The calm before the storm...

This story has been posted for a whole 16 mins already and Stern Fan Boy, Anonymous Coward has NOT yet turned this into an O&A bashing thread. Geez, he's really slipping. Doesn't he turn everything into an anti-O&A tirade, spouting inaccuracies and lies?

Ryan what did Tug McGraw of the Mets say in 1973 - Ya Gotta Believe!!!!!!

Lets hope you are right Ryan. Ya Gotta believe!!!!

The trading was quiet as well ( to reflect on your observation).Xm experienced a 1 hour run today where it traded within a 5 cent range. Thats unheard of.

The trading was quiet as well ( to reflect on your observation).Xm experienced a 1 hour run today where it traded within a 5 cent range. Thats unheard of.

Well, hopefully Mel Karmazian was in the tanning booth today in case there is news tomorrow.

Mel was in the tanning booth, planning how he's going to break the news to the hack radio bags of shit over at XM to pack their bags and clear their offices out for Bubba and Ferrell.

DOWN GOES 0.0! I can hardly wait, and could care less. Nobody cares about these douches.

Shall we dance, i prefer wet willie's "keep on smilin"

Ramoooooooone! Ron and Fezzzzzzzz rule.

>>DOWN GOES 0.0! I can hardly wait, and could care less. Nobody cares about these douches.

You do...'cause you can't stop talking about them. Why don't you just admit you listen? It's nothing to be ashamed of. Hoo Hoo's writing staff listens too, trying to find new fart jokes to feed to their master.

After being intimately involved as a small investor (off and on) in these two companies for about 8 years, predicting anything about them is just as difficult today as it was back then.

As XM eagerly looked forward to rolling out its service, 9/11/2001 forced a rescheduling. Later, we watched as XM's share price dropped below 2 and SIRI hit 39 cents. Then, the refinancings -- SIRI actually was prepared to file for bankruptcy if their financing deal didn't go through; it literally could have gone either way in the space of a day. It had been pretty clear that XM would get theirs, since GM had committed itself to the factory installs. But SIRI could have ended right then and there. Instead, they woke up with ZERO debt and a billion in cash in the bank. Joe proudly announced, "we're fully funded"....

SIRI's Joe Clayton then had the Big Marketing Idea: We'll hire Pamela Anderson to wash someone's car, and at the same time, we'll give away $1,000,000 to someone and allow them to designate a person to receiver another $1,000,000. $2M, big publicity, how can you lose. The Big Day came and went, and WTF? Where's the $2 Million? Finally, if you googled it hard enough, you found out -- a guy in NE Arkansas won the $1 Million, and amazingly, decided to appoint his WIFE to receive the OTHER $1 Million. WHO WOULD HAVE FIGURED THAT? Someone tells me they'll give a million to my designee. Now, who in hell am I going to pick for THAT?

Would SIRI make 320K subs or not? Then, Clayton cut the number to 300, then finally, to 200K. But NFL would save the day, no? Clayton says on TV, "Of course, you KNOW I'm trying to make a deal with MLB". A week later, XM announces its deal with MLB.

Stern is doing live reads of XM ads -- it must mean Stern is going to XM. Next thing we know, XM has O&A, SIRI has Stern (for $500M!). Nope. $600M? Nope. $700M? At least, but we now know it will be more than $750M. My, oh my, how a couple years change everything. SIRI has nearly caught up with XM in subs? Nope, not quite (in fact, SIRI has narrowed the subscriber gap by only 600K since hiring Stern if you count only REAL subscribers).

For me, one of the most memorable times will always be the Bogus Midnight PR. True drama in the satellite radio business. XM cuts a factory install deal with Toyota and Parsons will appear on CNBC at 6am the next day to announce it. Sirius, in its efforts to claim part of the Toyota prize, releases a PR at midnight the night before, CLAIMING to have a deal with Toyota. Why are they quoting officials from PENSKE if they made a deal with Toyota? WTF? Finally, in '07, 3 years later, Toyota sets the record straight with XM factory installs.

