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January 27, 2005
Will Karmazin sell out Satellite Radio?
There's no question that Sirius has been spending a ton of loot lately, what with big salaries and half-billion dollar deals being thrown around. Yesterday's announcement about the big 4th Quarter Loss made the reality of the situation, only more real.
But a Daily News article points out that Mel has some big plans for advertising on Sirius. Right now, advertising at Sirius accounts only for less than $1 million of its $67 million in sales. But Karmazin said he's planning on beefing up Sirius' ad sales force, and predicted that ads will become a much bigger part of the business. The article seems to praise Mel for the move, and while it's a revenue stream that Sirius would definitely benefit from, I have to wonder about the possible underlying effects.
With big advertisers like Heineken, Snapple and Dial-A-Mattress supposedly in the works, how long will it be before the commericials leak out of the 55 talk and news stations and into all the other non-commericial radio stations? If Mel sees a need to boost revenue significantly, maybe he won't consider the subscription profits to be the cash cow, and instead sell out significant ad space to advertisers (much like magazine subscriptions).
Bottom line. Are we going to have to listen to 20-minutes of Dial-A-Mattress commercials all over again?? I hope not, but there may be no choice.
January 27, 2005 04:43 PM
Comments
I listen to the sports talk stations a lot and there is already a lot of empty space on ESPN and ESPN News that they fill with audio loops while waiting for the show to return. Syndicated shows like Mike & Mike, PTI, etc already have a place for commercials so if SIRI chooses to fill it I say "GO AHEAD" and keep my subscription price down. If my .67 per share investment increases too than that's a bonus ;-)
Posted by: Jim at January 28, 2005 09:19 AM
Sirius rules! Remember when Xm played commercials?
Posted by: stan at January 28, 2005 04:57 PM
