In the high-stakes battle for the nation's burgeoning satellite-radio audience, luring the biggest name in television is akin to winning the Super Bowl.
That's the message Oprah Winfrey and XM Satellite Radio were sending yesterday, when they announced that she had signed a three-year, $55 million agreement to launch a new channel on XM called Oprah & Friends.
The centerpiece of the 24-hour channel, to begin airing in September, will be a taped, weekly half-hour show with Winfrey and her longtime friend, Gayle King, the editor of Winfrey's monthly magazine, as hosts. The rest of the programming will consist primarily of shows involving members of Winfrey's usual coterie of guests and advisers, including Bob Greene, Marianne Williamson, Robin Smith and Nate Berkus.
"It's going to be a huge hit," Winfrey predicted yesterday during a conference call with reporters. "If I wasn't me, I would tune in to hear that."
Winfrey's deal with XM is smaller by far than Howard Stern's five-year, $500 million-plus signing by XM's rival, Sirius.
Winfrey's agreement is also emblematic of the scramble for big names by both satellite radio services as they court new, paying customers.
XM had already signed up Bob Dylan, Snoop Dogg, Tom Petty, Quincy Jones and Ellen DeGeneres, while the Sirius roster includes Martha Stewart, Lance Armstrong, Jimmy Buffett, Steven Van Zandt and Eminem.
Sirius, with about 3 million subscribers, also inked a seven-year, $300 million deal to broadcast National Football League games. Not to be outdone, XM - with about twice the number of subscribers - signed an 11-year, $650 million deal to air Major League Baseball's regular season and playoff games.
"The strategy is to provide variety, and big names punctuate that," said Michael Harrison, publisher of Talkers magazine, a trade publication focused on talk radio and television shows.
Both XM and Sirius were courting Winfrey, according to Tom Taylor, editor-in-chief of Inside Radio, which tracks the industry.
"She's a superstar, and she brings attention wherever she goes, whether it's a department store that's closed or an author who's misled her," Taylor said.
He was referring, first, to an incident last summer when Winfrey became furious after being denied entry to an upscale Paris store, and, second, to her recent public drubbing of James Frey, author of A Million Little Pieces, who had belatedly acknowledged lying in the memoir that Winfrey had endorsed and had helped to make a best-seller.
Winfrey's influence on popular culture appears undiminished by the Frey fiasco. But superstar or not, Taylor said, it is unclear whether Winfrey's hiring will help tilt XM's books into the black.
"Both of these companies have been losing money, so are they spending too much on talent?" he asked. "It's a trade-off between hiring attractive talent and achieving profitability."
Both companies charge about $13 a month for their basic service, which includes music, sports and news, channels.
"It's a new frontier for me, and I like it," said Winfrey, who reminded reporters yesterday that she was no stranger to radio. "This is a full circle. Not many people know it, but I started out in local radio as a sophomore in high school."
Winfrey said she had established a subsidiary, Harpo Radio, to produce the new programming and would build a studio at her headquarters in Chicago for the purpose.
"I'm really free to do anything I want," Winfrey said about her show, which will run for 39 weeks a year and, she mused, might be called Reality Radio. She was vague on what it would contain.
"This is February, and we have until September to figure that out," she said. In essence, Winfrey said she and King - who have been friends since their 20s - will simply chat on the air as they have always done in private, "as girlfriends."
Winfrey said she would be "very involved" in producing the other programs on the Oprah & Friends channel and would "pop in and out of everybody's shows" when they go on the air.
At Banc of America Securities in New York, broadcasting industry analyst Jonathan Jacoby said that XM's deal with Winfrey "does not seem overly expensive for what is considered by many to be the leading celebrity brand."
Jacoby calculated that XM would need about 325,000 subscriptions to break even on the Winfrey deal.
He based his analysis, he said, on the fact that Winfrey's daily television show is watched by 49 million viewers per week, that her magazine has 2.6 million subscribers, and that her book club picks - including Frey's tall tale of a life gone bad - "tend to be No. 1" on best-seller lists.
Sirus vs.Xm satellite radio
67 music channels
12 news channels
16 sports channels
2 kids channels
15 talk and entertainment channels
3 comedy channels
22 local traffic and weather channels
Major League Baseball
ACC, Pac-10 and Big Ten football and women's basketball
Cal Ripken Jr., NASCAR's Jimmie Johnson shows
Oprah Winfrey (starting in fall)
Ellen de Generes
Opie & Anthony
69 music channels
22 sports channels
28 news channels (including local traffic and weather, NPR highlights)
25 entertainment channels (including comedy, talk, kids)
NCAA men's basketball tournament
Tony Hawk, Lance Armstrong shows
Sen. Bill Bradley
[ Sources: sirius.com, xmradio.com]