Sound Management

Gary Parsons, '78 MBA, has transformed an old technology - radio - into a hip new thing that everyone (he hopes) will want to have.

By Theda Wrede

More than 30 years ago, Gary Parsons was spinning records at a radio station in Newberry, S.C., having fun on the six-to-midnight shift when he probably should have been cracking the high school textbooks.

As it turns out, those long evening shifts hurt neither his education nor his future career. In fact, the part-time radio gig kindled two of Parsons' passions: music and technology. Years later, the two would merge and reincarnate into the next big thing in radio broadcasting.

But all Parsons wanted back then was to get into the communications industry, which seemed to be his calling. He got an engineering degree at Clemson University and went to work for BellSouth. Three years later, he enrolled in USC's MBA program.

"USC allowed me to move out of a straight technology career so that I would not be pigeonholed simply as an engineer," Parsons said.

The MBA skills definitely put him on a faster track, and he was later named executive vice president for telecommunications giant MCI. He might have been content to work for large corporations for the rest of his career, but his wife, Kathy, inspired him with a career move of her own. She had opened an ad agency in Charleston and gave her husband a glimpse into the world of being one's own boss.

After leaving MCI, Parsons was chairman and CEO of American Mobile Satellite Corporation (a firm that had experimented with satellite technology for truckers, the Red Cross, and government institutions), and he believed the same technology would appeal to a wider market. Kathy encouraged him, and in 1997 he founded XM Satellite Radio, which obtained its FCC license the same year.

The concept of satellite radio is simple: satellites distribute a digital signal, covering large chunks of geography far better than the tallest broadcasting tower. Instead of listening to a station that fades away after driving for an hour or two, you could travel from Miami to Seattle listening to the same satellite radio music program without ever touching the dial.

But while the concept is simple, the logistics—and necessary capital—to put a satellite radio company on the air are daunting. Parsons spent several years attracting investors and then launching satellites to make XM Radio a reality.

"We had to juggle four to five very large companies with their own experts," said Hugh Panero, a former cable TV executive and now XM's CEO. "That's a lot of plates to keep spinning in the air."

Parsons' easy-talking eloquence came in handy as he cajoled and convinced investors.

"He lets nothing faze him," Panero said. "He's a financial wizard, but no one ever leaves the table feeling as though he has lost something. He's a man who thrives on challenge."

Which is a good thing, considering that the launch of "Roll," one of the company's $200 million satellites (the other is dubbed "Rock"), was delayed by two months. They later discovered that the satellites have a shorter lifespan than expected, so expensive replacements will be necessary sooner rather than later. Parsons' wry response: "If you're not living on the edge, youÕre taking up far too much space."

But don't read too much into Parsons' hard-charging work ethic. This guy likes to play, too. Lee Abrams, XM's chief programming officer, recalls a birthday party for one of Parsons' sons earlier this year in which his boss really relaxed. "It was surreal," Abrams said, "to see this 'Wall Street' kind of guy singing in front of 50 people."

Of course, even in his leisure time, Parsons betrays his drive to get his hands dirty. Regi Campbell, a high-tech entrepreneur in Georgia and Parsons' colleague from their BellSouth days, recalls the time Parsons bought his sons an old Ford Mustang that needed a lot of work. Fixing it up became a bonding project between Parsons and his kids, Campbell said, and it reflected Parsons' desire to understand a job—any job—in all its intricacies.

That hands-on management style has worked thus far, and Parsons remains an optimist about XM's future success. He believes XM's digital sound quality and commercial-free, wide-ranging programming will attract millions of listeners who are unhappy with what conventional AM/FM stations offer.

"XM has added one million customers faster than any other entertainment technology ever introduced, including CDs, the Internet, and videos," Parsons said.

He projects that XM's popularity will grow from roughly two million subscribers at present to 20 million customers by the end of the decade. What will set XM apart, he believes, is that it pumps out more than 100 channels of crystal-clear digital programming, including seven jazz channels, three classical channels, and eight different flavors of country music, including 'cross country.'

A stable of XM disc jockeys and programmers work in studios in Washington, D.C., and produce a lot more music channels besides. There are 40 channels more that include news programming partners such as ABC News, FOX News, CNBC, MSNBC, ESPN Radio, CNN Financial Network, BBC World Service, Discovery, and weather and traffic reports.

Every music channel is commercial free, and with a special XM radio in your car (General Motors and Honda offer XM radio as an option in many of their models), you can pick up the satellite signal anywhere in the lower 48. The radios are mobile, too, so you can listen anywhere.

"XM is all I rely on," Parsons said. "Here I find my favorite music, a combination of country and acoustic rock."

And it's here, at XM, that Parsons' expertise, determination, and passion for music and technology have propelled him to the top.

"What matters in life," he said, "is perseverance and a dedication to what is in you already. Everyone should have full expectations for success."

Theda Wrede, a native of Cuxhaven, Germany, is a Ph.D. student in English at USC. She looks forward to completing her doctoral studies in 2005.