Fancy Man Frrrunkus
11-10-2007, 03:45 PM
from the Chicago Tribune
Mel Karmazin, chief executive officer of Sirius Satellite Radio, met with the Tribune editorial board Wednesday to discuss the proposed merger of Sirius with XM Satellite Radio, shock jock Howard Stern and the intense competition in media markets.
Tribune: Why should the Federal Communications Commission and the Justice Department approve the merger of Sirius and XM Satellite Radio?
Karmazin: Arbitron says that XM and Sirius together represent 4 percent of the radio listening market. It's bizarre for me to think that anybody could think that in this whole area of audio entertainment there isn't plenty of competition, and new competition coming every day. Not only do we compete with all of the radio stations that exist, we also compete with all of the other alternatives that have come along since we've gotten our license.
We currently compete with free [radio].
You're listening to this boring AM and FM radio that's around. And one day, you want satellite radio, or you buy a car that has satellite radio, and after a trial period you decide you don't want to have satellite radio, and then you go back to free. So when we compete with free, we're more apt to get a subscriber at $6.99 than at $12.95. So when you're a company that has lost all of this money, and we are continuing to lose money, the ability to reduce prices -- which is what we would like to do -- doesn't happen.
The way it happens is through this merger. The efficiencies have been estimated between $3 [billion] and $9 billion. Our plan would be that we would offer consumers lower prices and more choice. By giving them lower prices and more choice, including a la carte offerings, we think that serves the public interest. From our point of view, the merger should be a no-brainer.
Tribune: What happens if the FCC does not approve the merger?
Karmazin: Sirius will sue.
Tribune: Was the Howard Stern deal a winner? He all but credits you for saving his life, his career.
Karmazin: I'm not sure I'd like to be known for that. Howard got $80 million a year in cash. To make that deal work, you need a million subscribers paying $120 a year or $12.95 a month.
Mel Karmazin, chief executive officer of Sirius Satellite Radio, met with the Tribune editorial board Wednesday to discuss the proposed merger of Sirius with XM Satellite Radio, shock jock Howard Stern and the intense competition in media markets.
Tribune: Why should the Federal Communications Commission and the Justice Department approve the merger of Sirius and XM Satellite Radio?
Karmazin: Arbitron says that XM and Sirius together represent 4 percent of the radio listening market. It's bizarre for me to think that anybody could think that in this whole area of audio entertainment there isn't plenty of competition, and new competition coming every day. Not only do we compete with all of the radio stations that exist, we also compete with all of the other alternatives that have come along since we've gotten our license.
We currently compete with free [radio].
You're listening to this boring AM and FM radio that's around. And one day, you want satellite radio, or you buy a car that has satellite radio, and after a trial period you decide you don't want to have satellite radio, and then you go back to free. So when we compete with free, we're more apt to get a subscriber at $6.99 than at $12.95. So when you're a company that has lost all of this money, and we are continuing to lose money, the ability to reduce prices -- which is what we would like to do -- doesn't happen.
The way it happens is through this merger. The efficiencies have been estimated between $3 [billion] and $9 billion. Our plan would be that we would offer consumers lower prices and more choice. By giving them lower prices and more choice, including a la carte offerings, we think that serves the public interest. From our point of view, the merger should be a no-brainer.
Tribune: What happens if the FCC does not approve the merger?
Karmazin: Sirius will sue.
Tribune: Was the Howard Stern deal a winner? He all but credits you for saving his life, his career.
Karmazin: I'm not sure I'd like to be known for that. Howard got $80 million a year in cash. To make that deal work, you need a million subscribers paying $120 a year or $12.95 a month.