Mel Karmazin, gave some more light on the possible "A La Carte" packages and pricing at today's House Judiciary Committee Antirust Task Force hearing on the proposed satellite radio merger.

First, Karmazin clarified that at this time "per-channel" A La Carte packages is not possible in the current infrastructure. In other words, the ability to pick and choose a completely customized subscription (labeled a "consumer advocate's dream") won't be a reality right now.

But what is possible is the choice of tiers based on different consumer interests.

Karmazin also stated that the $12.95 per month pricing is currently the ceiling that is possible for a subscriber. There's "no scenario where we're raising that price," said Karmazin in his testimony.

"What we're also saying is that we'll provide the consumer with a choice to be able to get satellite radio for less than [the current price]," he added.

For instance, in the scenario of a "music only" a la carte package, the consumer could likely pay less than a current satellite radio subscriber does today. I can imagine a "family package" with children/family-friendly programming, a "sports package" with live play-by-play sports, and a "news/talk package" with only (wait for it) news and talk.

More choice, and lower prices. It's rare that you see a merger scenario with those possibilities becoming a reality. 

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. 

When questioned about the XM/Sirius merger in front of the House Judiciary Committee antitrust task force, Mel Karmazin was asked whether he would agree to pricing restrictions for the newly merged company.

"Yes," Karmazin flat out said.

When asked whether he would be able to agree to this for a four year period of time, Karmazin stated that he would be happy to discuss it with the necessary people. There was some joking back and fourth whether the timeframe would span within 2 weeks to 4 years, but in the end no timeframe was actually specified.

Karmazin was also asked whether he would agree to not transmit local content (local news/weather) and he clearly stated that they have no intentions of entering into the local market.

Gigi B. Sohn, co-founder and President of Public Knowledge, testified in front of the U.S. House Judiciary Committee antitrust task force hearing on the proposed XM/Sirius merger. Interestingly enough, Gigi was actually in favor of the merger.

...but on a few conditions:

1. The new company makes available pricing choices such as a la carte or tiered programming.

2. The new company makes 5% of its capacity available to non-commercial educational and informational programming over which it has no editorial control.

3. The new company agrees not to raise prices for three years after the merger is approved.
   

...and I really can't say those are unreasonable expectations. In fact, I fully support them.

The House subcommittee on telecommunications will hold a hearing next Wednesday, March 7th that will include a look at the proposed Sirius-XM merger.

Mel Karmazin will appear before the subcommittee to review the merger and the future of radio.

US Representative Edward J. Markey, a 16-term Massachusetts Democrat who heads the subcommittee (and who was chairman of it 12 years ago), said that over the next two years he will focus on fostering competition that will benefit consumers.

"We're going to go back to the beginning, to begin to talk about the whole nature of these" issues, Markey said. "Now, for the first time I have the gavel back again, and I plan to highlight competition."

Markey also said that under a Republican-controlled Congress and FCC, consumers have suffered with the slow spread of broadband and a lack of competition to telephone and cable companies.

Looks like there may be trouble coming next week.

[Reuters and The Boston Globe]

USA Today has a very nice feature with Sirius CEO Mel Karmazin on the XM/Sirius merger.

From questions about the merged company raising prices, to the sharing of XM-Sirius content, to dual receivers and what exactly the cost-savings are - the Q&A is quick and concise. And hopefully it will answer some of the questions that you all may have.

Obviously there's more questions, and probably not enough answers at this time. That's sort of the way it goes when you have a merger (anyone who's been through one can attest to that). But just remember that we're barely over a week through this... so give it some time.

[USA Today] 

So now that we have the full data from both XM and Sirius for 4Q06, let's look at my favorite metric: gross subscribers. Again, the reason why I like looking at gross subs is because it shows an untainted view of market penetration. 

And what a difference a year makes.

Looking at 2005, it's clear that XM held the dominating position in gross subscriber additions. Even in the fourth-quarter of 2005, XM still held out past Sirius even despite "the Stern Effect" (now being referred to as "the Stern Bubble" by Sirius management). When 2006 rolled around, XM still continued to hold its own, but by Q4 Sirius made a massive jump.

For the first time in satellite radio history, Sirius outpaced XM in gross subscribers for the quarter. This is significant.

Sirius now is at nearly the same number of subscribers as XM was a year ago. In 2006, the reasoning behind XM's poor net subscriber additions was that churn restricted net growth. I'd be interested to see if Sirius follows this trend, or whether they will be able to learn from XM and keep churn in check.

Either way, it's clear that for the moment, the tide has turned.

Sirius Satellite Radio has released their Q4 and full-year 2006 results. Here's the highlights:

• Sirius reported Q4 total revenue of $193.4 million, an increase of 142% YoY
• Sirius' full-year 2006 total revenue was $637.2 million, up 163% YoY
• ARPU was $11.01 in 2006 up from $10.34 in 2005
• SAC was $114 for 2006, from $139 in 2005
• Retail subscribers for the full-year were 4,041,826, an increase of 64% YoY
• OEM subscribers for the full-year were 1,959,009, up 138% YoY
• Sirius had a net loss of $1.1 billion for 2006
• Adjusted net loss was $656.0 million for the full-year
• Adjusted loss from operations for the full-year was $513.1 million
• Free cash flow loss for the full-year was $500.7 million
• For Q4, Sirius had a net loss of $245.6 million with adjusted net loss improved to $203.0 million and adjusted loss from operations improved to $166.8 million.

