They're not done yet.

The Carmel Group, commissioned by the NAB, has released yet another "ping-pong" chart to show that Sirius and XM directly compete with each other.

A follow-up to an earlier study by The Carmel Group, this features a more in-depth "ping-pong" chart than before with a huge list of competitive actions and reactions between the two companies.

The study asserts that "without this continued competition, consumers will not be able to obtain substitutable competition from competitors within the all-important vehicle; and importantly, choice, competitive pricing restraints and service will undoubtedly - and significantly - suffer."

And of course, NAB spokesperson Dennis Wharton had his pom-poms in hand with this to say:

"Contrasting XM and SIRIUS's history of competitive behavior with their track record of abusing FCC rules, the central question remains: Should two fierce competitors with a demonstrable record of FCC rule-breaking be rewarded with monopoly power? We -- along with consumer groups, minority organizations, antitrust experts and more than 80 members of Congress -- think the answer is no."

Following the April study release, I discovered an earlier article written by The Carmel Group that was not commissioned by the NAB which stated that satellite radio's "competition comes in the form of traditional analog AM & FM radio, as well as burgeoning services like MP3 players, terrestrial radio, and video- and Internet-to-the-vehicle." This was, in my opinion, a completely opposing position from the NAB-commissioned study. A point that caught the attention of the New York Post.

Now The Carmel Group is back with an extended "ping-pong" chart to prove that Sirius and XM did indeed compete with each other.

But, so what?

Proving that Sirius and XM compete(d) with each other has little to do with disproving that they are part of a broader relevant market. If two radio stations in a single market compete with each other, does that mean that they don't compete with other radio stations in the same market? Of course not.

Further, observing the competitive responses between those two radio stations won't give us any insight into the "continuing proliferation of outlets and rapid pace of technological change in the media marketplace" that the NAB is so worried about.

So all the "ping-pong" charts in the world are simply just exercises in futility.

[The Carmel Group Study (PDF) via AllAccess]
Thanks Derek!

The Arbitron ratings have really caused a stir, which is not surprising since this is the first time we've seen any public ratings of any kind for Sirius and XM.

And of course, usual suspects are jumping all over it. This from Inside Radio:

Howard Stern then: 20 million listeners. Today: 1,225,100.
That's Stern's weekly cume according to Arbitron's first-ever report detailing listening to XM and Sirius. It shows his $500 million contract with Sirius buys the company an average 96,700 listeners in any given quarter hour. While his audience is just a fraction of what it once was, his "Howard 100" channel is satellite radio's top-rated, delivering more listeners than any other channel.

Now I'm not going to say it's "unfair" to compare satellite radio ratings with terrestrial ratings, but I am going to say that the comparison is useless. It's not about listeners, it's about subscribers.

That's part of the benefit of satellite radio. Not being dependent on ratings and constantly trying to boost your cume/AQH/TSL gives broadcasters artistic freedom and allows them to drop the gimmicks. That's part of the reason why the best broadcasters from terrestrial have made the jump to satellite.

And that's part of reason why we all subscribe, because the B.S. of regular radio - which is ultimately meant to drive ratings - is not prevalent on satellite radio.

Congressman Rick Boucher (D-VA) wrote a detailed op-ed piece that was published in Roll Call this morning.

Roll Call, which is published Monday to Thursday while Congress is in session, provides readers with news of the legislative and political maneuvers that occur on Capitol Hill.

In his piece, Rep. Boucher voices his support for the Sirius-XM merger, and points to his reasons as to why the merger would be in the public interest and why the relevant market should be considered in the broader sense.

"In the radio marketplace of both satellite and terrestrially delivered radio services, XM and Sirius occupy less than a 4 percent share of listeners. The balance is held by AM and FM stations. In the broader audio entertainment market of radio and Internet-based news and entertainment, XM and Sirius have an even smaller share. When one concludes that the broader market is the proper measure, it is clear that the merger would not hinder competition."

Now the real interesting part isn't just that Rep. Boucher is lending his support behind the merger. It's not even his arguments that are the point of interest here.

It's the lack of an opposing argument in this issue of Roll Call.

This op-ed piece was featured in the "Communications and Intellectual Property Policy Briefing" section of today's issue. Five subjects were covered in a similar format, and each had a point/counter-point argument.

Only the section on satellite radio ran without a counterpoint.

Apparently Roll Call couldn't get a counterpoint for this piece? Given the NAB's supposed influence on the Hill, this is very surprising.

Read Rep. Boucher's Op-Ed piece here (PDF).

