Music execs concerned with satellite radio merger
A merger between Sirius and XM might lead to "more choice and better prices" for consumers, but many record label executives are concerned about the merger's implications, according to a recent Reuters article. Some label promotion representatives polled by Billboard feel that the reduction of redundant formats could lead to fewer promotion opportunities for niche formats. "It's great that their combined (channels) will have a larger audience but it's also at the expense of the exposure," Virgin Records VP of promotion Dave Reynolds says. "It takes away 50% of my chance of being exposed correctly."
"Both networks offer different ways to feature and launch a new project," said Brad Paul, senior VP of promotion at Rounder Records.. "I feel good about having both those options to go to."
Citing Arbitron's numbers, the top channel on Sirius (after Stern) is Sirius Hits 1 with 653,000 listeners, while the top channel on XM is Top 20 on 20 with 1 million.
"It's very rare to find a station like Sirius Hits 1 or XM 20 on 20 that will put in a new song and play it 21, 28, 35 times a week right off the bat," Virgin's Reynolds says. "That's really exposing a record."
"Satellite radio definitely had a lot to do with Sean Kingston's career," Koch Entertainment VP of urban promotion Shadow Stokes says. Rap channels like XM Raw and Sirius' Shady 45 have helped break a number of hip-hop acts, he adds, citing Sheek Louch, AZ and Yung Berg. Still, few executives that Billboard talked to could cite a specific case of Sirius or XM breaking an act.
Losing XM's The City and Sirius' Hot Jamz would be like losing a local station with naitonal reach, says Stokes. "You're talking about losing 40-50 spins," he says. "If you lose a piece of audience, that's always bad whether you're talking about a terrestrial station or a satellite station."
The article goes on to cite reps from metal, smooth jazz, and country genres. It's an important concern, and one that I said scares me the most over a year ago. There's a lot of nuisances between channels like Octane and Squizz, or Highway 16 and New Country, and in an effort to grab those "synergies" a lot could be lost.
Still, in my interview with Gary Parsons, there was one comment that the future Chairman of the merged company said that I think needs to be repeated:
"Clearly some of the synergies on a combination are on a longer term, and others are more near term. And while every expense category has an opportunity for improvement, it's not really the classic case of head count reductions... you know, fire a bunch of people. Because both companies are still growing strongly and they need to grow which requires that head count to grow outwards. That's not where the savings come from."
Here's to hoping that Gary's comments ring true, and the doom-and-gloom speculation from these music execs doesn't.
[Reuters]

Comments
AZ was mentioned in an article?!shifttwominusone¡
Sorry, an AZ fan and seeing that a Koch executive knows something about him gives hope to that artist. Plus, what he said is true. It's better for a guy like AZ to have more stations and different models to reach people. I'm not ready to believe in the "we'll expand in a shrinking marketplace".
Posted by: TK | April 23, 2008 4:57 PM
It's actually an article from the current issue of Billboard.
Posted by: Reader | April 23, 2008 5:40 PM
Look closely at what Parsons said. His remarks are broad.
If the merger occurs, expect some department staff numbers to be relatively unaffected or to even increase. Other departments will see a reduction.
Think about which departments will require more people in a company with twice the number of customers as before...and which will require less. It's not rocket science.
Posted by: Analyst | April 23, 2008 5:48 PM
Interesting that labels are recognizing the promotional value of satrad now -- aftet they push these guys to give more on revenue sharing.
Posted by: jack | April 23, 2008 6:12 PM
Well given that Parsons has presided over the greatest waste of shareholders' money in some time his statement is scary. Hopefully Mel will be making all decisions at the merged company and Gary can continue smiling as Mel tries to undo some of this hiring mess of the alst 4 years that Gary has allowed as if he is on mars.
Posted by: Anonymous Coward | April 23, 2008 6:26 PM
Well given that Parsons has presided over the greatest waste of shareholders' money in some time his statement is scary. Hopefully Mel will be making all decisions at the merged company and Gary can continue smiling as Mel tries to undo some of this hiring mess of the alst 4 years that Gary has allowed as if he is on mars.
Posted by: Anonymous Coward | April 23, 2008 6:27 PM
Let me get this straight. The SOB's from the record companies are bitching that their records might not be played as much as they would like and then are comparing satrad to a terrestrial station with national reach. Wait a minute! Satrad pays for each time that record is played while the terrestrial stations do it for free. If satrad is paying for the "priveledge" then is is none of the record companies exec's business what the hell satrad play. Those bastards have been a pain in the ass since the git go. They can go to hell. It's just more of that last minute posturing while trying to derail the merger. Give it us, the merger is going to happen.
