XM and SIRIUS to Offer A La Carte Programming

[Cornflake the Destroyer]

Press Release:

Companies’ FCC Filing to Detail Array of New Offerings Priced From $6.99 to $16.99

SIRIUS CEO Mel Karmazin to Discuss at National Press Club Address Today


NEW YORK, NY and WASHINGTON, DC – July 23, 2007 - SIRIUS Satellite Radio (NASDAQ: SIRI) and XM Satellite Radio (NASDAQ: XMSR) announced today that the merged company will offer American consumers for the first time the opportunity to choose programming on an a la carte basis. This unprecedented offering will provide subscribers with more choices and lower prices and pave the way for a unique form of competition in the entertainment industry—one based on the individual programming preferences of listeners.

Tomorrow, XM and SIRIUS will file their joint reply comments with the Federal Communications Commission (FCC). The filing will include detailed programming and pricing plans, including two a la carte options. One option will allow subscribers to choose 50 channels for just $6.99 – a 46 percent decrease from the current standard subscription rate of $12.95. Under this option, customers will also be able to include additional channels for as little as 25 cents each. The second a la carte option will allow subscribers to choose 100 channels and will allow SIRIUS customers to select from some of the best of XM’s programming (and XM subscribers to choose from some of the best of SIRIUS’ programming).

The combined SIRIUS-XM will also offer several other new programming packages, including two “family-friendly” options, as well. Those choosing one of the “family-friendly” options will be able to block adult-themed programming and, for the first time, receive a price credit. These packages will set a new standard in audio entertainment and subscription media, offering lower prices, package options, and “best of both” offerings. The new plans will give consumers the ability to choose from an array of different packages and price points, ranging from $6.99 – $16.99. A la carte programming will be available beginning within one year following the merger, and the other programming options will be available beginning within six months following the merger.

“Mel and I are very excited about being able to offer a la carte programming. We think this is going to be great for consumers and great for our business. From the day this transaction was announced, we promised that the merger would enable us to deliver more choices and lower prices for consumers. In our filing tomorrow with the FCC, we will offer detailed plans regarding how we will achieve those goals. These plans will further demonstrate why this merger is overwhelmingly good for consumers and in the public interest,” said Gary Parsons, Chairman of XM Satellite Radio.

In total, the companies announced a suite of eight post-merger programming options, all of which adhere to the companies’ commitment to maintain and enhance service to existing devices and to ensure that no consumer pays more after the merger for the service they enjoy today.

“The a la carte options and other packages unveiled today demonstrate that consumers will be the beneficiaries of this merger. The efficiencies of the merger will allow the combined companies to save hundreds of millions of dollars a year and give us the opportunity to increase the number of programming options available to subscribers,” said Mel Karmazin, CEO of SIRIUS Satellite Radio.


A La Carte Programming

The combined company will offer two a la carte packages. Consumers will select their channels on-line allowing them to easily review the full-range of each company’s programming choices. A la carte programming will only be available for subscribers using new radios, which will be developed following approval of the merger.

· A La Carte – 50 Channels ($6.99) – Currently the only standard package offered by either company is $12.95 a month. Under this new option, for only $6.99 per month – a savings of 46 percent – consumers will be able to choose either 50 SIRIUS channels from approximately 100 SIRIUS channels or 50 XM channels from approximately 100 XM channels. Additional channels can be added for 25 cents each, with premium packages priced at additional cost. However, no one choosing this option will pay more than $12.95 a month.

· A La Carte – 100 Channels ($14.99) – Consumers may also choose an a la carte offering of 100 channels each. SIRIUS customers will be able to choose from some of the best of XM’s programming and XM customers will be able to choose from some of the best of SIRIUS’ programming. Today this programming would require two monthly subscriptions, totaling $25.90. The new 100 channel a la carte option represents a savings of 42 percent.

Best of Both Packages Will Be Available on Existing Radios

Today, if consumers want the best of both XM and SIRIUS, they need two satellite radios and two separate monthly subscriptions totaling $25.90. Following the merger of SIRIUS and XM, consumers will be able to obtain the best of both SIRIUS and XM, on any of today’s satellite radio devices with one monthly subscription. XM customers would continue to receive their existing XM service, and be able to obtain certain SIRIUS programming. SIRIUS customers would continue to receive their existing SIRIUS service, and be able to obtain certain XM programming. This will be available through existing SIRIUS and XM radios at a monthly cost of $16.99, a savings of 34 percent, compared to what it would cost to receive both services today.