FCC Chairman Kevin Martin has circulated a proposal to the other four commissioners that would relax long standing media-ownership regulations, including ease the limitation on the number of newspapers, TV and radio stations that companies are allowed to control in a particular market.

Martin wants to expedite the agency's review of media-ownership rules, hoping to conclude the long-running proceeding in November and a vote to be scheduled on December 18, FCC officials said today.

In the past, Martin has said he is in favor of scrapping a rule that prohibits one company from owning a television station and newspaper in the same market.

“We’ve had six hearings around the country already; we’ve done numerous studies; we’ve been collecting data for the last 18 months; and the issues have been pending for years,” Martin told the New York Times. “I think it is an appropriate time to begin a discussion to complete this rule-making and complete these media ownership issues.”

Martin's predecessor as FCC chairman, Michael Powell, previously attempted to radically loosen the limits on media ownership in 2003. And failed. It was halted by the 3rd Circuit Court of Appeals which ruled the FCC hadn't justified its attempt at reform sufficiently.

Martin may take a more drastic approach.

Blair Levin, a telecommunications analyst at Stifel Nicolaus told Bloomberg that Martin will likely be willing to reach a compromise with the two Democratic FCC panel members, who have expressed strong concerns over the issue of media ownership.

Commissioner Michael J. Copps, as we know, is adamantly opposed to loosening media consolidation rules. Jonathan S. Adelstein, the other Democrat on the FCC, has said that the agency first needs to address other media issues, including encouraging improved coverage of local events and greater ownership of stations by companies controlled by women and minorities.

Levin feels that some action on trying to facilitate greater access to the airwaves by minority groups and women could form part of Martin's compromise.

As advertising dollars shift from print newspapers to the Internet, the newspaper industry has undergone a wave of upheaval and consolidation (and, let's face it, a loss of jobs). Especially since online advertising dollars don't nearly produce the same amount of revenue as print ads did (and the level of accountability to deliver a return on investment is increased as well... always a challenge to ad sales folks). This has put new pressure on regulators to loosen ownership rules.

The same sort of logic can be applied to satellite radio and the "audio entertainment" market.

As our eyes and ears increasingly are faced with a widening array of alternatives (fragmentation), the old rules simply don't apply anymore. Technology companies are no longer simply technology companies. They're "media" now. Media companies are no longer confined to the old eco-system either, they need to find your ears and eyes through other distribution channels. Telecom companies look to capitalize on convergence as they provide audio/video services (and content) to mobile phones. Meanwhile the behemoth in the room is the Internet, poised to provide the ultimate distribution platform with little-to-no barrier to entry. And so on.

Distribution is increasing becoming less of a differentiator in the market. And that's at the basis of this debate.

The fact that Martin wants to get this through by mid-December, coincidentally around the time that the Sirius-XM 180-day window is expected to close, might very well say something about Martin's overall intentions.

[New York Times, Bloomberg]
Thanks Karl!

While much of the media focus revolves around super phones like the iPhone or the Voyager, the reality remains that most consumers just want cheap (or free) phones and cheap service. So Motorola has come out with a fresh crop of decidedly low-end phones to appease the critical masses.

Enter Motorola's new "W series" phones.
And the W160, W180, W213 and W377 (pictured above) all feature integrated FM radios.

Motorola said the phones, which would sell at an affordable price point, are meant for people who just want to talk and send text messages on easy-to-use phones or who are looking to upgrade their basic cell phones.

For many future W series owners, this will be the first - and only - handheld FM radio they own. Sure, some people might have a handheld FM radio to listen to the game - but most people don't see the value at carrying around a radio with them. Radios aren't something you buy, they just happen to be there. But with an integrated radio in a common everyday phone, now it's just automatically in their pocket.

Satellite Radio needs to get into cell phones just as much as they need to get into vehicles. I'm not talking about piggy-backing on the carrier's networks, but integrating the chipset into phones so people can experience the full service. Integration is the key. The problem with satellite radio - and it's a big one - is the lack of reception indoors. In order to be integrated into people's lives, and into their pockets, you need to be available to them everywhere.

[Motorola]

In regular radio, executives tend to depend on research, studies and focus groups (even ones with really creepy names) to determine what they should be programming. They hold meetings, whip up presentations, and put the decisions to a vote. All in the effort to ensure the broadest possible appeal. To be "all things to everybody."

So what happens when everything is left to single person? When one man has absolute control? When corporate has no hand in the decision making? When complete artistic freedom is handed over to someone with absolutely no radio "training" whatsoever?

You get entire articles written about it.

And you get quotes likes this...

