Solidifying earlier thoughts about how each of the Commissioners might vote, a recent piece in Bloomberg highlights key opinions that Deborah Tate might be the swing vote in the merger between Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.As a refresher: Deborah Taylor Tate is one of three Republicans on the five-member Federal Communications Commission. And, well, this all comes down to politics (doesn't everything?).
"It's not clear what she would want," said Stifel Nicolaus & Co. analyst Blair Levin, a former FCC chief of staff who is based in Washington. Republican FCC Chairman Kevin Martin recommended approval of the merger on June 16th, and the remaining Republican member, Robert McDowell, "pretty clearly" will vote for the takeover, Levin said.
But the agency's two Democrats, Copps and Adelstein, have consistently opposed media consolidation. So opposition is more probable from them - though not a given. Assuming that Copps and Adelstein continue to lean towards a blanket position against any consolidation of major media, then that would give Tate the decisive vote.
"The attention focused on Commissioner Tate in this merger suggests that at least the parties themselves believe she is undecided," said Paul Gallant, an analyst for Stanford Group in Washington and a former FCC official.
Tate has historically fought against childhood obesity and broadcast indecency. She is "a leading voice on issues affecting families and children," according to her biography on the FCC's Web site. Using that as a base assumption, I would figure that Sirius-XM are highlighting their proposed family-friendly packages. And even though satellite radio is known for it's "raunchy" content (that's what makes the headlines at least), it does offer child-centric content that you literally can't get anywhere else (e.g., Sirius Kids Stuff and XM Kids).
While Tate usually votes with her Republican colleagues, she has sometimes split from Martin and opposed him on two cable regulations late last year.
"She's known to be consumer-oriented, and yet she's a loyal Republican, so it's a tough one for her," said Howard Liberman, an attorney at Drinker, Biddle & Reath LLP in Washington who represents New York-based Primosphere Limited Partnership.
Additionally, Tate has said she encourages market-based solutions, with competition ensuring consumer benefits.
"I find myself trying to figure out how to balance the needs of the consumer with the needs of industry," Tate said in April 2006. "It's not always easy."
[Bloomberg]
UPDATE: Sirius-XM has most recently held meetings with XM Satellite Radio (PDF), the National Council of Women's Organization (PDF), the Parent-Television Council (PDF), and the National Tax Payer's Union (PDF) -- all urging for approval of the merger. In addition, the RIAA also met with Commissioner Tate (PDF).
Just say............ NO!
JUST MAKE A DECISION
Just say............ NO TO THE NAB!
She will vote in the affirmative. She is a reasonable person.
All this time,and it all comes down to her and her ego,forget all the meetings and reviewing thousands of pages of paperwork.This could have been done three months ago.The FCC should be ashame of themselves delaying this merger.
She will vote in the affirmative. She is a reasonable person.
ouch
Call me irresponsible ....Call me irresponsible...... Darling!
I still say my Main Man, John Adlestien votes YES..... I like the wonky guy and hope I like him after the vote!
Adlestien for Chairman ..... I'm making posters right now!
---
Ms. Tate .... if you prefer naughty girl spankies from an older, dignified yet personable gentleman, I'll gladly oblige you for a yes vote today!
Is it possible that they could just drop an announcement of approval any day or do they have to announce a special meeting, etc... ?
FCC Martin has said earlier that he was looking to get this thing to a vote by June 30. My guess is that there will be a vote by Wednesday of next week. They'll then be unavailable for a comment due to the July 4th holiday. I'm looking for an approval with some prearranged concessions on the part of XM-Sirius, but nothing like what the NAB and Georgetown Partners was gunning for.
I spoke to one of the women at the FCC who's name is at the bottom of the page for XM and Sirius and she said it is likely that the draft document will be negotiated. Which means more time. She also said that there is no rule as to when the comissioners have to vote.
Call them yourselves, you'll see.
