Karmazin: Merger will "allow us to lower prices"

Tuesday, April 17, 2007 at 10:47 AM
Tags: 2, XM

Mel Karmazin

Mel Karmazin's testimony before the Senate Commerce, Science & Transportation Committee today drove the concept that a combined Sirius-XM would offer "more choice, lower prices." It's a mantra that has been repeated time and time again.

But Karmazin pointed out that a purpose of the merger is to compete better against free radio, and so the goal is to provide better value for consumers. In other words, the combined company will actually lower prices.

"Consumers who want fewer channels than currently offered will be able to select one or more packages of channels for less than $12.95 per month," said Karmazin in his testimony. "These packages will include an attractive mix of music, news, informational, sports, children’s, and religious programming."

An encouraging statement for those skeptical of a merged satellite radio provider.

TrackBack/Ping:

Comments

I was skeptical of this merger in the beginning, but the scumbags at the NAB have pushed me wholly into the pro-merger camp. Go Mel!!

flip flopper...heh

flip flopper...heh
atleast the stern vs opie bashing has stopped. We have come together to fight the real enemy.

This does very little to help those who are skeptical of Mel as a CEO.
I am sure that FUBAR satellite radio will offer a package that is less than 12.95, but what happened to those earlier statements about the "a la carte" programming choices? Why would people who wanted to pay less and have less channels automatically get a "package"? At what price point does the "a la carte" programming choices start? Or was Mel just lying when he said "a la carte" programming in the first place?

Packages are NOT "a la carte". Welcome to a single provider industry.

I've no idea if this thing passes, but Mel earns every dollar he is paid. I am amazed at how well he fields these questions. That man is good.

IMO the merger is just a smoke screen ... exposing the NAB for what they are doing... however IMO the merger will not be aproved anyway and both XM/Sirius managment knows it.

Pro's for the smoke screen
#1 no more talk of HP being ousted
#2 NAB exposed
#3 divert lawmakers from Digital music bills
#4 Smoke covers Q1 weak sub numbers
#5 keeps XM/Sirius in the news
#6 gives time for OEM ramp up
#7 tempararily reduces comptition for "Content"
#8 few thoughts of the RIAA lawsuit

Con's
#1 produces confusion for retail (a pro for XM)
#2 Ties stock prices together
#3 uncertinty in the future PPS


I am sure there are many many more.

Gee, what does this remind me of....
Oh yeah,

"Read my lips ....."

Mel is one of the most respected business leaders out there, and he's not going to lie and ruin his credibility. If he's telling the truth, then the consumer gets more value from the combined service. If he's lying, most customers will simply cancel their subscriptions and save $14/month. I didn't get my degree in economics, but I think it's safe to say that it's better for the company to increase the subscriber base instead of trying to squeeze a few more dollars out of a decreasing subscriber base.

The problem with this whole story is that, like so many other stories in contemporary America, there is no "good guy" to root for.

Yes, the NAB is completely full of shit and is singing a totally different song than they used to, but sorry, I just DO NOT believe that this proposed merger is to "better serve the customer."

What I know it WILL do is reduce the variety of channels that as a subscriber to both XM and Sirius I now have available to me; it will also eliminate the jobs of hundreds of people who work at the two companies. I'm guessing it will also mean the closure of the XM complex in D.C.

History Guy asks a good question: What happened to that "a la cart" pricing we were promised? That seems to have disappeared from the discussion.

If a la cart is now no longer part of the promised benefits of the merger, who is to say what else will quietly evaporate?

What happened to a la cart? Mel never had any ointention of doing it, it was just something to tell congress so they would approve this merger. Mel is not one of the most respected business leaders out there, he is one of the most despised. He is a typical full of shit CEO.

What happened to a la cart? Mel never had any intention of doing it, it was just something to tell congress so they would approve this merger. Mel is not one of the most respected business leaders out there, he is one of the most despised. He is a typical full of shit CEO.

JB wrote: "Mel is one of the most respected business leaders out there, and he's not going to lie and ruin his credibility. If he's telling the truth, then the consumer gets more value from the combined service. If he's lying, most customers will simply cancel their subscriptions and save $14/month. I didn't get my degree in economics, but I think it's safe to say that it's better for the company to increase the subscriber base instead of trying to squeeze a few more dollars out of a decreasing subscriber base."

-------

The problem is Mel doesn't have to lie. He just has to say what we want to hear. Mel is a great businessman, but he isn't really into consumer interests at all.

Notice how he says the prices won't go up, but notice how he doesn't clearly mention what content you'll get for that price? He simply mentions "al-a-carte" and "you keep what you have now for the $12.95 (for current subscribers)". You can't be more vague than that.

The biggest fear for current subscribers is losing content (i.e. music) that the new company deems "redundant".

>>"The biggest fear for current subscribers is losing content (i.e. music) that the new company deems "redundant"."

I disagree. In fact, I'd say you're in the vast minority of listeners. Music is important, but most subs (95% or more, I'd bet) won't care which 70's or Outlaw Country station survives, as long as their genre of choice still exists.

The only things that could really impact subscriber numbers in any significant way would be a change in one of the sports offerings (MLB, NFL, etc...) or Howard Stern. Everything else has little impact or is taken for granted by most of the public.

