New York-based Sirius Satellite Radio [Nasdaq: SIRI] is unveiling what the company calls the first national radio channel aimed at the large niche audience of gay, lesbian, transgender and bisexual listeners.

Sirius is launching the new channel in response to market research that found more than 15 million Americans adults have alternative sexual preferences, composing roughly 7 percent of the U.S. population. In addition, the research revealed that 72 percent of gays and lesbians prefer products that are advertised directly to them, Sirius officials said.

Sirius’ decision to allot one of its 100 channels of programming to meet the listening needs of people with alternative sexual preferences was taken after it dropped the Outdoor Life Network (OLN) Adventure radio channel. In its place will be OutQ, a channel that will air 24 hours a day, seven days a week.

The channel is the first talk-oriented “stream” that Sirius will offer as original programming, said Larry Rebich, Sirius’ vice president of programming and market development.

The intent is to feature “original, real and provocative” programming that cannot be found anywhere else, Rebich said.

By year-end, Rebich predicted that tens of thousands of new Sirius radios would be sold to members of the alternative lifestyle community. “It is a good business move but it is so much more than that,” he added.

As a supporter of the channel launch, actor Harry Fierstein said those with alternative sexual orientations have been “largely overlooked.” During a conference call announcing the launch, Fierstein said he sees the new channel giving gays and lesbians “a town square” to address issues of interest to them, even if they prefer to keep their identities private.

Some gays and lesbians are afraid to pick up newspapers catering to them for fear their neighbors might see them, he said. The new radio channel allows people to listen in the privacy of their homes.

The burly, gravel-voiced Fierstein is popularly known for playing gay characters in movies. In “Mrs. Doubtfire,” he played a makeup artist who helped transform comedian Robin Williams into a cross-dressing granny.

“We are such a diverse community,” Fierstein said. “It is very hard to figure out who we are.”

The new channel now gives people who want to be in touch with that community a place to turn.

“Typically, we’ve only been able to come together when there is a crisis,” said Fierstein. “I see great things possible here.”

The gay and lesbian community has been under-represented in broadcast programming, said Jimmy Schaeffler, a satellite and media consultant who heads The Carmel Group consulting firm in Carmel-by-the-Sea, Calif.

“Satellite-delivered content is all about niche audiences, because a satellite signal can reach every audience across America,” Schaeffler said. The new channel is a “remarkable opportunity” for Sirius to pull together a listener base that would be a step forward in catching up to rival XM Satellite Radio [Nasdaq: XMSR]. XM has a premium channel programmed by Playboy that airs frank discussion about sexual matters, but it does not offer a channel exclusively dedicated to those with alternative lifestyles, he said.

Star-studded Staff

John McMullen, who hosts a left-leaning political talk show on Sirius, will serve as program director for OutQ. He has hired a news director for the channel and lined up talk show hosts that will moderate discussions on gay and lesbian topics.

Joan Garry, executive director of the Gay & Lesbian Alliance Against Defamation (GLAAD), said, “To launch a new business, startups need to be willing to try something new. The lesbian and gay communities have been painfully absent from the media, including the radio. We see the channel making a bold move to offer our community a new opportunity.”

Marketing outreach for the channel will include gay pride events. OutQ had been in the research stage since last July and company officials said they are convinced it will find a viable niche.

–Paul Dykewicz

(Larry Rebich, John McMullen, Jim Collins, Sirius Satellite Radio, 212/901-6422; Jimmy Schaeffler, The Carmel Group, 831-643-2222)

Reasons For A Gay/Lesbian Channel:

• Spending Habits: The community OutQ aims to serve has higher than average discretionary spending levels, with distinct consumer attitudes and buying preferences.
• Buying Power: Spending by gays and lesbians in the United States reached $450 billion in 2002.
• Brand Loyalty: Seventy-seven percent of gays and lesbians last year switched brands to companies that took a positive stance toward their lifestyles.
• High Information Needs: Seventy-four percent of gays and lesbians believe that “too much information is never enough” either online and offline.

Sources: Selig Center for Economic Growth, University of Georgia, U.S. Census projections (2002), Witeck Combs and HPOL data; Greenfield Online, Computer Economics, PlanetOut Partners