Sirius XM goes "THUD!"

[TANKSBACK]

Mel Karmazan, former fearless leader of CBS (WGRR, Q102, WAQZ, WUBE) who left to command the satellite radio empire, apparently put all his eggs into the Howard Stern basket and now it's blown up. Bankruptcy or a buyout, shares at about 5 cents a share...talk about falling off of the dollar menu! Guess trying to convince people to pay for someone else's iPod music wasn't the best business model. Once internet radio units for cars come down in price satellite radio will be completely toast IMHO.

 

[KFodor]

While I don't deny that internet radio can be competition for over-the-air, one must realize that some of the reasons satellite radio has never caught on is:

1.) The business model had them programming to the "minority" of over the air listeners (the "radio sucks" crowd). and...

2.) Paying the exorbitant prices for Howard, Oprah, NFL, NASCAR, etc, etc, etc. did not guarantee major audiences. (Nascar, for example, while undeniably popular in terms of butts-in-the-seats and on TV, rarely has proven to be a big audience getter on radio.)

Satellite radio can still succeed financially, but the business model needs to radically change. And the individual channels need to make money. (Yep...that means "commercials", and more programming to the masses, because this experiment proves, more or less, most people won't pay for entertainment, if a similar form of entertainment listeners are "satisfied" with is available free.)

So internet radio, remember: 250,000 individual radio stations, each with a listenership of 12 (I'm exaggerating, but stay with me here) does not lead to profit. You need the masses to win.

 

[landtuna]

Satellite radio can still succeed financially, but the business model needs to radically change. And the individual channels need to make money. (Yep...that means "commercials", and more programming to the masses, because this experiment proves, more or less, most people won't pay for entertainment, if a similar form of entertainment listeners are "satisfied" with is available free.)

I'm just guessing here and don't have a scientific study to back it up but the vast majority of people who comment on why they subscribe to satrad use lack of commercials as the primary reason. Second place belongs to the niche listeners who like Stern, NASCAR, and eclectic forms of music not available on T-radio. Third place belongs to people who travel outside the range of T-radio and want uninterrupted coverage.

I'm no expert and don't play one on TV but I think a guaranteed means to absolutely crater satrad would be to introduce a commercial load similar to what exists on T-radio. The silence would be deafening.

 

[techie2]

That's about right for me...I subscribe to avoid long breaks of screaming car dealers and plugs for overpriced "HD Radio" junk. Also to listen in the morning without having to chose from morning shows that are all just variations on "Weenie and the Butt" (see Family Guy for explanation...). Plus it's nice to have more than the same set of bland formats.

Maybe someday I'll be able to get reliable mobile data service for streaming audio. Right now I can't get seamless 3g coverage in town. In the mean time, if Sirius XM does get shut down, I'll just use the line-in for the sat receiver to hook up an iPod.

 

[gr8oldies]

Commercials would be a mistake, but I could see a very limited number on some of the channels that aren't duplicated much on terrestrial radio.

 

[Kahuna1]

I own a sirius radio and listen both in the car, back and forth to Columbus daily, and at my desk via the wireless internet. The only thing that will change if they do go bankrupt is that they can drop Howard Stern and his 100 million dollar a year contract along with a few other of thier very high priced "celebrities" I goota tell ya the novelty of hearing sh#t and F**k every other word wears off in a hurry. The best part of Sirius/XM for me is the commercial free music, CNN and ESPN radio that doesn't fade out 3 miles from home. The service does serve a purpose for millions of listeners. Whether they get a new owner, either Liberty or Echostar,might lay in the hands of the DOJ. Something about one of the only Sat Tv companies owning the only Sat Radio company is raising more than a few eyebrows.

 

[One Who Knows]

I own a sirius radio and listen both in the car, back and forth to Columbus daily, and at my desk via the wireless internet. The only thing that will change if they do go bankrupt is that they can drop Howard Stern and his 100 million dollar a year contract along with a few other of thier very high priced "celebrities" I goota tell ya the novelty of hearing sh#t and F**k every other word wears off in a hurry. The best part of Sirius/XM for me is the commercial free music, CNN and ESPN radio that doesn't fade out 3 miles from home. The service does serve a purpose for millions of listeners. Whether they get a new owner, either Liberty or Echostar,might lay in the hands of the DOJ. Something about one of the only Sat Tv companies owning the only Sat Radio company is raising more than a few eyebrows.

Then, it's quite possible satellite radio will never survive. (Or will need deep pockets as a loss leader.)

Not every channel has to run commercials, but a fair amount of them are going to need commercial advertising. Satrad has been in business how long now? And, they've done a ton of both paid and free advertising on TV and some radio, right? What percentage of the public knows that it's there and available? A heck of a lot more people than know about HD radio. If "commercial free" music channels was going to be the be-all, end-all toward profitabilty and a gazillion subscriptions, it would already be happening in a big way. But, it's not.

I won't deny OTA radio would be wise to look at some of the crap commercials they air now and insist on being more selective (that, of course involves proving they really can attract salespeople who can create results for clients). But, there does seem to be something awry with the satellite radio business model.

