Media mogul John Malone came to the rescue earlier this year by providing a bridge loan that effectively saved Sirius XM Radio Inc. from bankruptcy. But was this move part of a bigger plan for the satellite radio medium?Recent activity between Liberty and failing worldwide satellite radio provider Worldspace might point to some clues.
According to Rapid TV News, Malone has used his Liberty Satellite Radio LLC, to acquire about $102 million worth of preference claims and court-guaranteed financial advances to Worldspace.
In essence, Worldspace is "selling" their bankruptcy claims to Liberty.
Apparently, plans by Worldspace's founder Noah Samara to acquire the complete company had fallen through a couple weeks ago when he failed to come up with the $28 million he bid. So now Malone is riding in as the white knight once again.
It's not clear exactly what Malone's plans are, but what is clear is that he has taken a strong interest in the satellite radio space in general.
According to Rapid TV News, Liberty has bought the claims from:
[Rapid TV News]
In essence, Worldspace is "selling" their bankruptcy claims to Liberty.
Apparently, plans by Worldspace's founder Noah Samara to acquire the complete company had fallen through a couple weeks ago when he failed to come up with the $28 million he bid. So now Malone is riding in as the white knight once again.
It's not clear exactly what Malone's plans are, but what is clear is that he has taken a strong interest in the satellite radio space in general.
According to Rapid TV News, Liberty has bought the claims from:
- Citadel Equity - $48.5 million
- Highbridge Int'l - $38.4 million
- Angelo Gordon - $3 million
- OZ Master Fund - $11.1 million
[Rapid TV News]
That is one great question Ryan. My first thought is a potential outlet to syndicate some Sirius XM content to other countries. Who knows?
Given that experience in both North America and elsewhere has demonstrated that satellite radio is a tough way to make a buck -- if it's even possible to make money at all -- I'd bet he's got some other plans for this spectrum. People just do not seem to be willing to pay enough for SDARS for it to have long-term viability as a subscription-based service. Even if Sirius XM is eventually able to eke out a modest profit by continuing to charge subscribers more for less, the subscriber numbers are suggesting that there's little chance that pay radio is going to see explosive growth the future. Since the big money people are not looking for a place to stick a huge pile of cash in the hope of making about as much profit as they'd get on a modest-rate CD -- if they're lucky -- I can't see a lot of investment being put into satellite radio unless they've got plans to change it significantly, and that would mean doing a lot more than tweaking the programming a little to wring out a few more dollars. The potential for big profits just does not seem to be there.
I'd bet that ten years from now, one of two things will happen: SDARS will change over to being a free, ad-supported service, or it will transition to a video service, or some sort of hybrid audio/video/data service that has a high enough perceived that people will pay more than $13 a month for it.
This would be a huge mess.
Worldspace was in the middle of a huge platform change that took out most reception to Europe to a ETSR-DSI network for Italy and some other markets whose licenses were never won. Worldspace does not even cover most of the U.K. and with the half-assed "conversion" to ETSR they are left with a broken, non-licensable system on the satellite that serves rich nations. The other satellite is fully working but it serves decidedly poor nations. It's almost like Samara killed half the network to maximize the possibility of bankruptcy.
Worldspace, I mean "1worldspace," is too broken to matter.
you have no vision. That is all.
I'm sure not -- the article invites speculation, so I was just speculating based on numbers that are public knowledge. So, how about shedding some light on this discussion by sharing some of your 20/20 vision?
Wow, just imagine the whole world can hear o n a. Yup, I guess satellite radio really is doomed if the tranny power twins are going to be expected to bring in global subscribers. They can't bring in any in the US.
I wouldn't plan to hear anything of value or worth from "Anonymous." It is noteworthy that the troll for some reason chose not to come up with a cutesy screen name, wail about "noobs and suckers" and "Melvin's" pyramid scheme.
In terms of your observations, I think Malone does indeed have something else in mind for the spectrum. What, I've no idea.
Do the old Sirus Sat's cruze over the UK?
they cannot make money in the U.S how are they gonna make money overseas
"they cannot make money in the U.S how are they gonna make money overseas"
THAT is a silly question. You already have the talent and programming in place. Any extra subscriberse is gravy. Gravy my friend.