Then, there was profitability. Way back when, we thought both companies could be profitable with a few million subscribers each. Now, we have both companies scrambling to mischaracterize their finances in a way that people will believe they have a chance.

You just can't predict this stuff. The merger? You knew Mel wanted it, but who thought Parsons would go along with it. Even if Parsons agreed to the merger, who would have thought Mel would be able to run over him like he did?

Merger could come tomorrow. Or maybe they just decide to put it off until next June. Who knows?

Well, been following this dog since late 2002. Made a bundle off it and had a couple years where didn't make a bundle....hwever, I believe it to be a "bundle year"...and patiently wait. Nice picture of the storm.

In the 11th hour Stack Pointer makes it about himself. I was riveted, nonetheless .

How does the saying go a watched pot never boils?

Good read, Stack.

And of course, a day without Anonymous Coward bashing O&A is like a day without sunshine.

Funny, Anon. You say no one cares about these "douches".

You seem to care an awful lot, you mention them every chance you get.

Are you secretly queer for Opie or something????

lol @ commenters thinking that "anonymous coward" is just one person comment-whoring the blog...

zero. point. zero.

You guys (posts) are so funny to read....helps me get thru the slow drip water torture of this merger or non merger...

Thanks

Great read Stack, and I am almost in the same boat as a former investor.

My namesake used to mean I loved both the services and the stock, but that made a dramatic downturn when these two companies ridiculously overpaid for content, constantly downgraded when they would reach profitability and deceived the way they count subscribers, bogus deals, and the list goes on. See where this is heading? Two companies that had it so right in the beginning, turned so horribly wrong in the last 3-4 years.

XM was on a rocket ride to profitability back in '03, and all SIRI had to do was ride XM's coattails to be profitable a short while later, and we'd be sitting here discussing how great both the services AND the stocks are, without a bogus merger to save the portfolios of the fools who thought the constant spending, lack of foresight (biggest being lack of balls in getting all car manufacturers to make SDARS factory STANDARD equipment earlier) should be rewarded.

Here we sit on the verge of a possible end to what could have been. Even IF they merge, profitabilty is still many, many years away.....if at all.

>> a dramatic downturn when these two companies ridiculously overpaid for content,

I can recall the day SIRI announced NFL for a deal totaling about 320M. I thought the price they had paid was insane given they had less than 200K subscribers. It was stupid, and I said at the time it would be remembered as the dumbest deal in the history of sat radio. Little did I know the Stern deal was coming which made the NFL deal look like a brilliant decision!

What if XM had stuck to its guns? Would SIRI have paid a half billion for MLB and would they STILL have been able to buy Stern later on?

What if none of this had happened and the focus continued to be on music and less expensive talent?

I think the industry would be unstoppable right now had Sirius had competent management from the outset. But the NFL deal, followed by XM's MLB deal, followed by Howard Stern -- a total of $1.6 Billion over the span of those contracts (at a time when none of these deals made the slightest sense) destroyed the industry.

If they just focused on the music instead of the content, it would be a lot harder to differentiate from the cheaper alternatives. "Commercial-free" and "don't have to synch up your music" would be tougher to sell than emphasizing the content. This is why XM is losing retail subscribers now - the other music providers can pretty much play the same songs as XM, minus the subscription fee, and XM doesn't have enough content to keep some people from leaving.

That's why Sirius has had nearly a 2:1 lead at retail for the last 3 years - for the better perceived content. Now I will concede that it's debatable whether or not they got their money's worth - it all depends on how many more subscribers they have now versus how many they would have had w/o those contracts, which nobody here really knows for sure, including you Stack. I am fairly sure though that without that content, Sirius would have died 3 years ago and there wouldn't be any merger discussion right now.

Ramoooooooone! Ron and Fezzzzzzzz rule

Stack's post is awe inspiring.

Yeah, right, it's all management's fault. Nothing in the marketplace has changed since signing NFL and Stern. It amazes me how myopic some people can be.

