Karmazin on post-merger packages and pricing
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.


Comments
I hate to say it, but Mel didn't say commercial-free music.
How much you want to bet those "lower prices" will come at the expense of commercial free music. Somehow, the bills gotta be paid.
Posted by: JRT | February 28, 2007 8:33 PM
All I care about is having O&A. If they decide to dump them for whatever gay ass reason, then I'll spend my 13 bucks a month elsewhere.
Posted by: johnnygriswold ? | February 28, 2007 9:02 PM
quit now.save 13 bucks and turn on the free fm station.
Posted by: sternfan73 ? | February 28, 2007 9:32 PM
"quit now.save 13 bucks and turn on the free fm station."
Your obvious bias in your name aside (which I'd like you to put aside to answer this question), how would someone like me on the West coast do that? Internet streaming puts me at having to wake up at 3am for them, and forces me to be near a computer. For us out on the west coast, XM is the ONLY way to hear O&A. What's your glorious solution there, notwithstanding your HIGH-LARIOUS (not just hilarious, HIGH-LARIOUS) remark.
Posted by: SpaceButler | February 28, 2007 9:46 PM
"quit now.save 13 bucks and turn on the free fm station."
They do two different shows you stupid jackass.
Posted by: Frank the Frowner | February 28, 2007 9:55 PM
"All I care about is having O&A. If they decide to dump them for whatever gay ass reason, then I'll spend my 13 bucks a month elsewhere."
You spend 12.95 a month just for them?...
AHAHAHAHAHAHAHAHAHAHAHAHAH.....
[ L ]
See that letter "L"? Blow it up, print it out and then glue it to your gdammed forehead!
Posted by: NDKFTDIX ? | February 28, 2007 9:58 PM
While I do love O&A(this would also go for people there getting the stern) .. I don't just have the XM for that I listen to the music all day long. But, if they were to go away there would have to be some mighty competition keeping me away from the ridiculous amount of music I have in my collection. The radio shows might not be the thing that makes me get sat, but it does weigh in significantly. Less then 6 months ago I had no xm and listened to pirate streams of O&A and left internet radio on all day.
Posted by: Chris | February 28, 2007 11:13 PM
The only losers here are you Stern trolls.
Are you actually going to tell us now that no one subscribes to Sirius just for Howard?
Posted by: Thrawn | February 28, 2007 11:36 PM
everyone on congress probably has sirius or xm. They prob listen to playboy and howard stern. The merger is going through!!
Posted by: dave | March 1, 2007 12:25 AM
Hmm, let's see, how can I put this nicely? How about "Karmazin is full of shit"?
Nobody works to create a merger so the combined company can make LESS money.
Yeah, in the (very) short term, they *might* hold the line on price, but my guess is that this "tier" thing will create a situation where to duplicate what you're currently getting from either service now, you'll have to pay something resembling what having both services now would cost you (and with fewer channels overall).
They'll nickle-and-dime you to death with those tiers, just like the cable operators do.
Posted by: crankymediaguy ? | March 1, 2007 5:25 AM
Why is it so hard to believe that many of us have XM because of O&A. Would I cancel if O&A were removed, or again gagged by Mel and Howard? Yes. I listen to many of the other 170 XM stations, but my main interest is Opie & Anthony and Ron & Fez. Those shows are the reason I am a subscriber.
Depending on your belief in Bridge surveys or Howard himself, somewhere between one and six million people signed up for Sirius because of him. Don't you think if the merger could negatively affect the Stern show, many of his fans would cancel? I would argue some of those folks are paying $12.95 because of Howard, the same as many pay $12.95 for O&A.
I'm not looking to engage in yet another 'my radio show is better than your radio show' argument. I'm merely trying to say that someone paying $12.95 for O&A is very realistic. As for the FreeFM argument, that is only 50%-60% of their total show. Additionally, with XM, you have the option of listening at your own convenient times with replays. I can understand why you would use the free radio argument if you're looking to make anti-O&A statements. I'm just asking that you also look at it objectively if you're not just looking to bash a radio show.
Posted by: Philly loser | March 1, 2007 6:47 AM
crankymediaguy, how come when tier pricing is brought up someone brings up cable companies. Who in this country has tier pricing from their cable companies.