The earnings call is at 8am ET which I will be live-blogging right here.

As I'm reading coverage on the XM/Sirius merger, there's a common point of reference being brought up when the media looks to find prior parallels, and that obviously is the EchoStar/DirecTV deal.

Understandably because the two seem very similar (I used it myself in the past). Echostar/DirecTV is afterall probably the only precedent to work with. Both involve two companies, broadcasting via satellite, and the only difference is that one does video, while the other does audio. Sounds simple right?

Except that in 2002, the definition of the "relevant market" involved only satellite and cable (also known as the MVPD or "Multichannel Video Programming Distribution" market). Even "free" television is delivered through satellite or cable because receiving television via the ol' rabbit-ears just isn't a viable alternative (so much so that in 2008 the FCC is selling off the VHF side of the spectrum).

EchoStar and DirecTV used the argument of spectrum, and the fact that both companies use the same spectrum for "overlapping programming services," as their main case for why they need to do their merger. They felt that by combining their spectrum, there would be a more efficient use of the available spectrum, and thus they would be able to provide better services to the customer. In terms of pricing, EchoStar/DirecTV would promise to keep their pricing inline with the overall national price of MVPD services. In short: the merger would give them more bandwidth and they promise to stay competitive.

So with only satellite and cable occupying the same space, what is the alternative to consumers who cannot receive one of the two? Cable is fragmented among multiple companies so there's no monopoly there (an arguable point, but I won't get into that), whereas with satellite TV there would be only one player. It would create a monopoly in areas where there is no cable service - and so it wouldn't be "in the best interests" for the public.

There was no YouTube (which even to this day is no where near 'competition' to TV) or Slingbox (which still requires a subscription to cable/satellite) or MediaFLO or video via mobile phones, etc. The Internet and other high-speed services did not provide any reasonable level of a service to be considered as part of the relevant market. EchoStar/DirecTV were without question part of the MVPD market, and even with the advance in technologies it's a pretty hard case to try to redefine their competitors. But the main problem with the EchoStar/DirecTV merger attempt the argument of spectrum efficiencies just wasn't compelling enough for the FCC.

With satellite radio, there's plenty of coverage from terrestrial radio, not to mention all the other mediums vying for your "earshare" (I really like that term by the way). And the competition for satellite radio is largely free competition, not other pay-services. So prices are theoretically kept in check by the laws of good ol' capitalism (rather than mandated, though I'm sure XM/Sirius are open to government mandated pricing restrictions). XM/Sirius have two main hurdles they need to overcome to get this to pass: Redefining their market (DoJ) and ensuring that they're serving the public's best interests (FCC).

So when Michael Powell says, "It’s going to be incumbent on the companies to demonstrate that the analysis in EchoStar-DirecTV is different." Then that case is pretty much a slam dunk.

Both Sirius Satellite Radio and XM Satellite Radio are celebrating the Oscars with special programming surrounding the star-studded event.

On Sunday... 

First there's Sirius Variety News on the Los Angeles channel (ch 150) where you can tune in multiple times each hour all day on Sunday for up-to-the-minute breaking news and views on the Oscars, as well as a red carpet play-by-play including the night’s the winners and losers.

Then, at 7:00pm ET on Sirius OutQ (ch 109) join Frank DeCaro and Doria Biddle as they handicap the gay Super Bowl with a panel of "statuette polishers" and "red carpet munchers." Village Voice columnist Michael Musto, Broadway playwright Douglas Carter Beane, and movies.com critic Dave White join “The Queen” and “Little Miss Sunshine” for 60 minutes of bicoastal Oscar night fun.

On both Sirius and XM, starting at 6:00pm ET, E! Entertainment Radio (Sirius ch 107 / XM ch 162) hosts Ryan Seacrest and Guilianna Depani host live from the Red Carpet and give listeners all the Oscar scoop, plus the skinny and not-so-skinny, leading up to the big event.

Then on Monday...

Martha Stewart Living Radio (ch 112) will air the Morning Living special: “The Morning After” the Oscars at 7am ET. Joining host Lauren Pressley on the air are several very special guests: ABC-TV’s Sandy Kenyon reports live from Hollywood; Jaret Wieselman from In Touch Weekly offers complete Oscar® analysis; New York beauty expert and renowned hair and makeup artist Eva Scrivo talks about the hair and make-up of Oscar® night, and Jayne and Jennifer from A Fashionable Life Radio dish on the best and worst dressed.

Then at 10:15 am ET on Cosmo Radio (ch 111), Wake Up with Cosmo Radio Michael O’Rourke - founder of Sexy Hair Concepts and Carlton Hair International – joins host Taylor Strecker to discuss the good, the bad, and the ugly: the Oscar hairstyles and hair trends of the night.

Oh but the coverage doesn't top there on Cosmo Radio, because at 10:30am ET, celebrity makeup artist and creator of the LORAC makeup line Carol Shaw joins in the fun on Wake Up with Cosmo Radio to give listeners the full Academy Awards beauty recap.

Meanwhile, on XM, listen to Cinemagic (ch 27) all day for movie segments from Sunday night's Academy Award-winning films, as well as Oscar winners from the past.