See iPod sales here:
http://en.wikipedia.org/wiki/Image:Ipod_sales.svg

See Napster info here:
http://en.wikipedia.org/wiki/Napster_%28pay_service%29#Sales

I have 2 opinions about Stern:
1. He is paid too much.
2. He saved the SatRad industry.

But hey, if you want to ignore what happened out there in the broad spectrum of audio entertainment since 2002, go ahead and blame it all on the management.

As for me, I'm looking at Mel's long career of building financial wealth for his stockholders. I have every confidence he will repeat his past performance here over the next 2 years. This merger, if (hopefully) approved, is the first real step in that process.

Carrot boy (better known as Mel) is awaiting the decision in front of his lawyers if he doesn't get his way :D

I'm so glad that the FCC and DoJ are taking their time, making sure they get the right answer. As a shareholder, this is comforting to know that they are so dedicated in finding the correct solution.

As a consumer , and a proud owner of a new GM car, I'm anxious to here Classic Rewind and XM 26 on the same receiver.

>>>> This is why XM is losing retail subscribers now - the other music providers can pretty much play the same songs as XM, minus the subscription fee, and XM doesn't have enough content to keep some people from leaving.

No it isn't. XM is losing retail subscribers right now for the same reason SIRI's retail subscribers have totally tanked. XM's retail performance last quarter was STELLAR when compared with SIRI's, if you take into account that SIRI has spent 3/4 billion dollars to get Stern, which is SOLELY a retail event.

Retail sucks. It is simply not the marketplace for satellite radio. While Stern brought SIRI subscribers, it will NEVER be enough to pay for him, and Mel Karmazin knows it. The way you get subscribers for sat radio is to allow potential subscribers to try the product. The only way to do that right now is through OEM promos. The Stern deal brought subscribers, but it was temporary, transitory, and costly. And there are no more "Sterns" (Limbaugh could bring a lot of subscribers, but he's not moving).

>>> That's why Sirius has had nearly a 2:1 lead at retail for the last 3 years - for the better perceived content.

No, not at all. Sirius has had a lead at retail because of the NAME RECOGNITION brought by Stern. Before Stern was hired, nobody knew of Sirius. After Stern was hired, when they went to Best Buy, the only brand they knew was SIrius. Who's XM?

Most of the 3/4 billion paid to Stern was not "content" expense. The vast majority was "promotional", by any reasonable analysis.

Retail simply doesn't matter. Yes, XM lost net retail subs last quarter. But Sirius only added 64,000. When you consider what Sirius spent on Stern for a solely retail benefit, 64,000 is paltry, embarrassing, troubling, and shocking. And while Mel wouldn't say it, he knows he has a hell of a problem.

So many ungrounded assertions masquerading as facts on this board. I wish there were an "ignore" feature here.

You guys all forget a couple of things. Siri "lead" and "growth" in subs is only that if you ignore simple mathmatics and accounting. Several people mention "leaving" referring to XMs subs without knowing XMs churn is actually slightly lower then sirius(in simple terms less self paying subs leave XM). As for retail if the WHOLE sector was not down 35% year over year I would say this is a worth while argument. XM hasnt given up on retail but they are close. I can tell you as someone who has had an aftermarket sub and an OEM sub there is no comparison. Its clunky and the value prop for a retail sub from a subscriber standpoint is not that amazing. Poor reception, pain in the ass to use the receiver, etc. So at some point the non early adopters and tech people would start to fade. Forget sat radio, lets look at Navigation products. A much "hotter" product then sdars at the moment. I have ZERO interest in buying a dashboard nav system. However in my new tahoe there is one and I use it all the time and love it. So retail I believe is not about people not liking sat radio, its just not a mass market way to deliever it (i mean what drove car CD players getting a replacement stereo or a car that came with it?)..Also for all you talking about the "overpriced content" I agree they could have maybe made more favorable deals, but its funny how many posters play armchair quarterback (many who in their lives will never even smell a multimillion dollar deal or industry)..This industry is against a way different landscape then it was 5 years ago. Commercial free music is great. and a great argument against Terr Radio, but if thats all they went to war with through the end of this decade they would be finished. We are in an era where you are rapidly getting to the point where you can get what you want when you want and soon where you want it...So I believe their content will be necesarry to stay relevant. The music industy is rapidly changing and if they bet the farm on the commercial free music only as their main advantage they could be wiped out with one major shift in tech or the way music companies dist music. DOnt get me wrong its important to have, but its laughable to read everyone on here and the yhoo boards claim that if they were CEOs XM would be 9.99 and not have the MLB, Coll FB, Orpah, etc... Which is exactly why those people do NOT run a huge company..Anyway be careful what you say about subs, unless you go understand basic math about gross vs net, churn/base size, and accounting of when something is a self paying sub. You would be suprised on how this paints a different picture then many of you think exists.

