In his heyday at Infinity, Mel was the absolute best salesman. He was the Zen Master, as Stern called him. He could sell ice to an Eskimo. More examples of that in his presentation this week, as reported by my friends at RBR:
Karmazin offered some interesting numbers to illustrate why he likes the SiriusXM business model. He said SiriusXM generated $139 in revenues per subscriber in 2011. The largest terrestrial radio company (he didn’t mention Clear Channel by name) received only 10% of that, or about $13 of revenue for each of its listeners.
What Mel doesn't say is that OTA radio doesn't charge its listeners anything. So coming up with a revenue figure based on listeners is irrelevent. Advertisers base their price on lowest CPM, or cost per thousand, so its a system that is geared around maximizing audience to provide value for advertiser. By the way, based on what I'm hearing, I would challenge Mel's numbers. His customer service folks make sure no one pays full price.
“At SiriusXM we generate approximately $2 million per employee per year, as compared to IP radio, which is less than half that. Interestingly, terrestrial radio generates about $300,000 per employee compared to our $2 million,” Karmazin said.
If OTA radio had a single centralized transmission system, like XM Sirius, it could make more per employee than them. But OTA radio has to staff its local transmitters. If Mel's model is doing so well, perhaps its time to get Congress to reverse their monopoly. What do you think, Mel?
Karmazin offered some interesting numbers to illustrate why he likes the SiriusXM business model. He said SiriusXM generated $139 in revenues per subscriber in 2011. The largest terrestrial radio company (he didn’t mention Clear Channel by name) received only 10% of that, or about $13 of revenue for each of its listeners.
What Mel doesn't say is that OTA radio doesn't charge its listeners anything. So coming up with a revenue figure based on listeners is irrelevent. Advertisers base their price on lowest CPM, or cost per thousand, so its a system that is geared around maximizing audience to provide value for advertiser. By the way, based on what I'm hearing, I would challenge Mel's numbers. His customer service folks make sure no one pays full price.
“At SiriusXM we generate approximately $2 million per employee per year, as compared to IP radio, which is less than half that. Interestingly, terrestrial radio generates about $300,000 per employee compared to our $2 million,” Karmazin said.
If OTA radio had a single centralized transmission system, like XM Sirius, it could make more per employee than them. But OTA radio has to staff its local transmitters. If Mel's model is doing so well, perhaps its time to get Congress to reverse their monopoly. What do you think, Mel?