Tate appears to be having a problem balancing the needs of the CONSUMERS and the needs of INDUSTRY. I thought the needs of industry were the jurisdiction of the DOJ while the FCC looked out for the public interest. Tate needs to get her priorities in order and stop trecking on DOJ property already decided. Stop listening to the "competition" arguments of the NAB or that the satrads don't keep their promises. The NAB is starting to sweat a merged satrad and potential buyout by Microsoft as both compete for ears on wheels.
I've decided to Move to China.....The US is becoming the "armpit" of the world
Ron & Fez 12 to 3
THIS IS OLD INFORMATION.........ORBITCAST IS PATHETIC......THIS WAS OUT LAST WEEK.......IN THE MEAN TIME NO ONE IS VOTING......LET ME GUESS ITS NOW GOING TO BE EXTENDED UNTIL SEPTEMBER......
THIS IS OLD INFORMATION.........ORBITCAST IS PATHETIC......THIS WAS OUT LAST WEEK.......IN THE MEAN TIME NO ONE IS VOTING......LET ME GUESS ITS NOW GOING TO BE EXTENDED UNTIL SEPTEMBER......
hmmmm...what is the right thing to do? the most unasked question in Washington.
I hope commissioner Tate has some integrity and won't be swayed by the politics of Washington. Why is it we 'little people' never have a real voice?
TALK TO HER !!!! Call Commissioner Tate 202 418-2500 and tell her why you want a merged Sirius/XM.
You BET - talk to her! Tell her to vote to BLOCK the merger and keep satellite radio competitive. Without the competition, it is dead. Tell her to block the merger because neither of the companies has established a good compliance record and they don't deserve a monopoly.
Hey AC 12:35, Satellite radio competes with:
Standard AM/FM Radio (Free)
HD Radio (Free)
Internet Radio (Free)
iPods
They have a marketshare of 5%, how is that a monopoly?
"I've decided to Move to China.....The US is becoming the "armpit" of the world"
China is the grundle of the world.
"You BET - talk to her! Tell her to vote to BLOCK the merger and keep satellite radio competitive. Without the competition, it is dead. Tell her to block the merger because neither of the companies has established a good compliance record and they don't deserve a monopoly."
-------------------------------------------------------------------------------------------------------
The FCC hates Terrestial Radio because of Millions of $$$ received in PAYOLA over the years and the fact that AM/FM/HD radio refuses to pay royalties to org. like the RIAA.
Terrrestial Radio has not had competition for 80 years , will the merger competition
will be real and AM/FM/HD radio will Die a slow death . They will go the way
of UHF/VHF TV. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
pixie you're not seeing the point - if you can consider an industry as "dying" when, despite all its best efforts, satellite radio has only been able to claim 5 - 6% of the audience after 6 years, there are sure a lot of businesses that would LOVE to be DYING doing that well! VHF/UHF TV is doing just fine as well. Where do you get the idea that they are struggling? They can't rake in the money fast enough!
Ms. Tate... rec'd your call, see you tomorrow.
Gents.... price action and decreasing spreads suggest to me at 2:20 p.m. that there may be a leak, and that this turd we call the FCC may finally be having a bowel movement.
Action (buying of XM) suggests positive news is at hand.
Spanky -
I Phuckin hope so, even after losing a truck load of cash, I still feel like I have the balance of it all on Black on Roulette wheel.
On my last leg, can't take anymore !
"satellite radio has only been able to claim 5 - 6% of the audience after 6 years, there are sure a lot of businesses that would LOVE to be DYING doing that well! VHF/UHF TV is doing just fine as well. Where do you get the idea that they are struggling? They can't rake in the money fast enough!"
---------------------------------------------------------------------------------------------------------
Well if that's the case. Why is NAB so terrified of Satellite Radio they are spending
10's of millions lobbying against a service that has barely made a dent into the
$$$ terrestial radio is making???. Why are they trying to pit all of congress against the
merger ??? why are they doing everything including getting their buddies at Goldman
and BOA to trash the stock ?????? Answer those questions , WHY ?
