Radio industry experts say terrestrial radio may have met its match, as the two pioneers in satellite radio are predicting better- than-expected growth this year.

Washington-based XM Satellite Radio Holdings Inc. announced yesterday that it exceeded 5 million subscribers and expects to add another million by the end of the year. Meanwhile, its smaller, New York-based rival, Sirius Satellite Radio Inc., recently said it expected to end the year with 3 million users.

While observers acknowledge the number of people who subscribe to satellite radio is still scant, they said terrestrial radio is already feeling an impact.

First of all, right now, the numbers themselves are still quite small when you think about how many people have free access to terrestrial radio, said Michael Harrison, editor and publisher of Talkers Magazine, a talk radio industry trade publication based in Springfield, Mass.

The physical reality is that satellite is not taking a lot of listeners away from terrestrial yet, however, satellite is growing. The numbers will eventually start making an impact, he said. It will take a few more years before the actual number of subscribers to satellite radio makes a serious dent in the number of people who access the FM and AM radio stations.

After XM's subscription base more than doubled to 3.2 million in 2004, the company projected subscriptions would grow to 5.5 million by the end of 2005. Meanwhile Sirius expects to end the year with about 3 million subscribers, up from about 2.1 million earlier this month.

Satellite is demonstrating to the world just how good music programming can be if you get it from satellite and how limited terrestrial has become, Harrison said. It has exposed all of the weaknesses of terrestrial, and that is the area where the impact has already been the most profound.

Terrestrial has already begun making some changes to compete with satellite, said John MacKerron, associate professor of media and film at Towson University.

Along with actually cutting back on commercials, radio stations have tried to create the illusion of reduced commercials by running more music back-to-back while airing longer commercial breaks, MacKerron said.

For terrestrial to survive, since they cannot rely on subscriber fees, they are obligated to run some commercials, he said. It's something they cannot avoid.

And commercials are what most satellite users are looking to avoid, MacKerron said.