Sirius and XM propose a la carte service for $6.99

[GA Russell]

Sirius and XM are trying to win approval of their proposed merger, which would leave the satellite radio industry in a state of monopoly. So they are proposing 50 channels of your choice for $6.99 a month. Or 100 channels of your choice of the two systems combined for $16.99. But you have to buy a new radio.

http://www.foxnews.com/story/0,2933,290393,00.html

XM, Sirius Plan to Offer 'A La Carte' Programming

Monday, July 23, 2007

NEW YORK — U.S. satellite radio providers Sirius (SIRI) and XM (XMSR) said Monday they can offer consumers a variety of subscription packages that cost up to 46 percent less than current plans if their merger is approved.

In a bid to allay concerns among U.S. lawmakers that their merger would raise prices and limit programming choices, the two companies announced several new packages that they say offer consumers more choice than they can individually.

Under one package, customers can pick 50 channels on either XM Satellite Radio Holdings Inc.'s or Sirius Satellite Radio Inc.'s systems for $6.99 a month. Additional channels can be added for 25 cents each.

Currently, subscribers pay about $13 a month for more than 100 stations on either XM's or Sirius' systems.

"We need to build the subscription business base of satellite radio to strengthen our business and better leverage our high fixed costs," Sirius Chief Executive Mel Karmazin said in a speech in Washington. "We are confident that a lower price point (and) more programming choices will help us do just that."

Karmazin said he hoped the lower price would spur growth in the nascent satellite radio business as it competes with digital music players, video games and traditional radio for consumers' attention and funds.

The XM-Sirius deal, which would combine the only two providers of satellite radio service in the United States, is currently being reviewed by both the Federal Communications Commission and antitrust authorities at the Justice Department.

The two companies, which together marked more than $1.7 billion in losses in 2006, said the new "a la carte" packages will work only on satellite radios that have yet to be sold by either company. Other packages will be available on existing satellite radios.

RIVAL: DON'T BE "HOODWINKED"

In his speech, Karmazin took to task the merger's toughest critic, the National Association of Broadcasters, saying the radio industry lobbying group had argued the merger would result in higher prices.

"This (plan) should finally put this false argument to rest once and for all," he said.

In a statement, the NAB's Dennis Wharton said policymakers should not be "hoodwinked" by the announcement.

"Nothing is stopping either XM or Sirius from individually offering consumers a more affordable choice in limited program packages," he said. "Moreover, after reading the fine print, one discovers that XM and Sirius customers have to buy a new radio for an undisclosed fee to reap the alleged rewards from today's announcement."

Karmazin said the new radios would be similarly priced to currently available satellite radios.

The planned "a la carte" programming would be available beginning within one year following the merger, which the companies hope to complete later this year.

Analyst David Bank of RBC Capital Markets said the move may benefit the merger, but could eventually hurt the company's financial standing.

"In giving the FCC the safeguards that should greatly enhance probability of regulatory approval, potentially effectively lowering average revenue per user, XM and Sirius could also erode operating fundamentals, offsetting merger synergy values," he said.

Another of the new offerings lets subscribers choose 100 channels, including stations from both systems, for $16.99 a month. Other options will include packages with a focus on music, news and talk stations, or "family friendly" fare for about $10 to $12.

XM and Sirius said that they they will file on Tuesday their joint reply to the Federal Communications Commission, now that a period of public comments has closed.

Shares of Sirius rose 2.3 percent to $3.20 on Monday afternoon, while XM shares were down 0.55 percent at $12.58.

[Jim Alfredson]

Why does it take a merger to have ala carte channel selections?

[Tom 1960]

So what happens to us poor slobs who already own the current receivers? Will they be rendered useless at some point if this merger takes place?

[Brad]

So what happens to us poor slobs who already own the current receivers? Will they be rendered useless at some point if this merger takes place?

I hope not. I don't need the a la carte version.

[Lazaro Vega]

When they applied for these special frequencies it was with the proviso that the two stations would never merge, that competition would be the watch word. They also said there'd be no local weather, no local traffic. Went back on everything. "Oh, the marketplace has changed, it's all different now." The only thing that's changed is the doorman holding out their hat. If they can't make it with their multi-million dollar budgets, to hell with them. What do they offer that's different than "terrestrail" radio, especially if web streaming moves into automobiles? The rest of us down here on the ground are trying to make it on far less. See, the Republicans are coming to the rescue of big business, again. They're all about free market until the rubber is warming up to hit the road and then they're like, "Wait, I have STOCK in that!"