Would be nice to see Sirius close above $ 2.00.
Can't believe I just said that.
I don't think I could take another disappointment. Doesn't matter if it closes above 2 if it's going to get slammed down on a disappointment on outcome or more delays. I hope this is a leak on positive news.
Sirius up to $2.10 at the close of trading. 15% increase, most of it coming late in the day. I hope something is up.
At 4:17 P.M. there is no FCC time clock posted for the XM-Sirius merger.
It has been removed. I don't fucking believe it. Just when I thought I'd finish my perpetual motion machine before the FCC ruled.
Oh crap! Time to make more bullshit filings to beat the share price back down...
HD Radio * It's time to UPGRADE!
HD Radio * It's free, it's here, It's local, it sucks! UPGRADE NOW!!!!!
Quit complaining about "anti-competitive". That is over and done with. The only thing she has to wrestle with is have they made concessions in the public interest. The answer is yes, they have. This move is PRO-CONSUMER, and the Justice Department said that it is still competitive with no restrictions.
I personally think the merger will pass 5-0.
What timeclock? Plow?
Quote - At 4:17 P.M. there is no FCC time clock posted for the XM-Sirius merger.
It has been removed. I don't fucking believe it. Just when I thought I'd finish my perpetual motion machine before the FCC ruled.
What are you talking about? It's right here....
http://www.fcc.gov/transaction/xm-sirius.html
You boob.
Deborah Taylor Tate say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
It's not a monopoly. That has been determined, and is not within the scope of debate for the FCC. Get over it.
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. It sucks! DISCOVER IT!
www.hdradiosucks.com/
Deborah Taylor Tate say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme. Deborah Taylor Tate HATES MONOPOLY's
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
"It's not clear what she would want," said Stifel Nicolaus & Co. analyst Blair Levin, a former FCC chief of staff who is based in Washington.
WAIT...WAIT....WAIT...WAIT.... "It's not clear what she would want,"
This is what's wrong with this country. I'm tried of what politicians "WANT" how about what's good for the country?? They've had all this time to review and poll consumers about how they feel. As soon as the Justice department approves it all of a sudden everyone comes out of the wood work about what they "WANT" if the merger goes through... WHAT? Where the hell were you when you were able to voice your opinion when it was your turn? Asking a company to give up a portion of it's product to improve it self? Did they ask Comcast to give up a portion of it's business when it took over all of Philadephia? How about asking Clear Channel to give up a portion of it's Ticketmaster monopoly years ago? Guess they missed that? Forget them I'll go buy tickets somewhere else since it's been forever and someone else is selling tickets now. Oh wait..I still can't do that.... How about getting my cable from someone else...Oh wait...I can't since Comcast has monopolized most of the Sports teams on their channels... Guess someone missed that.... Now if I am tired of paying for Sirius or XM at least I can listen to the music through other outlets... But this seems to be a hot button with polticians all of a sudden... Worrying about how we get our music? Sounds like the typical lobbyist game that has been going for years. Want to talk about fixing a real problem... How about getting rid of Lobyists and making our government accountable for understanding all the petitions that come through and make an educated decsion for once.
What she wants? You've had over a damn year to decide this issue....what's the delay? How much more time do you need to decide? Honestly, would anyone still have their current job if they took this long to give the boss' a decision? I would have to say no...unless you work for the government...
Anonymous cowards can suck my balls
When the FCC authorized two satellite radio operators in 1997, it specifically prohibited the nationwide systems from merging.
XM and Sirius have shown a blatant disregard for FCC rules.
The bad business decisions of these companies do not necessitate a government bailout by allowing a monopolistic merger.
A merger between the only two satellite radio companies is a guaranteed headache for consumers.
Local broadcasters do not compete with XM and Sirius in a national market.
Not long ago a similar merger between satellite television companies DirecTV and EchoStar was rejected by the FCC because of anti-competitive concerns.
Wake up satradio fanboys
http://www.xmsiriusmonopoly.org/
"Local broadcasters do not compete with XM and Sirius in a national market."