Discounted Family-Friendly Packages

Both companies enable comprehensive channel blocking and parental controls today. After the merger, consumers who purchase a family friendly version of XM Everything or SIRIUS Everything can do so for $11.95, a credit of $1.00 per month.

SIRIUS customers will also be able to choose a family-friendly version of SIRIUS programming that includes select XM programming. And XM customers can select a family-friendly XM programming option that includes select SIRIUS programming. These packages will cost $14.99 per month, a credit of $2.00 per month from the cost of the “best of” packages. Today, a consumer would have to purchase two subscriptions for $25.90 to get this combined content.

Get Mostly Music or Just News and Sports and Save 23 Percent

Following the merger, consumers will also have the option of choosing a package of SIRIUS Mostly Music programming or XM Mostly Music programming. Subscribers will also be able to choose a package of SIRIUS News, Sports and Talk programming or XM News, Sports and Talk programming. Each of these packages will be $9.99 per month, a savings of 23 percent compared to today’s standard subscription of $12.95.

Like What You Have Today? It Will Still Be Here Tomorrow

From day one, SIRIUS and XM have promised that no subscriber will pay more after the merger for a service similar to what they enjoy today and that no existing radio will be made obsolete by the merger. The XM Everything and SIRIUS Everything packages will offer a service similar to that offered today for the standard subscription of $12.95. Customers who choose to keep the subscription package they have today can continue to do so for $12.95 per month. Customers who purchase XM Everything and SIRIUS Everything packages will also be able to continue their current $6.99 multi-receiver subscriptions.





Additional detail on the packages is attached to this news release and available at either www.siriusmerger.com or www.xmmerger.com.



The companies anticipate the merger will close in late 2007.

 

[DashRiprock]

Oh, I get it. If the feds will ignore that pesky anti-trust thing and approve the merger we'll get better service and lower rates.

The BS meters are pegged...

 

[buttonpuncher]

Oh, I get it. If the feds will ignore that pesky anti-trust thing and approve the merger we'll get better service and lower rates.

The BS meters are pegged...

I agree, he used to sell radio advertising you know

I listened to his NPC talk today on C-Span and he even went as far to state the best way they can grow is to get more ears and offering lower priced packages will be a good way to get those ears.

My question, wouldn’t this hold true as separate companies? So what’s stopping them from doing this now? Looks like they’re just holding out this as bait....

Another argument he voiced several times is the merged companies would not be a monopoly because there is terrestrial radio, streaming, I-Pods, etc, etc as competition.

 

[firstimelongtime]

It's the thin end of the wedge. I remember how excited I was when my (first) cable company offered all the basic channels for $7 a month.
The difference is can live without sat radio.

 

[staticradio]

Oh, I get it. If the feds will ignore that pesky anti-trust thing and approve the merger we'll get better service and lower rates.

The BS meters are pegged...

I agree, he used to sell radio advertising you know

I listened to his NPC talk today on C-Span and he even went as far to state the best way they can grow is to get more ears and offering lower priced packages will be a good way to get those ears.

My question, wouldn’t this hold true as separate companies? So what’s stopping them from doing this now? Looks like they’re just holding out this as bait....

Another argument he voiced several times is the merged companies would not be a monopoly because there is terrestrial radio, streaming, I-Pods, etc, etc as competition.

I still see it as a monopoly since one chooses what to put into an Ipod, internet radio not yet commercially viable for in-car use, (commercial) terrestrial radio is too watered-down to be a challenge for sat radio (when it comes to music lovers)...both compete with each other nationally.

 

[arnoldevns]

I'm a little up in the air on this deal. Both companies are in bad shape financially. They're killing themselves trying to beat each other.
I think both companies could survive on their own, but probably not without some major hikes in subscription fees and cuts in programming costs.

The al la carte programming idea is not a bad one. There aren't 50 channels I listen to on a regular basis anyway.

 

[livingfruitvirus]

These a la carte channels are a ripoff. You're not saving a cent. It's either more for more, more for the same, more for less, or less for less. You can get all of either service for $12.99, or just 100 channels for $14.99? What sense does that make? And if you want all of both, you're still paying the same as now. For the pick 50, any channels people would really want cost more to the point where you'd be better off paying for the 100.

