XM Satellite, AOL in Online Radio Venture

XM Satellite Radio Holdings Inc. is tuning to America Online to push its music service into the mainstream.

The two companies plan to announce today that they will create an online radio service on the revamped AOL home page this summer featuring XM radio stations.

They also plan to use their own services to promote each other. For example, some XM satellite radio stations will feature programming from AOL’s existing music service, such as live performances recorded in the Internet giant’s studios.

XM Satellite, based in Washington, hopes it can keep growing its subscriber base of 3.8 million with help from AOL’s marketing muscle and 22.2 million subscribers.

“It’s a marriage made in heaven between two players that can accomplish a lot more together than they could alone,” XM Chief Executive Hugh Panero said.

For its part, AOL, owned by Time Warner Inc., is trying to offer more perks to paying members to prevent subscriber defections as well as develop services available to nonmembers.

Known primarily for providing dial-up Internet access, AOL is moving many of its services onto the open Net to attract more Web surfers and advertising revenue. The company plans to launch a new home page at AOL.com this summer, where the music service will join Web-based e-mail, news and other AOL content once reserved for subscribers.

“We think it’s going to be a powerful addition to our new portal,” Jim Bankoff, executive vice president of programming and products for AOL, said about the music service, which has not yet been named.

AOL subscribers and nonmembers willing to pay an undetermined fee will have access to a premium version of the service that features more than 70 XM channels and 130 AOL Radio channels delivered to their computers in CD-quality sound, the companies said.

XM and AOL also will offer a stripped-down version of the service for free, with 20 XM channels and 130 AOL channels delivered in lower-quality sound. Panero said 10 of the XM channels would remain constant, and the other 10 would change regularly so people could sample XM’s offerings and, he hopes, be enticed to sign up.