Then why are they so worried about the merger?
They are worried about the merger because when its passed, they will have stronger competition.
How typical that satradio fanboys like Gil feel the need to get rude and crude, since the TRUTH is CLEAR.
Deborah Taylor Tate say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme.
XM-SIRIUS MERGER CONSTITUTES A MONOPOLY
Gregory Sidak, a former Deputy General Counsel for the FCC, was asked by the Consumer Coalition for Competition in Satellite Radio to determine whether subscription-based satellite digital audio radio services ("SDARS") are a relevant product market for antitrust purposes, and to assess the unilateral pricing effects of the proposed merger in the relevant product market. Sidak finds that 1) SDARS are a distinct antitrust product market; 2) The proposed merge would be anti-competitive as (i) it constitutes a monopoly under the most reasonable market definition and (ii) even under a more expansive market definition the proposed merger would increase seller concentration ratios to unacceptably high levels; 3) The majority of efficiencies identified by XM and Sirius would not benefit consumers; and 4) The conditions offered by XM and Sirius would not preserve consumer welfare.
http://www.benton.org/node/5352
"Consumer Coalition for Competition in Satellite Radio" is the NAB in disguise.
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. It fucking sucks! DISCOVER IT!
www.hdradiofuckingsucks.com/
Quote - At 4:17 P.M. there is no FCC time clock posted for the XM-Sirius merger.
It has been removed. I don't fucking believe it. Just when I thought I'd finish my perpetual motion machine before the FCC ruled.
What are you talking about? It's right here....
http://www.fcc.gov/transaction/xm-sirius.html
You boob.
Posted by: electriceelshit | June 27, 2008 4:31 PM
-----------------------------------------------------------------------------------
You are an idiot. It is still there.
GO LOOK FOR YOURSELF.
but the DOJ ruled it non-anti trust so this arguement is moot
didnt DOJ rule with NO conditions that this is not a monopoly(not anti-trust)
But but but...
ITSA MONOPOLY...!!!!!11111111111oneone
But but but...
ITSA MONOPOLY...!!!!!11111111111oneone
But but but...
ITSA MONOPOLY...!!!!!11111111111oneone
Deborah Taylor Tate say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme.
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
HD Radio offers "immense opportunities" for consumers who are becoming more selective and protective of their choices. People want new, unique content. They want niche channels "playlist variety and format diversity." Automaker deals and new technology that lets stations upgrade to HD at a lower cost.
No To Monopolies; No To Sirius/XM Merger
http://www.freepress.net/node/40795
HD Crap Radio • IT'S TIME TO UPGRADE!
HD Crap Radio. It's here. It's local. It's free. It fucking sucks! DISCOVER THE CRAPTASTICNESS!
www.hdcrapradio.com/
HD Crap Radio offers "immense opportunities" for suckers who are falling for snake oil marketing. Suckers want new, unique commercials. They want niche commercials, "commercial variety and commercial diversity." Automaker deals and new commercials that lets stations upgrade to HD with more commercials.
Wow that's crafty of you Anonymous Coward. Sadly your craftiness isn't going to make a difference to HD Radio being the future of digital radio.
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
Wow that's crafty of you Anonymous Coward. Sadly your craftiness isn't going to make a difference to Sirius being the future of digital radio.
HD Crap Radio • IT'S TIME TO UPGRADE!
HD Crap Radio. It's here. It's local. It's free. It fucking sucks! DISCOVER THE CRAPTASTICNESS!
www.hdcrapradio.com/
Sorry Anonymous Coward Sirius is not the future of radio, thats a well known FACT. Your ignorant posts will not help.
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
Deborah Taylor Tate say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme. 0.0.
Boys, boys, yes ...I'm a boob, but I'm old too! Here's my link... swear to God it was here earlier in the week. I wouldn't shit about something like this...
http://www.fcc.gov/transaction/xm-sirius-clockhis.html
TO Grandpa Plowboy:
I guess your someones favorite turd, the link below says nothing has been done since June 2008.
http://www.fcc.gov/transaction/xm-sirius.html
I guess the FCC is full of something from a dark place.
