Mel Karmazin just told the House Judiciary Committee antitrust task force that if terrestrial radio is not competing with satellite radio, then "they are lying" to the SEC.

Just as a reminder to those who didn't catch it - several terrestrial radio companies have stated in their own SEC filings that satellite radio (as well as Internet radio, and MP3 players) directly competes with terrestrial radio. These statements constitute admissions by law.

I'm really happy that Mel has driven home this point. 

There's something I would like to briefly highlight from a previous post, that I think deserves a post of it's own. And that is that CBS Radio (and other broadcasters) actually have already defined the competitive landscape in their SEC filings.

Here's a snippet from CBS's 10-K (with emphasis added):

Radio Competition.
The Company's radio stations directly compete within their respective markets for audience, advertising revenues and programming with other radio stations including those owned by other group owners such as ABC Radio, Clear Channel Communications, Cox Radio, Emmis Communications, Entercom and Radio One. The Company's radio stations also compete with other media, such as broadcast, cable and DTH satellite television, radio, newspapers, magazines, the Internet and direct mail.

The radio industry is also subject to competition from two satellite-delivered audio programming services, Sirius Satellite Radio and XM Satellite Radio, each providing over 100 channels of pay digital audio services. Sirius and XM sell advertising time on some of their channels and compete with the radio industry for programming.

The Company's radio stations face increasing competition from audio programming delivered via the Internet and from consumer products such as portable digital audio players. These new technologies create new ways for individuals to listen to music and other content of their choosing while avoiding traditional commercial advertisements. An increasingly broad adoption by consumers of portable digital audio players could affect the ability of the Company's radio stations to attract listeners and advertisers. 

 

The statements made in these SEC filings would constitute admissions under the law. So they can't just go ahead and oppose a proposed market definition, or to just limit it to the satellite radio market (making it a 'monopoly'). They would look pretty damn silly if they try to contradict themselves.

The biggest "hurdle" in the merger is the definition of what is a "relevant market" and what constitutes a competitive marketplace. But CBS Terrestrial Radio has actually already adopted the same definition that XM and Sirius are advocating.

This is pretty big stuff in my opinion, and I hope the media picks up on it. 

UPDATE: Thanks to the work from several commenters, the 10-Ks from Radio One, Cox Radio, Entercom, and Clear Channel all also define the relevant market as including satellite radio as well as other audio entertainment sources like Internet radio and DAPs.

My favorite radio publication, Inside Radio, polled some radio CEOs about the Sirius-XM Merger. Guess what they had to say? Nothing but good things, of course...

Cox Radio CEO Bob Neil says "If it is approved, and I don't think it will be, it would be one of the most anti-consumer mergers ever allowed in business."

Triad's David Benjamin says "It further confirms that the business plan for satellite radio is just not working. No one was talking about a merger before subscriber targets and break-even points were being missed," Benjamin added "The two big winners in this are the investment bankers and the lawyers."

Connoisseur CEO Jeff Warshaw said "I can't imagine that it's in the public interest. It would be tantamount to a government bail-out of an industry (satellite radio) that has been ridiculously mis-managed. It is inappropriate for local radio to be disadvantaged by such a bail-out."

...yet the curious thing is that in SEC filings (e.g., CBS Corp's 10-K) made by terrestrial radio corporations, it's clearly stated that satellite radio is in direct competition with terrestrial; as is Internet radio and digital audio players. That opens up the argument that satellite radio is part of a greater audio marketplace.

Can't have it both ways boys. Either we're competition, or we're not. But since it's already in your filings, which constitute admissions under the law, then you've already defined the marketplace for us. So thanks.

Thanks Mark! 

Well, that didn't take long. The NAB has issued a statement today in response to the proposed merger between Sirius and XM. NAB Executive Vice President Dennis Wharton had the following to say:

"Given the government's history of opposing monopolies in all forms, NAB would be shocked if federal regulators permitted a merger of XM and Sirius. It bears mentioning that regulators summarily rejected a similar monopoly merger of the nation's only two satellite television companies -- DirecTV and DISH Network -- just a few years back.

