satellite radio, type of digital broadcast, which transmits audio signals over large areas with greater clarity and consistency than conventional radio.

A satellite radio service works by transmitting its signal from a ground-based station to one or more satellites orbiting Earth. The satellite bounces the signal back to specialized receivers on the ground, commonly located in automobiles and home stereo systems. Because the signal is broadcast from outer space, it can reach across an entire continent. Ground-based repeaters augment the signal in urban areas where tall buildings might cause interference. In the United States, satellite radio operates on the 2.3 gigahertz (GHz) S band of the electromagnetic spectrum; elsewhere, it often uses the 1.4 GHz L band.

Most satellite radio services operate on a subscription model. A consumer buys a proprietary receiver, which is activated with the purchase of a subscription. Once activated, a receiver can decode the satellite’s encrypted digital signals. Satellite radio typically offers a much clearer signal and greater dynamic range than conventional radio, often approaching the sound quality of compact discs (CDs). Services typically offer a hundred or more channels, including music, news, talk, and sports. Many channels are free of advertising.

In the United States, rivals XM Satellite Radio and Sirius Satellite Radio, launched in 2001 and 2002, respectively, competed to attract exclusive talent, such as television host Oprah Winfrey and radio star Howard Stern. However, the splitting of marquee stars between the two services, along with a similar split in sports programming, hampered both companies. Laden by debt, the two companies merged in 2008, and the newly formed company, named Sirius XM Radio, became the sole American satellite radio provider (they remained separate entities in Canada).