It's a smart way to try and do this! In Europe or Asia or anywhere there are English speaking peoples, you charge what their market will bear...may the equilivant of $4 - $10 a month.
Gravy.
True, the "noobs and suckers" comment was notably absent. Maybe that show-stopper is still out there waiting to be played at just the right moment for maximum impact.
Leavenfish, I don't agree. Tastes are different elsewhere in the world from those in the U.S. Just exporting Sirius XM's programs would, I think, be a flop. Looking at the channel lineup, it seems they could use, at most, half of the U.S. channels on an international platform. Maybe this was one problem Worldspace had. While the United States and Canada have a lot in common, Worldspace may have had trouble coming up with something marketable in countries with different languages, cultures and tastes.
Also, running additional satellites and setting up an infrastructure to sign up and service customers in multiple countries would involve cost, so subscribers from outside North America would not simply be gravy.
I think we're not seeing the 800 lb gorilla in the room. Malone is investing big bucks in Satrad and taking a big risk. There are pleny of other places he could go to blow is money. There must be more in play here that we haven't seen yet.
"Also, running additional satellites and setting up an infrastructure to sign up and service customers in multiple countries would involve cost, so subscribers from outside North America would not simply be gravy. "
The infrastucture, aside from additional sattelites, already exists...I manage mine account online.
The real costs would be the fixed, depreciating costs that get written off. In any case, I think the world if hungry to some degree for such things as - lots of targeted music and the other programming that is ALREADY part of XMSirius. Why do you think Satellite TV is so popular overseas? Perhaps I am wrong, but it seems that once you have the programming accounted for, it's all about expanding into new markets.
Honestly, I don't care if they make it or not. I enjoyed listening to my XM radio, but after my experience with the subscription renewal, both my husband and I are off of satellite radio for good. Trying to save a few bucks this year, I decided not to renew my XM subscription, so I just didn't send in the payment when I got the notice. We got a couple of calls saying something like "don't miss a minute, call us today" and then got a call from a collection agency saying I owed them $22+. I was shocked, but when I called XM's customer service line, they told me if I didn't cancel in writing, they autotmatically renew your subscription, then let it go delinquent and when you don't pay, send your account to a collection agency. I know this same thing has happened to at least one other person with an XM subscription. If they really want the public to buy their product, they need to make it more affordable and quit trying to scam their already existing customers with questionable, sandbagging renewal rules. AS for me, I'm going back to regular, free radio and books on tape!!!
I would just wonder whether the North American-targeted music of Sirius XM would be popular elsewhere; plus, with a few exceptions such as BBC and WRN, so much of the sports, talk and news focuses mostly on the United States, and it's almost all in English. Does someone in Spain, Italy, Russia, or Poland sign up for this? I don't know, but it just does not seem like too many would.
I don't know anything about satellite TV in other countries. Are you saying that American satellite TV, such as DirecTV and Dish, are popular elsewhere, with the same or substantially the same programming lineups as here?
True, the content does vary in Satellite tv around the world. But, American entertainment is sought around the world. It is very popular. British too - the BBC has long found quiet an audience in Africa and Asia. True, there are a lot of language's they use, but more people speak English in Europe, Africa and Asia than any non-native language. I think Spanish is second....a distant second.
All I am saying is that when you ALREADY have the programming (and I guess you could add some non-English specific programming in non-US bandwidth), you are more than half way there. It then just becomes a matter of leverging that into new markets where you mostly just need aditional sattelites (fixed cost) and cheap radios...which the consumers buy.
I have been critical of many aspects of Sirius XM's business practices, but canceling something simply by not paying the bill is generally going to cause you problems no matter what company you're dealing with, whether it be Sirius XM, the cable TV company, a cell phone company, or whomever. In any of these cases, the service does not get shut off the day after your bill's due date, so when they finally shut you off after a certain number of days of non-payment, you get a final bill that includes the time up until they shut you off, so you pay more than you would have paid if you had canceled on the day you wanted service to stop.