Posted by: Paul | April 23, 2008 6:42 PM
I read his statement to mean that people behind the music will lose their jobs but the new company will need more lawyers, executives, IT people, markerting, PR, everything except what all their customers care about and subscribe for.
Posted by: pfreak | April 23, 2008 7:06 PM
JHC on a palomino. Is there ANYONE who can avoid opposing the merger. It's two companies people, not the marriage of Mohammed and Jesus Christ
Posted by: waitwhat | April 23, 2008 7:28 PM
Two Comments:
1: The record guys do have something to fear. Once the a-la-carte pricing comes, the companies will be able to assign revenue to each channel. The ones that don't have that many separate subscriptions will not be responsible for that much revenue, so when the sat rad companies have to pay up to the record companies, all the niche formats are going to get less cash coming in. The hits channels will pay a lot to their artists, but bluegrass, jazz, and the other formats that have been pushed out of terrestrial radio will find less money coming in from satellite radio.....and what do you know, they are upset about it. I am tired of making money for the RIAA, the MLB, the NFL and Howard Stern and his agent and GM, Ford, Chrysler and the other automakers.....isn't it time the stockholders who put their money at risk to get these companies going and keep them going get some reward ?
2: Gary Parsons has done a better job as chairman than Joe Clayton did....he was the spendthrift that just about bankrupted both companies. Sadly, if Mel's history is a guide, Gary will have almost nothing to say about how the company is run. Chairmen only matter on 4 days a year when there is a board meeting unless the CEO takes direction and Mel doesn't. Look at Westinghouse.....once Mel got in the Chairman was removed within a year. Expect Mel to slash and sell....that's what he does.
Posted by: Anonymous Coward | April 23, 2008 7:50 PM
>>> Citing Arbitron's numbers, the top channel on Sirius (after Stern) is Sirius Hits 1 with 653,000 listeners, while the top channel on XM is Top 20 on 20 with 1 million.
"I'm shocked, shocked to find gambling going on in here!"
WTF? Why are we, all of a sudden, concerned about this? It has been abundantly clear for the last year that the merger would REDUCE consumer choice, reduce the play received by more obscure artists, and now, suddenly, after DOJ allows the merger, we're going to be concerned about it?
What a laugh. It is going to be a freaking monopoly. You ASKED for it. It is what you all wanted. Now, you're going to get it, and you want are concerned about what it will do to the content?
Content is going downhill. Why? Because without competition, it is obvious what will happen.
Even funnier is a record company exec complaining about it. When XM and SIRI write the check, the record companies have no grounds to complain what it is they choose to play.
It is strange to me that overnight, we're all uptight about the content. Of course it is going to suffer. There was never a doubt in my mind about it.
Posted by: Stack Pointer | April 23, 2008 8:07 PM
Who respects Gary Parsons? .... Not me!
Isn't he the guy that paid Panero to fly XM into the ground, supported him faithfully, and paid the asshole a few million to leave after Panero dumped his stock and trashed his shareholders?
Gary Parsons is an incompetent just like Kevin Martin... in fact, I think they have the same daddy..George Bush!
Mel Rules! ... After the merger Mel, dump his worthless ass will you?
Plowboy
Posted by: Plowboy | April 23, 2008 8:19 PM
People who know what went on (and still goes on) at Xm know that Parsons could have fired Panero anytime he chose. No one can figure out why he let him repeatedly pound the shareholders for years like he did (and anyone internally who disagreed with Panero's always wrong gut instincts. As for now with Nate and the other stumblebums his only concern is covering up the coverup of Panero's (and the others') insider sales and the lies told afterwards about the Toyota deal.As bad as Siirus's deals have been none have been as bad as MLB, SBUX and the Oprahless Channel.
Posted by: Anonymous Coward | April 23, 2008 9:07 PM
@Stack, and the article: "WTF? Why are we, all of a sudden, concerned about this? It has been abundantly clear for the last year that the merger would REDUCE consumer choice, reduce the play received by more obscure artists, and now, suddenly, after DOJ allows the merger, we're going to be concerned about it?