"With this show, Dylan is tapping into his deep love -- and I would say his belief in -- a musical world without borders," author Peter Guralnick writes in an e-mail. "I feel like the commentary often reflects the same surrealistic appreciation for the human comedy that suffuses his music." Guralnick has written several books about music, including biographies of Elvis Presley and Sam Cooke.

Keen listener Elvis Costello says Dylan's shows "are a bit like those films of Picasso painting on glass. They don't pretend to explain anything about the host but they offer just a little glimpse of the musical -- and literary -- taste of a great singer and songwriter without obliging him to confess every dark secret."

'Theme Time' is a "surreal hour of radio," comedian Richard Lewis writes in an email.

"I don't mean in any way to diminish the importance of the quality music he plays," says magician and loyal listener Penn Jillette, "but Dylan's heart is so in this show that you hear Dylan even in other people's music."

Oh heavens forbid regular radio actually relinquishes control to artists. Creativity afterall isn't measurable. There's no metrics behind talent. And how could the AEs sell ad spots without metrics?!

The suits at XM have literally nothing to do with the production of Bob Dylan's show. It's part of his contract. Bob Dylan is given complete artistic freedom. They trust him (wow!). The show is delivered, pretty much as a done deal, to the XM studio in New York. "Doing something that would be illegal or filthy is not in his repertoire," says Lee Abrams, XM's chief creative officer.

"The actual recording of it is a big mystery," says Abrams, who usually hears it for the first time when it airs.

And as a result, nearly 2 million listeners tune in to Dylan's show. Not bad for someone who's not a radio-guy. Kind of makes the design-by-committee approach of mass-appeal and pop-tart dynamics seem silly doesn't it?

When try to be "all things to everybody," you end up being "nothing to nobody."

[Washington Post]
(...well worth the read)

NBC's "Heroes" is now in its 2nd season, and the underlying theme of recent episodes revolves around an evolution in humans that's causing its characters to have special powers (uhm, can you tell I'm a fan?). The interesting aspect is that this evolution has been rapidly increased recently, causing more mutations to occur at a faster pace.

Ok, so Sirius and XM are right now arguing that they face competition from other audio services like AM/FM radio (who garner something like 96% of all radio listening... not entirely surprising since radio has been around commercially for around 80 years). In that audio mix, Sirius and XM argue that other options like Internet radio, streaming audio on cell phones, MP3 players and various other audio technologies also serve as competition.

But just like the evolution we see in "Heroes," the evolution of audio entertainment has been rapidly increasing as of late. The options available to the consumer have intensified in just the eight months since Sirius and XM announced their merger.

Even in this short amount of time, there's been an exponential growth in audio devices ("mutations" maybe? I don't know if I can go that far in the analogy, but you get it). So let's take a look at what has affected how we listen to audio, and what will be changing how we define "radio" in the years to come:

iPhone
Of course you have to bring the iPhone into this. Back in 1997 - let alone just 8 months ago - a cell phone was just a cell phone. Now mobile phones come equipped with audio playback, storage and over-the-air streaming capabilities. The consumer looks at a "cell phone" less and less as simply a "phone" and more and more as a mobile access system... and the iPhone personifies that. We all know the iPhone's evolution is not going to stop (it took a couple generations of the iPod before it truly began to take off). Of course, other phones (like the LG Muziq) are equipped with audio capabilities, and that's only going to continue to evolve.

The new iPod series
The new iPod Nano, Classic and Touch bring video and music together. And the Touch, like the iPhone, allows wireless downloads of music directly from the iTunes store in countless Wi-Fi hotspots around the country. Hear a song in Starbucks? Buy it instantaneously. Tag songs heard on HD Radio, and purchase them through iTunes. There's no doubt that iPod/iTunes is its own audio eco-system, and Apple is showing no signs in relenting its continuous evolvution of this platform. More than anything, the iPod has revolutionized how we listen to music (and time-shifted programming like podcasts). And the biggest thing to remember is that the iPod is only 6 years old.

HD Radio
In March 2007, the FCC gave the green light to HD Radio. With this new technology (and a new receiver), radio fans can listen to multiple streams of higher-quality, digital programming. But most radio listening is done in the car, and this hasn't escaped the massive media companies that are pushing this technology. BMW, Ford, Lincoln and Mercury all offer HD Radio receivers as a factory-installed option and Sony has come out with the XDR-S3HD table radio and XT-100HD car radio... and there's more to come.

Customizable Radio
Slacker's "Personalized Radio" enables consumers to customize their own radio stations and listen to them wherever they happen to be. Slacker has been streaming online for a while, and now that it has deals with the all the major record labels, will soon be available via WiFi and in automobiles via satellite.