"When the FCC authorized satellite radio, it specifically found that the public would be served best by two competitive nationwide systems. Now, with their stock prices at rock bottom and their business model in disarray because of profligate spending practices, they seek a government bail-out to avoid competing in the marketplace.

(...and the kicker:)

"In coming weeks, policymakers will have to weigh whether an industry that makes Howard Stern its poster child should be rewarded with a monopoly platform for offensive programming. We’re hopeful that this anti-consumer proposal will be rejected."

So it looks like the NAB is going to play the indecency card on this one.  

Apparently terrestrial radio isn't so happy about American Public Media's deal with XM Satellite Radio.

While the cornerstone shows "A Prairie Home Companion" and "Marketplace" are still going to be syndicated to terrestrial stations, the perceived problem is that they'll no longer be exclusive to terrestrial. Maybe someone should have told them that Prairie Home and Marketplace were available on Sirius' NPR Now (ch 134) for a while now.

But just to add some salt on the wound, Prairie Home Companion will actually air live on XM before some terrestrial stations get the West Coast feed. Now that's gotta hurt.

[Inside Radio] 

The NAB has renewed their plea to the FCC to issue a complete recall of "unlawful" satellite radio receivers.

Last year the NAB whistled the same tune in a similar letter to the FCC, and later a letter to both Sirius and XM. Apparently causing XM and Sirius a massive disruption in production isn't enough for NAB president David Rehr. No, now we need an all out recall of all satellite radios that are "interfering" with FM.

In his letter, Rehr is particularly concerned with listeners of public and religious programming being subjected to explicit and "unwelcome" programming - particularly "The Howard Stern Show." And as expected, Rehr referred to a recent New York Times article to back up his claims that this is going on.

It's obvious that the NAB is quite pleased with themselves with what they were able to pull off last year, and they're not going to stop pressuring the FCC for more drastic measures. Afterall, who needs to compete in the marketplace when you can just use political pressure to get the job done for you?

[View Letter (PDF) via MediaWeek] 

(For you lazy clickers, you can read full text of Rehr's letter after the jump...) 

Motorola just unveiled the new SLVR L9, which delivers a sharpened focus on multimedia than previous versions. The new SLVR integrates FM Radio (with RDS), support for MP3/AAC/AAC+/AAC+ enhanced/AMR/WAV, and A2DP stereo Bluetooth. It also includes microSD and MegaSIM storage capabilities.

We don't know yet where the SLVR L9 will be made available, but it supposedly will be out sometime in Q2.

Food for thought:
There's going to be a rise in acceptance by the consumer in thinking of their cellphone as also a music device. Peviously it was a "cute" feature that your cell could play MP3s, but rarely would consumer use it as their prime music device. That's why you have an iPod. But soon we will have the iPhone, and everything will change. Services like Verizon's V-Cast still haven't had much traction either... yet. Over-the-air downloads of music will have an uphill battle ahead of them, but it's inevitable that it will grow in popularity.

But what happens when you throw in something like FM Radio with RDS support? Suddenly the lines blur. Mixing your MP3s with free radio is a powerful value added to the consumer.

Sirius and XM both have a big foot in the door with their respective deals with Sprint and Cingular (err, AT&T). Right now they don't give much to the bottom-line, but they're a stepping stone to the future of music listening. The question is, what are Sirius and XM doing with this foot in the door?

[Engadget]

So this is funny. While it was recently announced that HD Radio inked a deal with Sharper Image, there looks to be a bit more motivating the partnership than meets the eye.

Sure, HD Radio gets another retail outlet (with prominent placement in stores and catalogs), but the reality is that Sharper Image gets to piggyback on the $250 million HD Radio ad campaign. Something they desperately need.

Now, it's not that barter is a new concept. Just that this isn't the grand success that terrestrial is making it out to be. If this was such breakthrough technology, it would be something that retailers would be seeking out - not bartering over.

(Kudos to Hear 2.0 for figuring this one out.)