[catesta]

When they applied for these special frequencies it was with the proviso that the two stations would never merge, that competition would be the watch word. They also said there'd be no local weather, no local traffic. Went back on everything. "Oh, the marketplace has changed, it's all different now." The only thing that's changed is the doorman holding out their hat. If they can't make it with their multi-million dollar budgets, to hell with them. What do they offer that's different than "terrestrail" radio, especially if web streaming moves into automobiles? The rest of us down here on the ground are trying to make it on far less. See, the Republicans are coming to the rescue of big business, again. They're all about free market until the rubber is warming up to hit the road and then they're like, "Wait, I have STOCK in that!"

I don't recall either saying in the beginning they would never broadcast local traffic and weather. What they don't do is have local DJs calling it out every 45 seconds. They have select channels for select major metro cities.

I'm sure cable TV made all kinds of promises in the beginning and look at it now. A couple of major companies.

I'll tell you what they offer over "terrestrial" radio, the ability to listen to the same programming coast to coast. Music channels for almost every possible taste and with no commercials. And the big one for me is, no censorship.

And sorry Lazaro, with much respect I have to say I disagree with you that the Republicans are all in favor of this and helping big business.

If anything it's big business such as Clear Channel and Infinity that have their hands on the strings of politicians and are maming this a very difficult process with still no decision.

Take a look at how long this merger talk has been going on.

I know you're in the business and I admire the programming you do, but for the most part standard commercial radio in an inferior product. Once you listen to satellite you'll never go back to the dozens of "morning zoos" and "two for Tuesdays", and " it's a Def Leppard, block party weekend!" type of listening experience.

The merger is a good idea. No one has to subscribe, you still have the choice not to subscribe. Unlike if you gas and electric which you need and only have one service proivider per geographic location.

[catesta]

So what happens to us poor slobs who already own the current receivers? Will they be rendered useless at some point if this merger takes place?

I hope not. I don't need the a la carte version.

I have a close friend that is a regional sales manager for Sirius.

As he explained it to me, both types of receivers will still be good. In the start they have plans on sharing major programming such as Howard Stern and broadcast it to through the two different satellite technology systems. The "al la carte" would allow you the option to pick as a reduced cost only the channels you wanted from an XM menu and Sirius menu.

In the future they will begin to manufacture equipment to pick up both signals, as well as continue to broadcast the same total programming to the different types of receivers.

The only major change would be the elimination of redundant programming such as the decade channels and news.

[Lazaro Vega]

When they applied for these special frequencies it was with the proviso that the two stations would never merge, that competition would be the watch word. They also said there'd be no local weather, no local traffic. Went back on everything. "Oh, the marketplace has changed, it's all different now." The only thing that's changed is the doorman holding out their hat. If they can't make it with their multi-million dollar budgets, to hell with them. What do they offer that's different than "terrestrail" radio, especially if web streaming moves into automobiles? The rest of us down here on the ground are trying to make it on far less. See, the Republicans are coming to the rescue of big business, again. They're all about free market until the rubber is warming up to hit the road and then they're like, "Wait, I have STOCK in that!"

And sorry Lazaro, with much respect I have to say I disagree with you that the Republicans are all in favor of this and helping big business.

If anything it's big business such as Clear Channel and Infinity that have their hands on the strings of politicians and are maming this a very difficult process with still no decision.

Take a look at how long this merger talk has been going on.

I know you're in the business and I admire the programming you do, but for the most part standard commercial radio in an inferior product. Once you listen to satellite you'll never go back to the dozens of "morning zoos" and "two for Tuesdays", and " it's a Def Leppard, block party weekend!" type of listening experience.

Yes, the commercial radio world is a bilge pump. The original bill establishing sat rad had 70 co-signers: should look at that list before making sweeping generalizations, yet -- the deregulation of government in the service of corporate greed continues.

