At the beginning of 2004 XM had a total of 1.36 million subscribers. This was five times more than Sirius" total subscriber base. However, XM was still recording losses. In 2004, the company reported losing $642 million. To stay afloat, XM needed to raise $250 million to $300 million.
XM was planning to launch two satellites. One would be stationary, while the other was to be a mobile one. They would each be equipped with a small information screen. During early 2004 XM began broadcasting traffic and weather information in 21 U.S. cities.
XM"s satellites were not able to live up to their expected lifespans. While XM announced plans to build 1,700 repeater towers, the amount was far less than what the company had originally planned. As a result, XM needed to cut costs. XM had also been in debt, which meant it had to raise more capital to continue operating.
In the second quarter of 2005, XM Satellite Radio announced 640,000 new net subscribers. That was 18 percent more than the previous year. XM had just over a million subscribers by the end of the year.
XM had a lot of problems in 2002 and 2003. For one, its radios often had problems with microchip sets. XM also had to drop USA Today News. Nevertheless, it had won several awards. Fortune magazine named XM"s radio service as the best of the year. Eventually, XM was able to secure a $100 million advertising campaign.
XM also signed a 10-year agreement with Major League Baseball. It would broadcast all MLB games, as well as archival games. Also, XM would dedicate an additional channel for Spanish-language games. Besides baseball, XM would also offer coverage of college sports.
Despite all of these changes, XM was losing money. By the end of the year, it was on track to lose at least $200 million. XM restructured its finances, reducing its debt by $30 million. XM had a market value of around $300 million. GM, the Cadillac maker, was the biggest shareholder in the company.
XM"s stock was trading at a price of $30. It had raised $150 million by selling 11 million shares of stock. XM also had a loan of $35 million.
XM had been preparing a service called NavTraffic, which would show users alternate routes if their usual routes were clogged. XM had been working on a premium subscription plan, billed at $2.99 a month. XM was offering a subscription that offered access to a wide variety of music, news and talk programs.