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. 

Mel Karmazin just told the House Judiciary Committee antitrust task force that if terrestrial radio is not competing with satellite radio, then "they are lying" to the SEC.

Just as a reminder to those who didn't catch it - several terrestrial radio companies have stated in their own SEC filings that satellite radio (as well as Internet radio, and MP3 players) directly competes with terrestrial radio. These statements constitute admissions by law.

I'm really happy that Mel has driven home this point. 

When questioned about the XM/Sirius merger in front of the House Judiciary Committee antitrust task force, Mel Karmazin was asked whether he would agree to pricing restrictions for the newly merged company.

"Yes," Karmazin flat out said.

When asked whether he would be able to agree to this for a four year period of time, Karmazin stated that he would be happy to discuss it with the necessary people. There was some joking back and fourth whether the timeframe would span within 2 weeks to 4 years, but in the end no timeframe was actually specified.

Karmazin was also asked whether he would agree to not transmit local content (local news/weather) and he clearly stated that they have no intentions of entering into the local market.

Gigi B. Sohn, co-founder and President of Public Knowledge, testified in front of the U.S. House Judiciary Committee antitrust task force hearing on the proposed XM/Sirius merger. Interestingly enough, Gigi was actually in favor of the merger.

...but on a few conditions:

1. The new company makes available pricing choices such as a la carte or tiered programming.

2. The new company makes 5% of its capacity available to non-commercial educational and informational programming over which it has no editorial control.

3. The new company agrees not to raise prices for three years after the merger is approved.
   

...and I really can't say those are unreasonable expectations. In fact, I fully support them.

The House subcommittee on telecommunications will hold a hearing next Wednesday, March 7th that will include a look at the proposed Sirius-XM merger.

Mel Karmazin will appear before the subcommittee to review the merger and the future of radio.

US Representative Edward J. Markey, a 16-term Massachusetts Democrat who heads the subcommittee (and who was chairman of it 12 years ago), said that over the next two years he will focus on fostering competition that will benefit consumers.

"We're going to go back to the beginning, to begin to talk about the whole nature of these" issues, Markey said. "Now, for the first time I have the gavel back again, and I plan to highlight competition."

Markey also said that under a Republican-controlled Congress and FCC, consumers have suffered with the slow spread of broadband and a lack of competition to telephone and cable companies.

Looks like there may be trouble coming next week.

[Reuters and The Boston Globe]

USA Today has a very nice feature with Sirius CEO Mel Karmazin on the XM/Sirius merger.

From questions about the merged company raising prices, to the sharing of XM-Sirius content, to dual receivers and what exactly the cost-savings are - the Q&A is quick and concise. And hopefully it will answer some of the questions that you all may have.

Obviously there's more questions, and probably not enough answers at this time. That's sort of the way it goes when you have a merger (anyone who's been through one can attest to that). But just remember that we're barely over a week through this... so give it some time.

[USA Today] 

So now that we have the full data from both XM and Sirius for 4Q06, let's look at my favorite metric: gross subscribers. Again, the reason why I like looking at gross subs is because it shows an untainted view of market penetration. 

And what a difference a year makes.

Looking at 2005, it's clear that XM held the dominating position in gross subscriber additions. Even in the fourth-quarter of 2005, XM still held out past Sirius even despite "the Stern Effect" (now being referred to as "the Stern Bubble" by Sirius management). When 2006 rolled around, XM still continued to hold its own, but by Q4 Sirius made a massive jump.

For the first time in satellite radio history, Sirius outpaced XM in gross subscribers for the quarter. This is significant.

Sirius now is at nearly the same number of subscribers as XM was a year ago. In 2006, the reasoning behind XM's poor net subscriber additions was that churn restricted net growth. I'd be interested to see if Sirius follows this trend, or whether they will be able to learn from XM and keep churn in check.

Either way, it's clear that for the moment, the tide has turned.

XM Satellite Radio and the Knitting Factory have teamed up to create the alternative music performance series called "Live From The Knitting Factory on XMU" which will premiere on March 2nd on XMU (ch 43).