 

[Mike Sheridan]

These a la carte channels are a ripoff. You're not saving a cent. It's either more for more, more for the same, more for less, or less for less. You can get all of either service for $12.99, or just 100 channels for $14.99? What sense does that make? And if you want all of both, you're still paying the same as now. For the pick 50, any channels people would really want cost more to the point where you'd be better off paying for the 100.

I agree, lets just keep it simple all or nothing 12.95. You know with the a la carte stuff they will add something you'd really like and charge extra for it. After all the idea is for them to make more not less. You are going to want the $16.95 content not the 9.95 content They need to be careful here. I just came around to the thought of paying for radio.

It seems like if they didn't concentrate on big expensive performance studios in really upscale expensive locations they might be able to make a few bucks. The fact they can project computer images on the glass in the control room is nice but it doesn't do a thing for the end product.

The more I think about it why do they have to be in cities like Washington, DC and New York where the cost of living is so high and you have to pay bigger saleries for people to live. Ted Turner had the right idea starting CNN in Atlanta. Also in this day of terroist attacks who wants to have something like this in two cities that would be the top two targets?

 

[livingfruitvirus]

They have some good ideas going, but with the extra packages for the in-demand channels, it defeats the purpose of the pick 50. The pick 100 is $14.99 but the whole thing is $12.95? What the hell sense does that make? There's no decent sports package, which is the #1 cause of dual subscriptions. They could easily cobble together a $14.95 XM/Sirius sports-only package with no extra music or talk (unless there's a pay extra per channel option). Finally, the dual subscribers who were hoping to save money on their subs thanks to this merger will be paying exactly the same as what they pay now. The pick 50 would be more appealing if they didn't charge extra for a group of channels, and $3 for O&A or Oprah, and $6 for sports.

The more I think about it why do they have to be in cities like Washington, DC and New York where the cost of living is so high and you have to pay bigger saleries for people to live. Ted Turner had the right idea starting CNN in Atlanta.

In the entertainment industry it just makes sense to be around large cities with excellent means of communication and transportation, and better resources within the vicinity. XM and Sirius don't employ as many people as the larger conglomerates do. There's other areas where they would be able to save money, such as marketing and content spending. Ted may have begun in Atlanta, but he started with a local station that was uplinked to satellite, and built upon that. Heck, CNN has offices in New York and LA, Cartoon Network has a studio in LA. Another example, Nickelodeon, cable's #1 network, was in Orlando of all places. Eventually they moved to New York City.

Also in this day of terroist attacks who wants to have something like this in two cities that would be the top two targets?

By that logic, we should just all evacuate those cities because we might be attacked. I live in Los Angeles, and I plan to stay put.

 

[skyrocker]

The Ala Carte Menu is Shrinking.

There's a sad story about a family's pet parrot,
having snuck out the window for a peek at the
larger work, who was caught by a larger predatory
bird. Soaring out of sight it could be heard to
scream, "Merry Christmas, Merry Christmas!" That
simple little phrase was all it knew.

Kinda sad to see all the little worker birds
at XM in Washington, scrambling to do all they
know to get everything in house as low budget
and acceptable as possble for the Big Merger
with Mel and Sirius.

The Merger --capitol "M"-- all they think about,
like they have the inside track: it's a done deal.

And, when the time comes, Sirius in New York
will leave the bulk of XM people and
playlists sitting on the sidewalk in D.C.,
after taking their baseball, Dylan, Oprah
and a few other large marquee names.

And why wouldn't they? Why spend money on
a redundant studio?

Actual jocks and programming deemed
superfluous will be abandoned in favor of
the already in place Karmazen crew
(XM-Seven has already been paired down to
the two 'personalities' who actually pull
double duty maintenance on the other
channels' playlists; no jock on the way
home anymore) and commercials are already
heard on many channels.

You'll have YOUR ala carte choices later on.
The "programmers" are making theirs right now.
What'll be left? Another Top Three? (have you
tried to buy a pair of men's socks in colors
other than beige, gray or black lately? You
can NOT select primary green, even red; not
available on the Sock Ala Carte)

Thing is -- you already knew this stuff was
gonna happen.