Hopefully this all becomes irrelevant soon, they really need to decide on this merger..its getting a little absurd..

>>> I have 2 opinions about Stern:
>>> 1. He is paid too much.
>>> 2. He saved the SatRad industry.

This is maybe the dumbest remark I've seen on this thread or any other. Not that he was paid too much -- no doubt about that.

But Stern did NOT save the sat radio industry, he destroyed it. Anyone who watched this nightmare unfold knows this. While some people could argue he saved SIRIUS (and they would be wrong, but at least that point is arguable), nobody in their right mind would argue he saved the industry. Without Stern, XM would have been profitable today -- Sirius might or might not be, but XM definitely would be.

To say he saved satellite radio is just downright stupid. I'm hoping whoever wrote this remark made a typo or something.

Yes, that's intelligent discussion. If you disagree with me, then you are stupid. That line of argument is so old, worn out, juvenile, and oh so boring.

Like I said earlier, I wish there were an "ignore" feature on this board.

Opinions are like assholes, although I agree that Stern destroyed satrad.

I also think that both XM and Sirius overlooked a very large potential audience. Truck drivers. Yeah they needed us to get started but they really dropped the ball here. Where are the OEM installs? How about contracts with companies like Wal Mart which is one of the nations largest truckload carriers? They have big bucks and should have XM or Sirius in all of their trucks. But they just don't want to put any effort into getting that done, pretty ignorant.

JB: "If they just focused on the music instead of the content, it would be a lot harder to differentiate from the cheaper alternatives."

Good point JB, and I don't disagree. However, had XM and SIRI taken their time to reach profitablity first, instead of going nuts on spending, then they wouldn't have been broadsided had changes like the iPod come along.

XM/SIRI could've easily used some of that money to innovate....be the inventors of the "iPod" (partly addressing BruceInAustin's concern), then used the leftover to start stealing content from terrestrial after they were profitable. They needed to grab a better foothold first (by ensuring auto manufacturers made their receiver standard), and IMHO, they failed to do this.

I know it's easy being a monday-morning quarterback as bapamax pointed out (and his point about getting content how/where/when you want it......addressed by XM/SIRI being innovators instead of followers), but as a long-time investor in technology and distribution companies, these two guys should have done better. For you content lovers, don't get me wrong, content is always important, but so is grabbing content at reasonable prices, and especially after nailing distribution channels the right way.

Retail should never have been as big a factor as it was, and I believe Ryan (Orbitcast owner) posted a fantastic article about how hard it is to get Satellite in your car via retail receivers. It should *never* be that hard to get Satellite. It should be "Satellite Radio made easy", and that was by making it standard in autos.

BruceInAustin: "As for me, I'm looking at Mel's long career of building financial wealth for his stockholders. I have every confidence he will repeat his past performance here over the next 2 years. This merger, if (hopefully) approved, is the first real step in that process."

From purely an investor standpoint, your point is valid.

However, as a emotional subscriber (or purely as a listener), you only need to ask yourself one question: Who nearly single-handedly destroyed terrestrial radio. None other than Mel Karmazin. (Clear Channel is the other answer).

Permission to *gasp* granted.