I'm not contradicting your statement that someone in the company (or possibly the collection agency) told you that you had to cancel in writing, but I've canceled radios by calling in, and the phone menu on the toll-free number still has a menu option for "cancel your account." So, I would conclude that at the very least, if you had called in to cancel, they'd have then advised you of the need to write your request and send it to them.
This is bullshit
Nice I like it
Screw you Mel!!!!!
Looks as if the SHORT bashers found this web page as well and are still being paid to bash where ever. Those lost poor soles won't know what hit them when Malone and Mel drop the hammer! GLTAL
I don't think SiriusXM would do well outside of North America. The music stations are too Americanized and the talk/sports/comedy content would probably not appeal to people overseas. Our content is different than what is broadcast outside North America. Even though Worldspace was not a success, it was targeted for a global listenership. SiriusXM would have to change a lot of their content to make it globally.
When I go through the music channels and genres on Sirius XM, there are a lot that do seem very focused toward American and Canadian listeners. Country isn't too popular elsewhere except to a limited extent in Australia; Christian is an American-focused format. Channels like The Blend and Flight 26 play the Hot adult contemporary songs that charted here, and there's some overlap with what was popular in Europe, but also a lot of differences.
For whatever it's worth, XM had channels with far more eclectic playlists that I think would have resonated a lot better with foreign listeners, compared to the repetitive, corporate, "safe" playlists that we're now treated to on Sirius. So, I hope Leavenfish is right that they'll add some variety and try to market the service worldwide.
Satellite Radio medium is evolving beyong radio, with video and data services. Combined with 3, i think they can penetrate to more markets here in US. I dont beleive there is a possiblity carrying over Sat radio to oversea because of cost of programming.
Hi "xcountry"
Been a while......
I agree with your points. I remember when Worldspace was advertised in "Air Force Times" (and probably Army, Navy, & Marine Corp Times as well..They are all part of the "Military Times" weekly newspapers) back in '05 or '06. Since I had been over to "The Big Sandy" at least twice I seriously considered "WorldSpace" as an option if I got sent back over (especially if it was going to be for a year). I got onto WorldSpace's site and checked it out back then. You and some other posters are correct. Obviously it was not geared for United States per se but did offer some decent Rock & Roll and other western oriented channels. The one good thing was that WorldSpace did offer "The System"(XM's old "techno channel) which was FAR SUPERIOR to the crap that SiriusXM's "Area" pukes out. That was one thing that I remember standing out. It made sense, "Techno"(for lack of a better term) is more popular in Europe and surrounding area than in the US and it was far better to listen to(I can't explain it but even as a 56 year old "geezer" 15 minutes or so per day of "The System" really got my blood flowing). I also remember when they went bankrupt about two years back. I think it was due to not enough exposure and limited selections for such a large & diverse populace.
The hardware was much "clunkier" than either XM or Sirius but if I had gone back over for a year I would have probably bought into it just because it did offer something besides what we had(downloads,CD's,etc - you tire pretty quickly on what you bring from the states - especially if you're a geezer like myself..I was really low tech - taped a bunch of cassettes from my DirecTV & local radio stations. Low tech but didn't crap out with all the dust like CD players did..put my casette player in a zip-loc bag,hooked up my ear plugs and pushed on).Didn't know how to download back then and didn't have time to do it on the limited time they allowed us for computer use.
Anyhow, I agree that Malone may be up to something and since SiriusXM's stock has been flatlining as of late maybe there is a silver lining as far as improving programming...
Worldspace had different programmes for the their various listerners on AmeriStar, AfriStar, AsiaStar and so on.... so providing varying programmes is something possible and all the structures for that have already been put in place by Worldspace. I'm in Africa but I and quite a lot of folks here love our pop, rock R&B and so. We struggle to get some of these from stations like VOA and NPR. We don't get most of this music on our local music stations so Worldspace no longer existing is real punishment for some of us. About satellite TV carrying American and British content and being popular in Africa??? The least said, the better. The ordinary/average street person can give you the current US/UK music chart of hand and tell you about Boston Legal n how he/she now misses th Tonight show. If something is really entertaining, It'll get everyone entertained - whether Black, Brown, White English, Spanish or French speaking. I in Ghana know folks who are real fans of Arabic and Indian Pop.