Living room on wheels
DETROIT — Coming soon to a minivan near you: Satellite television.
DaimlerChrysler AG's Chrysler Group on Thursday announced limited satellite TV service for its 2008 Dodge and Chrysler minivans and several other models, continuing its plan to turn the family cruiser into a living room on wheels.
The company, which invented the minivan, is teaming with Sirius Satellite Radio Inc. to bring three channels — Nickelodeon, Disney Channel and Cartoon Network — to the next generation of minivans, as well as the 2008 Chrysler 300, Dodge Charger, Dodge Magnum, Jeep Commander and Jeep Grand Cherokee.
Chrysler said it has the channels exclusively through the 2008 model year, after which Sirius can offer it to other partners.
The feature comes with a price tag, though. It costs $470 and will be packaged with Chrysler's rear seat entertainment system and Sirius Satellite Radio. The cost includes the first year of service, after which the TV channels will cost $7 per month, plus the satellite radio fee of $12.95 per month.
It's possible that in the future, more channels and even full satellite service could become available, but for now, it's limited by bandwidth allocated to satellite radio, said Frank Klegon, executive vice president of product development for Chrysler.
Sirius, he said, has figured out how to send a limited TV signal within the airwaves allocated to satellite radio.
"I think there's certainly some potential in the future for expansion of additional channels," he said.
Klegon also said satellite TV is the latest step in a continuation of information technology moving from home to vehicle.
But Tom Libby, J.D. Power and Associates' senior director of industry analysis, questioned whether people would be willing to pay for it.
His company recently found that the average new vehicle price has passed $28,000. With the initial cost plus the monthly bills, he wonders whether the feature might only appeal to high-end customers.
Still, he said the feature would be attractive for people who travel with children, and it will help Chrysler differentiate its minivans in an extremely competitive market.
"Any advantage they can get, they'll try to use," he said.
Sirius spokesman Patrick Reilly said the new TV service would have no effect on the company's audio programming. However, he declined to say how many more channels, if any, Sirius would have the capacity to transmit.
"We've got the three channels we want there," Reilly said. "We're programming it for the demographic of the back seat, which is children, and in the cars that will carry it."
The TV service has been in the works for several years, and Sirius has demonstrated it at trade shows in the past.
Sirius' satellite radio rival, XM, is exploring backseat video with its automotive partners but has no plans for an announcement, spokesman Chance Patterson said.
"As soon as there is a market opportunity, we will take it under consideration," Patterson said.
Oppenheimer & Co. analyst Thomas Eagan said the video should help Sirius grow its subscriber list, but could have the potential of causing a glitch in Sirius' plans to combine with its rival XM Satellite Radio Holdings Inc.
Sirius and XM have been blocked from merging under licenses granted to them a decade ago, but the companies argue that there are now many forms of competition for audio entertainment, including MP3 players, Internet radio as well as terrestrial radio.
"My concern is that one consequence could be that regulators could define the market more narrowly and conclude that broadcast radio is not a competitor," leading them to block the proposed combination, he said.
Chrysler and Sirius ran a demonstration of the service Thursday morning in New York's Times Square.
In a Dodge Grand Caravan, the TV system easily was able to switch channels, with a slight delay, and delivered good quality sound and pictures.
The driver or front-seat passenger can switch between the TV service, Sirius satellite radio's audio service as well as regular AM and FM radio via a small video screen installed in the dash. That system, which also includes a navigation service and a hard drive for playing music from MP3 files, is called the MyGIG.