The weekly concert series will feature performances from both up-and-coming and established alt bands recorded at Knitting Factory clubs in New York and Los Angeles. XM and the Knitting Factory first announced their partnership back in April of last year.

Art Brut, Beauty Pill, Chin Up Chin Up, Georgie James and Portastatic, among others, will be featured during the first season of the series. The British duo, The Boy Least Likely To, will kick off the new series on Friday, March 2nd at 10pm ET on XMU.

Here's the schedule for "Live From The Knitting Factory on XMU" for March (all performances are on Fridays at 10pm ET):

March 9 - Art Brut
March 16 - Mazarin
March 23 - The Broken West
March 30 - Portastatic

To coincide with the launch of "Live From The Knitting Factory on XMU," music fans will have access to XMU throughout March on the AOL Radio Network.

It looks like ReachMD has pre-announced their arrival on XM Satellite Radio for the Spring of 2007.

This is highly uncharacteristic of XM as most channel announcements usually come from them and not the content partner. But who am I to judge (can you say Radio Wasabi?).

Either way, ReachMD is supposed to be targeting the medical professional community with a 24/7 channel centered around general medical content as well as specialty content. It will also feature clinical research updates, policy reports, regulatory information, conference coverage, lifestyle segments and best healthcare practices.

Sounds, truly fascinating.

(Psst, can we please get a 24/7 TechTV-style channel? Seriously, there's a lot of geeks out there who would kill for the likes of Leo Laporte and Kevin Rose on satellite radio.)

As I'm reading coverage on the XM/Sirius merger, there's a common point of reference being brought up when the media looks to find prior parallels, and that obviously is the EchoStar/DirecTV deal.

Understandably because the two seem very similar (I used it myself in the past). Echostar/DirecTV is afterall probably the only precedent to work with. Both involve two companies, broadcasting via satellite, and the only difference is that one does video, while the other does audio. Sounds simple right?

Except that in 2002, the definition of the "relevant market" involved only satellite and cable (also known as the MVPD or "Multichannel Video Programming Distribution" market). Even "free" television is delivered through satellite or cable because receiving television via the ol' rabbit-ears just isn't a viable alternative (so much so that in 2008 the FCC is selling off the VHF side of the spectrum).

EchoStar and DirecTV used the argument of spectrum, and the fact that both companies use the same spectrum for "overlapping programming services," as their main case for why they need to do their merger. They felt that by combining their spectrum, there would be a more efficient use of the available spectrum, and thus they would be able to provide better services to the customer. In terms of pricing, EchoStar/DirecTV would promise to keep their pricing inline with the overall national price of MVPD services. In short: the merger would give them more bandwidth and they promise to stay competitive.

So with only satellite and cable occupying the same space, what is the alternative to consumers who cannot receive one of the two? Cable is fragmented among multiple companies so there's no monopoly there (an arguable point, but I won't get into that), whereas with satellite TV there would be only one player. It would create a monopoly in areas where there is no cable service - and so it wouldn't be "in the best interests" for the public.

There was no YouTube (which even to this day is no where near 'competition' to TV) or Slingbox (which still requires a subscription to cable/satellite) or MediaFLO or video via mobile phones, etc. The Internet and other high-speed services did not provide any reasonable level of a service to be considered as part of the relevant market. EchoStar/DirecTV were without question part of the MVPD market, and even with the advance in technologies it's a pretty hard case to try to redefine their competitors. But the main problem with the EchoStar/DirecTV merger attempt the argument of spectrum efficiencies just wasn't compelling enough for the FCC.

With satellite radio, there's plenty of coverage from terrestrial radio, not to mention all the other mediums vying for your "earshare" (I really like that term by the way). And the competition for satellite radio is largely free competition, not other pay-services. So prices are theoretically kept in check by the laws of good ol' capitalism (rather than mandated, though I'm sure XM/Sirius are open to government mandated pricing restrictions). XM/Sirius have two main hurdles they need to overcome to get this to pass: Redefining their market (DoJ) and ensuring that they're serving the public's best interests (FCC).

So when Michael Powell says, "It’s going to be incumbent on the companies to demonstrate that the analysis in EchoStar-DirecTV is different." Then that case is pretty much a slam dunk.