What a laugh. It is going to be a freaking monopoly. You ASKED for it. It is what you all wanted. Now, you're going to get it, and you want are concerned about what it will do to the content? "
Again: IT'S A PHONY ARGUMENT. As long as the two networks are segregated, and 99% of the listeners SUBSCRIBE TO ONE OR THE OTHER, eliminating the redundant station in whatever format, DOES NOT EFFECT "CHOICE." Sirius can dedicate all 130 channels to "obscure artists" if it wants. It ain't gonna mean jackshit to anyone who subscribes to XM.
Get it now? The argument is horseshit. How do you get "exposure" if you're not heard in the first place?
Posted by: Max | April 23, 2008 9:40 PM
@Stack, and the article: "WTF? Why are we, all of a sudden, concerned about this? It has been abundantly clear for the last year that the merger would REDUCE consumer choice, reduce the play received by more obscure artists, and now, suddenly, after DOJ allows the merger, we're going to be concerned about it?
What a laugh. It is going to be a freaking monopoly. You ASKED for it. It is what you all wanted. Now, you're going to get it, and you want are concerned about what it will do to the content? "
Again: IT'S A PHONY ARGUMENT. As long as the two networks are segregated, and 99% of the listeners SUBSCRIBE TO ONE OR THE OTHER, eliminating the redundant station in whatever format, DOES NOT AFFECT "CHOICE." Sirius can dedicate all 130 channels to "obscure artists" if it wants. It ain't gonna mean jackshit to anyone who subscribes to XM.
Get it now? The argument is horseshit. How do you get "exposure" if you're not heard in the first place?
Posted by: Max | April 23, 2008 9:40 PM
Wahhhh! my music won't be on the radio as much if they merge.
The logic behind this statement is flawed because he refuses to admit that sat radio is competing with terrestrial radio, ipod, internet radios etc....
It's so easy to see that they do compete with all the media out there. If it didn't why would all the people trying to stop the merger even bother?
any person who listens to the radio would be lying to themselves if they can't see by their own experience every day proves that all these media outlets compete for listeners.
since when has anyone cared about consumers???? it's about the money and a merger means a stronger competitor in the multimedia market. I know it, you know it and so does Dave Reynolds. and every other record exec and media executive.
Theyre shakin in their shoes because a strong satellite company will really shake up their world and they might actually have to do something innovative to win back listeners like me who are so sick of all the ads and boring content that they listen to satellite radio because its much better than regular radio.
Deal with it! It's gonna happen and you can either adapt or get phased out like an old 8 track tape.
Posted by: trevor | April 23, 2008 9:53 PM
hey anonymous coward.
Youre wasting your breath. aint no one here gonna buy that horsecrap about reduced consumer choice.
anything that disappears will do so for a good reason... cuz no one cares about the content...
I subscribe to sirius. I also wish i had access to some xm channels. if they merge I now have more choices!!! sweeet!
youre probably in a job where you could potentially be affected negatively by the merger. you're definitely not a subscriber because I have not heard even one subscriber complain even once about this being a raw dal for them. I cannot think of any reason a subscriber would be opposed to it, nor has anyone given a logical reason that we would be opposed.
funny how that whole business strategy of listen to your customers has been completely ignored by record companies and radio stations.
they continue to force feed us crap, but now we consumers don't have to eat it anymore !!!!
Posted by: trevor | April 23, 2008 10:09 PM
oops I meant Stack Pointer, not anonymous coward
Posted by: trevor | April 23, 2008 10:13 PM
Well, Trevor - I am a subscriber to both services who agrees with Stack Pointer - we will get less choice if there's a merger! If you can't see that, get your head out of your ass! Some niche channels will be lost, and some types of music will no longer be heard! Who are YOU to say that they didn't deserve to be heard in the first place? Who made YOU the arbiter of what should or shoudnt be on the radio? When YOUR favorite channel is lost due to the merger, we'll see what you have to say then. Oh, wait....you probably listen to the most common, most-heard channels on all the radios. Excuse the hell out of me.....
Posted by: Anonymous Coward | April 23, 2008 10:36 PM
>>>>>>Again: IT'S A PHONY ARGUMENT. As long as the two networks are segregated, and 99% of the listeners SUBSCRIBE TO ONE OR THE OTHER, eliminating the redundant station in whatever format, DOES NOT EFFECT [sic] "CHOICE."
There is absolutely no way this merger occurs and at least SOME of the existing programming isn't eliminated in favor of merging the channels. Not going to happen.