 

[FRR]

I've listened to Sat radio for over three years and love it. But quite frankly, subscribers were lied to when Mel pushed for the merger, and the "choices" and "lower price packages" never materialized. Now we are looking to high renewal rates and a questionable future. But with all that said, it is still better for this listener than the blah blah blah that Cincinnati morning radio has on day after day. Whether it is WGRR with that continual giggling and the 400 songs playlist, or the talk talk talk on other stations, Sat is still worth the money, so far at least. If the trend in Sat continues, then I'll drop them like third period French and and my IPOD will be used exclusively. . My question to you folks out there who know radio well, is simply this; Doesn't the FCC enforce the promises that companies make when they submit their "plan", or is there always an excuse as to why the promises are never met?

 

[ncincy1]

Satellite Radio isn't going anywhere.

Maybe the model will change back to "mostly music" and get rid of the highly overpaid "stars".

Investors may not make as much as they hoped but its a good service that people who have it really love it. Its one of those services where you can't get rid of once you are accustomed to it. And, it's only a a few bucks a month, less than a movie ticket in NYC. Or, you can continue to put up with the awful crap on terrestrial radio - no thanks!

In addition, it's just now getting interesting......with Dish and DirecTV in the mix for majority ownership (stock).

Bottom line: what really needs to happen - now - is that Mel and Howard need to go bye-bye. This will allow the shareholders to get the best prices and subscribers to get what we deserve - radio programming alternatives at a fair price (well, until Internet mobile radio technology is more perfected - it's coming.)

Lets get some pros to lead this company to profitability. Business schools will be talking about how not to run a company for years. Let's unleash the potential of SIRI under competent ownership and management.

 

[ncincy1]

UPDATE: Sirius XM goes "THUD!"

It's a "done deal" - according to Wall Street Journal and Marketwatch.com

- Sirius XM Radio and Liberty Media reach investment deal - MarketWatch
- Liberty to invest $530 mln in loans to Sirius XM - MarketWatch
- Liberty to receive equity interest in Sirius XM - MarketWatch

Now what?

 

[softmachine]

I goota tell ya the novelty of hearing sh#t and F**k every other word wears off in a hurry. 

Well, I goota tell ya: The profanity is not that frequent, and that's not the only reason to listen to Stern.

 

[softmachine]

Bottom line: what really needs to happen - now - is that Mel and Howard need to go bye-bye. This will allow the shareholders to get the best prices and subscribers to get what we deserve - radio programming alternatives at a fair price (well, until Internet mobile radio technology is more perfected - it's coming.)

Lets get some pros to lead this company to profitability. Business schools will be talking about how not to run a company for years. Let's unleash the potential of SIRI under competent ownership and management.

OK then-map it all out for us-Start here:

Who would you suggest to run SDARS?

IMR would be feasible-if the delivery system is steadier than cellular. It will take more infrastructure investment-in addition to white space purchases- to get it up to speed. How long might that take, now that you're in charge? Flesh your conjecture.

 

[ncincy1]

1.) Every other analyst you hear from in the media all agree that Mel K. absolutley does not have the best interest of SiriusXM in mind - the "magic" he worked on during his days at CBS is long gone.

2.) Again, Howard is too expensive - now a liability instead of an asset. Need to renogotiate his contract to reflect TODAY'S economy scale.
Scale back to "mostly music" and sports channels and keep the price fair - again for TODAY'S economy.

3.) Anyone but Mel should run the company under Liberty Media.

4.) It's understood that cellular Internet audio streaming (cars in particular) is a ways off in terms of technical stability/adoption. Next 3-5 years: lookout!

 

[softmachine]

1.) Every other analyst you hear from in the media all agree that Mel K. absolutley does not have the best interest of SiriusXM in mind - the "magic" he worked on during his days at CBS is long gone.

Who?

2.) Again, Howard is too expensive - now a liability instead of an asset. Need to renogotiate his contract to reflect TODAY'S economy scale.
Scale back to "mostly music" and sports channels and keep the price fair - again for TODAY'S economy.

It may happen, or it may not. I think the prices paid for Oprah and Martha Stewart are way out of bounds. Stern actually has a proven draw. It may need a nudge. I thought the major part of his compensation was in the stock delivery once subscriber threshold was met. He cashed the stock in as far as I know.

3.) Anyone but Mel should run the company under Liberty Media.

Anything can happen in this arrangement. Again, wait and see.

4.) It's understood that cellular Internet audio streaming (cars in particular) is a ways off in terms of technical stability/adoption. Next 3-5 years: lookout!

We'll see if the quality is there, or the delivery system will be hampered by greedy data compression schemes as is the cellular system. Infrastructure has to pass muster with the FCC-I don't think AUTO-WIFI would work piggybacked on the cellular backbone. We'll see how continuous the system will be with the current/soon to be UHF whitespace.

 

[4dude]

It's a "done deal" - according to Wall Street Journal and Marketwatch.com

- Sirius XM Radio and Liberty Media reach investment deal - MarketWatch
- Liberty to invest $530 mln in loans to Sirius XM - MarketWatch
- Liberty to receive equity interest in Sirius XM - MarketWatch

Now what?

They made a stupid move!!

That company sucks now!! -- No different than listening on a standard radio!! (Why pay for that garbage)

 

[Pscc8082]

It may have been a stupid move, but they put money in my pocket. Stock prices have a least tripled in the past few days. .055 per share on Thursday last week and now .16 a share. Thats a profit!