Posted by: another thought | March 1, 2007 7:13 AM
I have to agree with Crankymediaguy that while this will happen short term. Alot will change for the worse later. Maybe some of us are being negative but I think it's justified.
Posted by: prozac ? | March 1, 2007 7:34 AM
My question is this - how exactly will they deliver this content. The bandwidth on the satellites is maxed out. If I am an XM radio owner and decide to get the "Shock Jock" package that includes Stern, will they simply back-haul the signal from NYC to XM in DC then send it up on the bird then down to me? If so, what other channels does this displace? The transmitting of Stern on XM's bandwidth, at this time, is not really possible, there is no room. The only real possibility is that there is a very fluid channel line-up where you never really know what is on a station. Unless you have a interoperable radio, I am not sure how this is offering more choice, at least in the short-run, channels will go the way of the dodo.
Posted by: Miss the 8M | March 1, 2007 8:27 AM
"Nobody works to create a merger so the combined company can make LESS money."
Dude know much about mergers?
the savings of a combine company > price increase
just think they only need 1 main office instead of two, that is a lease savings of at least 30m + layoffs is good for another 5m.
that is just one example of savings.
raising prices not needed at first
Posted by: PNess ? | March 1, 2007 8:30 AM
Yeah, they won't raise prices, but watch the content available for that price dwindle away as they steal bandwidth to create more costly services such as children's backseat video. My guess is that XM will take the largest hit with Mel at the helm.
Posted by: man_rob ? | March 1, 2007 8:35 AM
Read what he says. Yes, they will charge less that 12.95 (maybe 9.95) for baseline service.
To get all the rock choices you get now you will most likely have to pay additional say 4+ bucks a month.
Talk and news? +4.
O&A +2 (stand alone channel, like getting HBO)
Stern +2
That's about the most generous I can see them being.
Same sort of break down for Sports, etc...
Posted by: Anonymous Coward | March 1, 2007 9:30 AM
Miss the 8M wrote:
"My question is this - how exactly will they deliver this content. The bandwidth on the satellites is maxed out. If I am an XM radio owner and decide to get the "Shock Jock" package that includes Stern, will they simply back-haul the signal from NYC to XM in DC then send it up on the bird then down to me? If so, what other channels does this displace? The transmitting of Stern on XM's bandwidth, at this time, is not really possible, there is no room. The only real possibility is that there is a very fluid channel line-up where you never really know what is on a station. Unless you have a interoperable radio, I am not sure how this is offering more choice, at least in the short-run, channels will go the way of the dodo."
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Good questions. I am guessing that the only way to receive a mixed content package is to buy a new dual-band receiver. Because of bandwidth restraints, any mixed content on one receiver will sound, how to put it nicely, like total garbage.
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PNess wrote:
"just think they only need 1 main office instead of two, that is a lease savings of at least 30m + layoffs is good for another 5m.
that is just one example of savings.
raising prices not needed at first"
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True, at first. But what happens 2 years down the line when those synergies don't save what they expected. Some analyst came up with a "7 billion" number with no time-frame. Personally, I can't see it hitting anywhere near that number for another 10 years. By that time, all of the big named content will either be gone or rebought at a possibly much larger price tag.
Posted by: SatelliteRadioFan ? | March 1, 2007 10:36 AM
Satellite Radio Fan wrote:
Good questions. I am guessing that the only way to receive a mixed content package is to buy a new dual-band receiver. Because of bandwidth restraints, any mixed content on one receiver will sound, how to put it nicely, like total garbage.
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Right - so how does this merger help the consumer? We will have to buy the interoperable receiver in order to take advantage of all of these new choices. Unless they have a trade-in program, this does not seem like a win for the subscriber.
Posted by: Miss the 8M | March 1, 2007 11:02 AM
I love it...If you go back just a few months you will be reading articles on how the merger is definately not gonna happen and how its almost impossible to pull off.
Prices will be set for 4 years? thats a good deal i think, if they didnt raise prices in four years they would be getting robbed. Plus i wouldnt worry about them screwing you hard with a price hike or even putting ads on your music. So many oppurtunities to make money now, many of which have not been explored.
-They can find other ways and places to advertise
-Create an itunes like system
-create a market place for things other than music.
-Now with gps and video services being offered.