I would point out that arguably the most knowledgeable of the analysts, Peck, has indicated that an amount equivalent to XM's ENTIRE in-house production budget will be cut from the combined company within 2-3 years. While I'm the first to say that synergies estimates are utter bullshit, I doubt that Peck is just making that up. Furthermore, remarks by company officials have supported the notion that there will be combinations of existing music channels -- what we don't know is to what extent it will occur.
So, it would appear to not be a question of "if" but one of "how bad is it".
Posted by: Stack Pointer | April 23, 2008 10:44 PM
Plainly, clearly, this is a strawman.
All that's going to happen is if you listen to country, you'll get that fancyass new record spun, but with double the audience.
Don't give me this nuance garbage. This station is *slightly different*. Well, come back Tuesday, and that same station is slightly different anyhow. If anything, it will mean LESS REPETITION, something that many of the stations need anyhow.
What you should do, if you're an exec of a record label, is cozy up and get heard more by more people. How? Well, considering that SIrius has to pay them for the right to play that track, record labels should be kissing ass to get airtime. They should be asking for a merged company to keep both top-notch stations. There is room for two Hits stations. Let's get a transition where they keep their full spectrum, and then the record labels will get what they want.
So if you want a take-away, Mr Recording Exec, it should be to call Kevin Martin up and tell him not to let Jesse Jackson steal spectrum!
Posted by: Mat | April 24, 2008 12:16 AM
@Stack: "There is absolutely no way this merger occurs and at least SOME of the existing programming isn't eliminated in favor of merging the channels. Not going to happen."
No one is denying that, and never has, Mr. Goebbels. Furthermore, why is music "diversity" (how I hate that word) now falling on the shoulders of the satellite radio companies? You lapped up that phony idea like mother's milk.
Ever hear of the Internet, Stack? That's how it's done these days. This argument is total bullshit.
Since the SatRad medium is in affect (sic) less than a decade old, I guess we can now extend your logic by claiming it CREATED music diversity.
Lemonsucker.
Posted by: Max | April 24, 2008 8:23 AM
"Well, Trevor - I am a subscriber to both services who agrees with Stack Pointer - we will get less choice if there's a merger! If you can't see that, get your head out of your ass!"
Most people don't subscribe to both services, and see no value in doing so. For someone who did, they would get less choice. But that's not even an issue.
"Who made YOU the arbiter of what should or shoudnt be on the radio?"
No one did- the people who actually run the company and get paid for it will make that decision.
Sorry.
Posted by: Max | April 24, 2008 8:26 AM
OMG, content providers are upset that the merger will lead to fewer outlets for their product. What a shock! Unfortunately, its too late for these foks to stop the merger. Only NPR had the smarts and guts to tell the FCC it was a bad idea.
Posted by: jose | April 24, 2008 9:26 AM
Ever hear of the Internet, Stack? That's how it's done these days
Yeah, because everyone has internet in their car to listen whenever they wish. Most people listen to radio in their cars, trucks, etc. I don't know about you, but my internet connection is spotty when I'm traveling 70mph down the freeway.
Posted by: Ranger | April 24, 2008 9:56 AM
@ranger: Ever hear of the Internet, Stack? That's how it's done these days
Yeah, because everyone has internet in their car to listen whenever they wish. Most people listen to radio in their cars, trucks, etc. I don't know about you, but my internet connection is spotty when I'm traveling 70mph down the freeway"
You're confusing two issues. Exposure for an artist does not come from radio anymore, no matter how it is broadcast. YouTube is more responsible for music development than the labels are today. These music "execs" don't give a damn about A&R. They sell plasticware.
Posted by: Anonymous Coward | April 24, 2008 11:59 AM
@ranger: Ever hear of the Internet, Stack? That's how it's done these days
Yeah, because everyone has internet in their car to listen whenever they wish. Most people listen to radio in their cars, trucks, etc. I don't know about you, but my internet connection is spotty when I'm traveling 70mph down the freeway"
You're confusing two issues. Exposure for an artist does not come from radio anymore, no matter how it is broadcast. YouTube is more responsible for music development than the labels are today. These music "execs" don't give a damn about A&R. They sell plasticware.
Posted by: Max | April 24, 2008 11:59 AM
Does it really make a difference if you get 50 spins to two smaller audiences each or 50 spins to the same audience combined? Seems about the same to me.
Providing a benefit to the artist/music biz? This is the same argument testicle-less radio uses to NOT pay for music and pretend that it is unique to their medium.
Posted by: Anonymous Coward | April 24, 2008 1:03 PM