No FCC clock = NO! to Melvin Alan "Mel" Karmazin "merge" MONOPOLY scheme.
Sorry Anonymous Coward HD Radio is not the future of radio, thats a well known FACT. Your ignorant posts will not help.
HD Crap Radio • IT'S TIME TO UPGRADE!
HD Crap Radio. It's here. It's local. It's free. It fucking sucks! DISCOVER THE CRAPTASTICNESS!
www.hdcrapradio.com/
The doc will be marked-up and debated. This could be a protracted process.
"When the FCC authorized two satellite radio operators in 1997, it specifically prohibited the nationwide systems from merging" ... Please, enough!
In 1905 motor cars in Detroit were required by law not to exceed 7 MPH too. Laws are living documents designed with fluidity to provide a framework for society that are constantly evolving to address the needs, morays and technological advancements of said society.
Times change Nabmeister. Get over it. You ain't the only game in town anymore.... and just wait till SIXM splits the frequency and offers diversified national commercial broadcasting FREE along with prime content, commercial free paid-for subscriptions.... two business models rolled into one!
You're so very screwed I almost feel sorry for you. Merger... Royality.... National Competition.....
Imagine SIXM having free channels worth listening too, running fewer commercials than FM, meanwhile bringing in advertising revenue.
And totally fucking up the NAB after all of the shit they've put Sirius/XM through.
Once this merger is accepted SIXM need to go hardball against testical radio, it's gonna be fucking payback time motherfuckers.
Mark my words. 4-1 APPROVAL
Copps only dissenter
Deborah Taylor Tate known to be consumer-oriented say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme.
Deborah Taylor Tate known to be consumer-oriented say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme.
And Plowboy's risky investment tanks forever....... Those in the know would have invested smart in the future of digital radio:
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
Iphone killer APP - Sirius will bring any millions more subs from Iphones and Ipods. Same for XM, seperate or together.
HD - LOL - poor slob that is tring to pedal boring testical radio with commercials and ZERO content. High Def is for the eyes, not ears loser. Did you tell everyone that your trying to sell on this shit that you completely lose the station if it can't lock in completely. You'd be better off listening to a little static so at least you don't just drop the signal completely. What shit, can't even keep listeners when its free - Hahahaha !!!
Senator Rep. Browneye can take it in the Rehr or the other way around !
HDSUCKS....
Your last post had me rolling on the floor. I agree.
Po Po HD... sho don't gets no respect! .... Sho looks to me that "Plow Po Po Boy" dun picks da bestest investment alreadies!
---
Bridge: " And when asked "How interested are you in owning HD radio", 7% were "very interested" or "Somewhat Interested". That number is also down from our January study, with the most significant decline coming from the 12-24 age group. This eye-opening statistic should produce concern on the part of the radio industry which is literally banking on HD radio to cement its "digital future. Of those who were "Very or Somewhat Interested" in owning HD radio, 3% were "very interested". However, with these respondents, we followed up with the question "Would you buy an HD radio in the next two months?" only 1.0% responded "yes". "
In the following media growth projections, Bridge Ratings estimates based on current trends that Internet radio will have 180 million listeners by 2020, 250 million will still be listening to terrestrial radio, but HD will have less than 10 million. Which will contribute more to radio's financial future?
OH ME OH MY! .... Traditional radio companies are finding insufficient resources for the type of development of new media content and strategies needed to transition with its future audiences who today are between 10 and 24 years of age.
http://www.bridgeratings.com/press_08.08.07.HDvsInternet.htm
Dearest Plow Po Po Boy,
Did this article really suggest that HD is only interesting to 1% of those surveyed? It sure sounds like all that money spent trying to market HD is down the shitter, along with a flawed strategy?