WiFi DAPs and Radios
With the Sansa Connect, consumers can stream Internet radio from Launchcast stations, browse Flickr photo streams and sign up for Yahoo's portable music subscription service, Yahoo Music Unlimited To Go, to download any tracks or albums over Wi-Fi. Pandora also will have its own WiFi Portable Radio available, where you can listen to the Pandora customizable radio over-the-air wherever you have access. And let's not forget the Phoenix WiFi Radio, which virtually eliminates the need for a traditional alarm clock.

Ford SYNC
The Ford SYNC, which starts shipping in automobiles this fall, allows drivers to control a myriad of audio entertainment options through a single built-in interface. SYNC uses a hands-free in-vehicle Microsoft operating system that can switch seamlessly between devices like iPods, Zunes and cell phones to play MP3s and internet radio services like Pandora or mSpot. Standard on all of Ford's top models – which is about 40% of Ford's sales – it will be available for sale on their other models.

Sprint Xohm
Sprint has announced the roll-out schedule for its nationwide high-speed WiMax network: Sprint Xohm. Sprint plans WiMAX test service in the Chicago, Baltimore and Washington, D.C. areas by year-end 2007. Samsung has been awarded the infrastructure build out for the New York area market, Washington, D.C., Baltimore, Philadelphia, Boston and Providence, R.I. Xohm is expected to be available in a number of markets starting April 2008 and expected to cover 100 million people by year-end 2008 thanks to their partnership with Clearwire. Think WiMax is years away? Think again.

Remember, the world of audio has changed dramatically since Sirius and XM received their licenses in 1997. Even the Sirius-XM merger's biggest opponent, the NAB, has commented about the "...seismic explosion in alternative media sources in the last 30 years..." (Dennis Wharton, Executive VP, NAB, Communications Daily, "Tribune Seeks FCC TV Waivers for $8.2 Billion Sale", 05.07.07).

NAB President and CEO, David Rehr, may have said it best when he stated, "barely a day passes without the introduction of a new competing device or service." (David K. Rehr, 2006 NAB Radio Show, September 21, 2006).

The last eight months shows the pace of the audio evolution, and the ever-expanding array of options available to consumers, continuing to accelerate. And maybe they're not mutations so to speak, but the convergence of devices is growing at an exponential pace, and will forever change the way we listen to "radio" ever again.

Former Radio One/Indiana controller, Denise Redding, has filed a civil lawsuit alleging she was fired because of her race and because she refused to sign off on questionable financial statements, reports the Indiana Business Journal.

Redding, who was employed from 2002 to 2006, claims she was fired three months after she reported to Radio One officials that she would not sign off on the company’s financial statements because she could not certify that they were valid and accurate.

In the lawsuit Redding says that she believed Radio One’s local general manager, Chuck Williams, had inflated revenue reports resulting in first-quarter revenue that was not accurately reported. Her review of the company’s financial records convinced her Williams “may have committed payola violations and actionable fraud.”

Redding also says Williams, “accorded more favorable treatment to similarly situated employees who are male and/or non-African-American,” the Indiana Business Journal writes. She is seeking at least $82,000 in back pay, plus damages for lost benefits and emotional distress.

Radio One, with 60 stations in 19 markets, is the nation’s seventh-largest radio broadcasting company and the largest radio broadcasting company that primarily targets black and urban listeners.

[Indiana Business Journal]

The HD Radio camp is advertising that there are currently over 1,500 radio stations now broadcasting in HD (from its website, to press releases as well as in various other promotions)... but yet only 1,300 have filed with the FCC.

That's according to the Federal Communications Commission's Audio Division Chief Peter Doyle at least. And I'd say he's a pretty good authority on the matter.

At the NAB Radio Show last week, Doyle brought up the issue at a panel discussion, according to Radio Info.

"I keep hearing that 1500 stations are in HD, but only 1300" have filed the required notification with the Commission, said the FCC Audio Division Chief.

Doyle added, "if you're one of the 200, please let us know."

Funny how the NAB calls Sirius and XM's infractions with the FCC as "brazen" and that the companies "cannot be trusted" as a result. The NAB even calls for Freedom of Information Act requests to extract, and likely publicize, any of satellite radio's problems with the agency. But when it comes to their own requirements with the FCC, terrestrial radio conveniently ignores their own responsibilities.

How hypocritical is it for the NAB to scream about XM-Sirius repeater towers - ones that were voluntarily lowered - while there are 200 HD Radio stations that haven't filed with the FCC themselves?

Absoulutely ridiculous.

[Radio Info (PDF)]