you have a very popular product like XM, catching up with the excitement of the product, and making sure that you have an infrastructure to support the volume of new activations. Good problems by the way.

Did you know this would work?
I always had an instinct about it. I grew up in the cable TV industry where people said nobody would pay for television, and then people got cable TV. I have found that people’s connection to music is deeper because it really transports us back in time.

How do you feel when you realize that suddenly 5 million people are listening to you?
I think about the first customer that I ever encountered. I was driving home and saw a car that had an XM radio antenna. So I pulled up along side and got his attention. I said “what is on your car?” and he said “it’s XM satellite radio.” I said to him, “I’m the President and CEO and I want to thank you for being a subscriber.” The guy got so excited he put his foot on the gas and went into the intersection. I actually thought I had just killed the first subscriber. I drove home to my wife, and I said to her, “I met this guy, our first subscriber, I almost killed him,” and I was really excited about it, which is odd. And my wife says, “First of all, it’s strange that you’re so excited about the fact that you almost killed your first subscriber, and since we moved here to launch this business, and to take on this entrepreneurial challenge, if you can actually congratulate and greet every subscriber that you have, I don’t think there’s much of a future here.”