I noticed this recently that sure sounds like Terrestrial radio is taking it in the pooper!
" The study was conducted in August with a panel of 2,533 persons age 13+ via national random telephone interviewing; 20% of the sample was cellphone-based.
Some 31% of satellite radio subscribers expect to be listening more over “the next three months,” as do 22% of MP3-player owners, 17% of internet radio listeners, and 10% of traditional radio listeners."
http://www.marketingcharts.com/radio/traditional-radios-digital-competition-increases-in-q4-2125/bridge-ratings-q4-predicted-satellite-radio-listeningjpg/
Do you think Plow " Po Po Boy" that regular radio and HD radio is afraid of satellite and that's why the NAB people have been so nasty at the FCC?
HD Radio is free that means it must be good. I'm handing out turds for free if anybody wants one, they are good I promise
This REALLY pisses me off!
Satellite news ...... FLASH!!!
The issue of royalties refuses to go away. A house subcommittee has now approved legislation requiring AM and FM broadcasters to pay royalties to singers, musicians and their labels (see RUsirius.com story dated 24 June). The National Association of Broadcasters is still fighting it, however, as articulated by Dennis Wharton, an NAB veep who said, "Despite today's action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on America's hometown radio stations should be used to bail out the failing business model of foreign-owned record labels." At issue is whether or not the Recording Industry Association of America should be representing major record labels that are outside the United States, as are three of the four major ones. A similar measure is currently working its way through the Senate after having been approved in committee. (27 June 2008)
T ate was nominated to fill the unexpired term of Chairman Powell. She has never been confirmed to the position by the Democratic Senate. Tates term (Powell) ENDS on June 30. IF a vote for or against a merger extends BEYOND the June 30 expiration of term, does Tate have any vote at all. If not, there is likely a deadlock 2-2 until the Senate can confirm Tate.Since only 1 vote for has been declared (Martin) and two declarations need to be rendered before the ten day clock starts for all members to declare, this could be a never ending process with Kevin Martin throwing up his hands saying he did all he could. IF the Dems win the White House, they could name there own Dem confirmee, the Senate could dump Tate and the Dems gain control 3-2 with Martin remaining in the FCC but not as Chairman since the Dems had gained control. Monday will be interesting. Tate better act FAST to make sure she has a vote or the NAB will be all over the FCC to get a clarification of the succession rules/laws. Its all politics now.
"Tate was nominated to fill the unexpired term of Chairman Powell. She has never been confirmed to the position by the Democratic Senate."
Stop smoking cockroaches.
Deborah Taylor Tate was nominated by President George W. Bush on November 9, 2005, for the remainder of the term expiring June 30, 2007. She was unanimously confirmed by the United States Senate on December 21, 2005, and sworn in as FCC Commissioner on January 3, 2006.
http://www.fcc.gov/commissioners/tate/
Deborah Taylor Tate known to be consumer-oriented say's NO! to Melvin Alan "Mel" Karmazin's "merge" MONOPOLY scheme.
HD Radio offers "immense opportunities" for consumers who are becoming more selective and protective of their choices. People want new, unique content. They want niche channels "playlist variety and format diversity." Automaker deals and new technology that lets stations upgrade to HD at a lower cost.
HD Digital Radio • IT'S TIME TO UPGRADE!
HD Digital Radio. It's here. It's local. It's free. DISCOVER IT!
www.hdradio.com/
Satellite in Trouble as HD Grows
HD Radio Sales May Be Slow, But XM and Sirius Stocks Decline and Subscriptions Plateau
As the hot summer months course through we are beginning to see a number of important evolving events and clues emerge that preview how the competing forces of satellite radio and HD are likely to fare in the future.
Satellite radio recently has passed the 11 million mark in total subscribers, and may announce more around the time this issue reaches you, as both XM and Sirius continue to spin their growth stories moving towards profitability "in the near future." Not much has altered the business plans that the companies have fashioned to gain a foothold in the radio landscape: increase content offerings with big brand names in the lineup to attract and sign up enough subscribers to pay expenses and, eventually, make a profit.
