Case Studies / Clients » XM Satellite Radio

Situation:
Founded in October of 1999, XM Satellite Radio, Inc. is an emerging force in broadcasting. Its founding was prompted by a major technological change to create a third national broadcast medium, transmitted by satellite, to sit next to AM and FM on the dial. As one of only two companies with license for this new service, XM is building its business and committed to lead the market in this two-company race.

Due to the aggressive landscape approaching 4th quarter, 2004 against rival Sirius, who recently had committed hundreds of millions of dollars with the NFL, XM needed a high profile platform to launch a new product, a wearable device. This new product launch was expected to propel XM toward its break-even scheduled for early 2005 by increasing subscribers at a rate of over 250,000 per month. However, unlike its competitor, XM had little budget for this endeavor.

Outcome:
Team Marketing leveraged its relationships within the entertainment industry to engage one of the largest global superstars, Elton John. Understanding Elton’s needs which include assistance in promoting his music during his new album release launch period, Team successfully negotiated a relationship whereby XM would receive millions of dollars in rights for no rights fee from Elton in exchange for certain marketing benefits. Assets delivered to XM included:

* Use of Likeness and an active staring role in XM commercial never before done in the US

* Music Rights

* XM On-Air participation from Elton including an “Elton Station” for a weekend where Elton will be on hand live, and create custom content for broadcast

* In store cross marketing between XM and Best Buy, XM’s biggest retailer. Best Buy also will feature Elton John DVD as its big holiday promotion.

* Participation of David LaChapelle (typical fee $1 million) to direct the commercial

This innovative program that Team Marketing structured for XM revolutionized the existing model of music promotions and marketing. It enabled XM to break through the clutter on TV, gain considerable leverage within a key retail outlet and utilize their on-air platform to market sponsorship, which in turn supported the entire effort.

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