XM SATELLITE RADIO AND AOL DECIDE TO MAKE MUSIC TOGETHER

The pairing will have two levels. In the first, AOL will blend 20 XM channels with its own 130-station lineup and making it available free of charge on the Web. The second, premium arrangement will offer 70 of XM’s 150 channels for free to AOL members and for an as yet undetermined monthly fee to everyone else.

On the other side, XM will add AOL original programs like Radio KOL, AOL Music Sessions and AOL Music Live! into its satellite offerings, while the two companies will jointly develop new programming and services.

Talking to the L.A. Times, XM President/CEO Hugh Panero decribed the arrangement as "a marriage made in heaven between two players that can acomplish a lot more together than they could alone."

AOL EVP of Programming and Products Jim Bankoff calls the deal a “groundbreaking collaboration” that enables the service to “enrich our mix of premier programming experiences while also extending the reach of our popular franchises to new platforms.”

The arrangement is designed to promote XM’s service, which is up to 3.8 million subscribers, while giving AOL another enhancement in its efforts to increase its membership, which has dwindled in recent years with the advent of competing broadband services but still numbers a substantial at 22.2 million.

Said AOL Chairman/CEO Jon Miller, “The combination of our leadership in online programming and XM’s leadership in satellite programming represents a giant step in digital media. This relationship creates important and valuable opportunities across our core businesses, enabling us to provide unique value for our large Web audience, enhanced programming for our existing and new AOL members and the ability to introduce new premium services.”

Added Panero, “Our philosophy at XM has always been to work with strong partners at every level: retail, automotive, and now online to build awareness and subscriptions for XM. We are thrilled to be partnering with AOL and combining the creative resources of these two great companies. The multi-tiered, co-branded radio offerings will feature a number of popular stations currently offered by the AOL Radio Network and XM Satellite Radio.”

No financial terms were disclosed. The combined programming is expected to launch this summer, in tandem with the launch of AOL.com’s new Web portal.