Posted by: dave | March 1, 2007 12:32 PM
Boy, look at that photo...the tuner on the right is a gigantic brick!!! ;-)
Posted by: RoadRunner | March 1, 2007 3:56 PM
I just love XM, Sirius and Tom Fields.
Posted by: Gregory Sterling Williams | March 1, 2007 5:27 PM
Gigantic brick? are you serious? they look to be the same size. Some people are loyal to a certain company just to the end I guess. I picked the one that looked to give me the choices I liked best, that's it. I don't care what someone else uses as long as they support the satalite industry as a whole. The arguments are stupid.
Posted by: nothing | March 1, 2007 7:15 PM
Folks there are a lot of reasons to NOT jump the gun here about the merge. I have both Sirius and XM. For those of you who posted comments about not having enough bandwidth, there are some obvious solutions there. For instance, if a merge occurs, do you think there will be TWO 90's channels as there are now? Probably not. Also all of the duplication on both services will also be eliminated. For instance CNN is available on both. The new platform with the new technology will also allow a lot of bandwidth to free up.
Many people are going to lose jobs because of the merge. Economically speaking the merge is good, but with any big corporate merge there are always duplicate jobs. Mel Karmazin and company want to join the companies for economic reasons so they can both survive. Many industry experts have said that if the FCC and Congress don't approve the merge, it's probable that one company will go out of business and the other one who survives will buy the other one out.
The merge will probably go through if the FCC and Congress view this merge as one that isn't a monopoly. Mel Karmazin has stated that Satelite Radio is competing against Ipods and other similar services. Because only 10% of the potential market has bought XM and Sirius, you have an amazing potential for one satelite radio company to go after the other 90% of the market which is using free radio, streaming and Ipods.
This is the reason for the dip in XM stock and why Sirius has hovered between $3.50 and $4 all this time. Right now, both companies are hemmoraging revenue and to survive they must merge. Personally, I wish there could be two companies, but that probably won't happen.
So all of you on this thread should be patient while the monopoly and antitrust wrinkles get ironed out. My concerns lie in avoiding a consumer nightmare of having to buy new radios. Mel Karmazin has stated that there will be no need for existing subscribers to buy new equipment. I also hope that the company will allow all of us (like me) who bought lifetime subscriptions to maintain them. It looks as though the merged company will get rid of duplicated programming and we'll get the best of both companies on XM and Sirius equipment that we already have. I'm sure that when new radios are released in a few years that they will do many awesome things that our present equipment can't do. I will wait with patience for the merge to happen and use my plug and play receivers in my new car until something new comes out.
My only other concern is the Howard Stern/Opie and Anthony war. As a huge fan of Howard and O&A, it really pisses me off that Opie and Anthony have always been shafted by the Karmazin/Stern camp. I love Howard Stern and O&A, but this war really needs to stop. It would be a huge disappointment to me to see O&A get shafted again if this merge occurs.
Howard Stern is the King of Talk Radio without any doubt. He has an amazing environment and forum to do his show on Sirius. But for God's sake, leave Opie and Anthony alone and let them do their show without the interference of gagging them or making them feel like second class citizens if this merge occurs. Opie and Anthony generate a LOT of revenue for XM. If Howard Stern continues to torture O&A after a merge occurs because he's Mel Karmazin's buddy and O&A lose their gig at Satelite Radio, it will be very sad for this newly merged company. It also will piss of a LOT of loyal O&A fans that bought into XM solely to get O&A.
There are NO ratings to worry about in satelite radio. This is all about ego. I adore Howard Stern and I love Opie and Anthony. I want both shows to continue if this merge occurs. It would be a shame if O&A lose their satelite radio gig just because of this stupid war between Howard and O&A.
Economically speaking, if Mel Karmazin and Howard Stern have it on their minds to get O&A out of the picture, you will definitely see a lot of cancelled subscriptions of people who love O&A and can't stand Howard.
I hope that if a merge occurs (and it probably will) that Mel will do the right thing and keep O&A on board. By the way, I listen to Howard live in the mornings on Sirius and O&A on my XM Myfi in the afternoon because my MyFi tapes O&A in the morning. Listening to BOTH shows every day to me is radio heaven. I'm sure that there are many out there like me who do listen to both shows and really do want both shows to exist.
Posted by: recordindustrypro | March 8, 2007 12:28 AM