FUBAR Radio.. I like that... good name... submit that to their name this horse if they have a competition.. (to name the new shitcompany)

Mike, I completely disagree and think you are in the vast minority. You're obviously a guy who has Sirius for Howard. That's fine but believe it or not, most sat radio customers don't get it for one morning show. Everyone I've exposed to sat radio doesn't say "wow, I can hear Howard say fuck", the say "wow, what music station is this, it's great". My music genre of choice is hard rock/heavy metal and believe me, I care very much which stations survive. I found Sirius's stations in my prefered genre to be no better than FM w/o the commercials and would cancel immediately were I to have those channels forced upon me. If Howard or O&A were to go I wouldn't cancel my subs. And as far as NFL, MLB, NASCAR, etc, none are exclusive and are a much richer experience on TV. They could lose them all and I could give a fuck. Music is what really sets sat radio apart.

I don't understand why people have this notion in their head that, assuming you subscribe to one company and the merger goes through, they will somehow lose the amount of stations that listen to in a particular genre. If you had 4 rock stations before, what make you think you're somehow going to only get 2 after they merged with a company that has 4 also. WORST case scenario, you'll have the same amount of rock stations before and after. Better case, you add a couple. Best case, you'll add them all.

As far as NFL, MLB, NASCAR, etc, the reason people LISTEN to the broadcasts are because a.) They can't get the game they want in their location on TV and b.) They aren't near a TV when the game is on. They have exclusive rights to play ALL games. Just like Direct TV has exclusive rights to broadcast ALL games on cable.

If you listen to music with adult content, the only thing better than satelite radio to listen to is your own mp3 player. I hate radio edited crap

It's not just about losing a number of stations which will happen. "Eliminating redundancy" is what Mel called it. More importantly, it's about losing the programming of stations. XM and Sirius have extremely different music offerings. If you listen to both services it's very evident. I love the XM playlists and didn't think much of the Sirius stations in the same genre. Others prefer Sirius offerings and don't want XM playlists.

We all know why people listen to sports in their car but lets face it, you listen in your car because you have no other choice, you have to be on the road at that time. There are very few people that actually want to listen on the radio. And while they have rights to play all games, it's not exculsive, I can get NFL Sunday ticket, MLB, Hockey & NBA packages all through my cable TV. Plus there are very few people that are out of their home team's market and have a need to hear the local games on Satellite. All home market games are on both TV & AM/FM radio. I'm a huge football fan and my team is out of the market where I live but the fact that I could listen to the games on Sirius made zero impact on my decision to buy. Plus, sports can go away. If you sign up for the NFL, what happens if it goes away? Sports are a plus but everyone I know that has sat radio gives the music as the number one reason they like it so much. And try selling radio's to women by telling them how much sports they can listen too.

"And while they have rights to play all games, it's not exculsive, I can get NFL Sunday ticket, MLB, Hockey & NBA packages all through my cable TV."

what planet do you live on where you can get the NFL packages on cable? Certainly not earth.

"If you had 4 rock stations before, what make you think you're somehow going to only get 2 after they merged with a company that has 4 also. WORST case scenario, you'll have the same amount of rock stations before and after. Better case, you add a couple. Best case, you'll add them all."

No, you won't "add them all." There isn't the bandwidth available for that.

"Eliminating redundancy" means that you're going to lose some of the channels that are similar to channels on the other service. What if you LIKE the version that gets eliminated, though? Tough noogies. That's what happens when you have a monopoly.

I guess nitpicking comes with being a crankymediaguy.

I understand the concept of "eliminating redundancy". If you have 2 channels that are the same, you're not going to lose both. If you had one and now you have the other that is essentially THE EXACT SAME, then you're not losing anything. Its not like, if they add 1 hip hop station, they are going to get rid of a heavy metal channel to eliminate redundancy. "OMG, I lost my favorite disc jockey!!!!". If that is all you have to complain about after the merger than you did pretty good, no?

He's not being nitpicky, you're not understanding the problem. Lets take XM's Boneyard & Liquid Metal and Sirius's Hard Attack & Octane. They are completely different stations with different artists, playlists and programming philosophies. You think they are the exact same but you're dead wrong.

Now which you prefer is a personal preference but with this merger your personal preference won't matter anymore. I happen to prefer XM's deeper playlists. Other people just want to hear hits so prefer Sirius, but these stations are not interchangable. This is the same w/FM too. There's a bunch of hard rock FM stations in my area but only one I like and listen to.

I could give a fuck about DJ's, they should get rid of them all, I don't need someone to intro a song for me, especially when I can see the artist/song info on my tuner.

To put this in terms you may get, Howard and O&A both do comedy morning shows. You are a Howard guy. Great, more power to you. What if Howard was eliminated and the new monopoly said "so what? you still have a funny morning show. They are the exact same thing". Would that be okay or would you be pissed off and disagree that they are the same?

Take another example of Boneyard vs. Liquid Metal. Both on XM, both the same genre but vastly different bands/songs. You can very easily like one but not the other. They are not even close to the exact same. While in the same genre they are polar opposites.

If they are polar opposites, they are not redundant. That should be pretty simple to understand.

And who makes that decision? If you aren't a fan of a genre how could you know? It won't be program directors making the decision, it will be suits.

Post a comment

(or continue the conversation in the Orbitcast Forums)


Recent Entries

From the Forums...
Search Orbitcast:

Recent Readers
Latest Poll
Technology & Media Blogs
These are blogs that relate to technology, media or other specific industries, but not soley on satrad.
Sponsored Links





Copyright © 2008 Orbitcast Media, LLC.