But some of these additions, like Major League Baseball, the NHL, the NBA, NASCAR, Howard Stern, Martha Stewart and Oprah, have been obtained at ridiculous prices and produced massive debt.
For the most part, investors have given satellite a long honeymoon. Both services are seeing subscriber growth rates slow and level off. This is exactly what investors have feared the most: the lofty projections of the number of anticipated XM and Sirius subscription sales may be more smoke and mirrors than real.
Wall Street has hammered both companies' stock prices downward over the past year. Without sustained subscriber growth, neither will have a prayer of turning the corner of profitability. Melvin Alan "Mel" Karmazin "merge" scheme will do more damage to the industry.
BOGGED DOWN
Stern has had months to lure as much of his old terrestrial audience as possible over to his new home. He had about 12 million daily listeners before moving, but his Sirius total appears to be slowing down at about 1.6 million subscribers. Analysts have reported that Sirius would need at least 3 million Stern subscribers to break even. If it doesn't happen during the first year, it's probably not going to happen.
The big marketing blitz was over as most Stern fans have already decided to pay the money and follow him or stay with other free alternatives on terrestrial. That's not good news for a company that pinned much of its expected growth on one show.
Add to the mix the recent move by Opie & Anthony coming back to CBS Radio to shore up the loss of Stern's syndication, a striking turn of events for a company that had fired them years ago over the sex-in-church caper.
Opie & Anthony had been toiling away on XM out of earshot from the vast majority of radio listeners. In only a few Arbitron surveys, they've already delivered impressive gains for many markets that were feeling the pinch of losing Stern, such as Philly, New York and Boston.
Stern can't be very happy about Opie & Anthony and his former network dancing on his terrestrial grave, carrying his old party forward.
SURVIVAL STRATEGIES, REALITIES
Both Stern and his boss Mel Karmazin at Sirius have got to be thinking how they could re-leverage Howard back into terrestrial radio if indeed his new subscription rate slows and stops growing.
Radio has always been a house full of strange bedfellows. Don't be surprised to see Stern show up on terrestrial again. That would surely not make those 1.6 million fans who pay extra to hear him on Sirius very happy.
The only other options to stop the bleeding are to raise the subscription rates and sell more commercials on Stern along with other Sirius channel offerings. Too many ads are a headache that the majority of folks who pay to listen to radio want very much to avoid, and such a strategy easily could trigger mass cancellations, but Melvin Alan "Mel" Karmazin has never seen too many ads as a problem.
Satellite certainly has established a solid fan base and serves a valuable function in the U.S. radio marketplace. But the hill that both satellite radio services are climbing toward profitability seems to be getting steeper every day.
XM faced a round of FCC problems, with thousands of radio converters that cause too much FM band interference. Add to that allegations that Sirius may have intentionally published inaccurate specs on its converters showing they met the interference limits when in fact they did not.
If that wasn't enough, a key XM board member resigned citing internal mismanagement and a possible looming financial crisis at the company.
The satellite service is obviously moving into a new phase of its evolution. It's been playing a game of beat-the-clock from the beginning. Time has run out.
As with any other high-tech venture that over-promises and under-delivers, investors eventually run out of patience and head for the exits. Melvin Alan "Mel" Karmazin's "merge" scheme is a smoke screen to buy more time and help Mel line his pockets before the industry tanks.
HITTING BOTTOM
As year after year of red ink keeps flowing off their books, stock prices of XM and Sirius could easily plummet further. Eventually the liabilities could outweigh even the perceived value of the assets and the major stockholders would demand action. Either the controlling interests of each company would negotiate amongst themselves to restructure the assets and the business plan into something that would be acceptable to the owners who remain. Or, a Chapter 11 reorganization bankruptcy would proceed.