Edited July 25, 2007 by Lazaro Vega

[Lazaro Vega]

No doubt -- and you see the results of unchallenging music programming: it goes away. The biggest problem with public radio is that is was supposed to pay for itself, that the grant trough was only for start up, and the radio stations would be giving back to the culture as in the European model, i.e. creating performances, comissioning works, paying artists to do so, and dissemenating it to the public. Unfortunately many of the stations never got the "good stuff" but scrapped and whored to just keep afloat.

The question, though, is what does sat radio offer that you can't find other places? Though commercial radio is a dust heap the sum total of net radio offers as much or more diversity than the sat stations, which, by the way, I listen to at family and friends' homes. The advantage of sat radio is that each station is pretty much "on demand." You don't have to wait for anything to come up, you go to a place it always is. Terrestrail radio is starting to be able to do that with the incoming digital stations, but "on-demand" programming via the web is, by law, verbotin (and no on pays attention, they just do it).

[catesta]

The question, though, is what does sat radio offer that you can't find other places?

That's like saying what does cable TV or satellite TV offer over local. Huge difference and minus all the local hype.

No way you can find a station in any city anywhere programming a channel that plays nothing but Elvis or music exclusively from the 70s without any commercials and hear it the same in Cleveland as you do in San Diego.

My friend clem has it completely right. This is standard commercial broadcast radio and their lobbyists vs. Karmazin. Then maybe it goes another level to the FCC vs. Stern and some other folks.

Exxon and Mobil merged in like 3 hours, but yet two satellite radio companies that want to make one can't catch a break. The feds let dudes like Rupert Murdoch control multiple media outlets in multiple geographic zones, but they don't want people to be able to pay to hear uncensored Richard Pryor while driving on the BQE.

[Lazaro Vega]

I don't think it is a censorship issue as much as a competitive one. And you're right: these hogs have made regulation of television, radio and newspapers by the same owners all but non-existent. Now that they've made their bed all nice and comfy they don't want to get up and answer the door.

"Huge difference and minus all the local hype."

See, that's what makes radio great: localism. Not syndication. Syndication is a good addition to local programming yet the advancements in computer technology have made possible the consolidation of radio ownership centered around a profit motive that cuts personnel, removes the station's content from the location it is coming from and replaces it with audience tested "product" that's proven commercially viable, especially as manufactured nostalgia. That's commercial radio in a nutshell. Then there are the people yelling at you or otherwise being as entertaining as a room full of tired toddlers on "talk radio." I don't know why Clem's hearing what he's hearing on NPR affiliates, though the news push so many stations went with opens the door for all kinds of "coverage." In any case, many channels broadcasting from a hard drive whirring quietly in an air conditioned room is a central reason why people aren't listening to commercial FM radio. No one's taking chances in that model.

Local, stations, however, are another story.

WGN radio in Chicago (which is as professional as radio can be IMHO) has been a country wide "local" station for years. Local hype in Ann Arbor means WEMU promoting live jazz and blues shows across southeastern Michigan. There's a cheesy local FM station in Grand Haven, Michigan that combines canned music with local ads and obituaries, farm reports and nautical "notes" which the town listens to. My wife listens to a local station from Martha's Vineyard everyday. Localism is where radio thrives. That's the reason I've been here 24 years: no oversight! Well, from a programming point of view this push towards "day parting" is ever present, which is why you often here jazz shows like somanex because the professional programming philosophy, and these consultants are expensive, have observed people sleeping at night, so logically the way to reach your largest audience in that day part is to help them to it. Brilliant! So the Evan Parker is on after midnight. At least it remains a choice. Ah, compromise.

Letting me or Werf loose at XM would be, who knows, their death knell? We're from the Great Lakes where Chicago's "ancient to the future" point of view is to be emulated. It is the philosophy which counteracts all the "professionalism" of not taking chances. It's God and the Devil all over again.

Not that the sat stations aren't taking chances. The whole endeavor is a chance, as is waking up and driving into the Manistee National Forrest to see if the audience cares if I play "Moon Ray" by vibraphonist Herb Gibson before returning to a set featuring Roy Eldridge, this time with the Artie Shaw Orchestra and Gramercy 5.

As for hearing the same thing all the way across the country, how different is that, really, from the almost identical programming on commercial radio coast to coast? (Read of one person driving from Louisiana to L.A. and counting something like 400 times he heard "Yellow Submarine").

Ruminations.

Edited July 26, 2007 by Lazaro Vega