The major stockholders of XM include General Motors and Clear Channel Radio. Ford Motor Co. holds a large stake in Sirius. It's no secret that these U.S. carmakers are in financial distress. It's not unlikely that either could choose to spin off those interests if management decides their satellite radio holdings no longer hold enough potential value, and instead represent more of a liability adding to their already staggering company debt.
Such a decision would be akin to colleges and universities that find themselves beleaguered in debt and decide to sell their valuable NCE station licenses. Many such stations did not contribute income but instead were mostly a financial burden, even if they did provide a public service and PR function for the school. Somebody else with deeper pockets came along with a business plan and vision that could better harness the value and the earning power of the channel.
IN THE WINGS
A similar scenario could play out with satellite radio. Whom do you suppose would be very interested in buying the Ford and/or GM satellite holdings, should they go on the block at attractive prices? Why, terrestrial broadcasters, of course!
They are the wellspring for most of the content and talent that subscribers have always heard on satellite. They invented the art form and the substance of good radio. As terrestrial radio diversifies its own services with Internet streaming and HD multicasting, satellite would just become another component part of the burgeoning stable of products.
Most of the leading American terrestrial radio companies are churning out impressive cash flows and ROIs. They are mature businesses with solid balance sheets, manageable debt and long track records of financial success. Assuming FCC rules can accommodate it, who better than they to develop and manage properly the satellite offerings as part of the total radio package?
A LONG-TERM INVESTMENT
The HD rollout continues at a steady pace with more companies stepping up to equip their second-tier markets with HD and HD2 capability. Many major markets now feature virtually all of their major FM stations with HD. AM-HD adoption will remain slow and scattered until the rules allow full-time HD operations and the attendant fallout of interference is better known and eventually resolved.
It's becoming clear that the companies that invest in HD and install the gear and the programming to support it are in this for the long haul. From what we've seen, their owners and operators understand that commitment, perseverance and patience will be needed to promote the new services and allow HD receiver penetration to grow towards critical mass.
We won't see much movement in that direction until major car companies include HD and multimode radios as OEM equipment in new model cars. All indications point to 2008 for that watershed process to get rolling.
HD2 will most certainly bring many more format choices to the dial, giving listeners new options they could only find on satellite or manufacture themselves via CD and iPod collections. The real value of those additional channels will not be realized for quite awhile, however.
While many may start out as fully automated voice-tracked jukeboxes, programmers will dress them up to be worthy competitors to both satellite and their own main channel stations over time. Eventually many should emerge as full-fledged stations in their own right, competing head-to-head with their main-channel hosts.
REMEMBER FM STEREO
HD naysayers are still predicting that if HD receiver sales don't take off quickly, the service could easily falter and meet a relatively quick demise, similar to AM stereo. That's like comparing the rollout of FM stereo to that of FM quad. Music on FM already sounded good enough in stereo to most listeners while quad was deemed a gimmick for aficionados, little known to mass consumers. Like AM stereo, the industry really didn't need FM quad, it so it was largely ignored.
FM stereo, on the other hand, did make a real difference, although not an earth-shaking one at the time for the average listener. Like HD, it was an important technological innovation the entire industry embraced and supported. Stations installed stereo encoders, radio manufacturers integrated stereo reception into receivers at all levels and consumers bought them whether or not they wanted the new feature or were even aware of it.
From the time FM stereo standards were adopted in 1961, it took at least 10 years for the new mode to take hold in the marketplace and another 10 years before FM stereo became the dominant choice for consumers of radio entertainment.
The same pattern is likely to be charted by HD Radio. It's just going to take time to make it to critical mass. Along the way, the technology will no doubt continue to improve and refine its present offerings. New ones not yet even dreamed about will certainly be added. HD is much more than just your daddy's FM stereo.
But the conversion should not take as long this time around with the advantages of digital being so much more flexible and scalable. It can easily accommodate new payloads and features in the coded bit stream that were utterly unthinkable in the analog era. Both the transmission and reception ends of the process can be updated relatively quickly and efficiently.
There is no other transport option that makes better sense for the industry going forward. There is simply no turning back now.