hypebot

Liberty Helps Sirius XM Avoid Bankrputcy

Shares of Sirius XM Satellite Radio doubled Tuesday morning to a mere 20 cents on news that Liberty Media (DirectTV) will invest $530 million in the the beleaguered satelite radio company. The move rebuffs suitor Echostar (Dish Network) that allows allows Sirius XM to avoid a Chapter 11 bankruptcy filing. More:

• Marketwatch
  
• New York Times
• Washington Post

3 Reasons Sirius XM Will Fail

I hope I'm wrong. I love creative broadcasting, but with its stock sitting around 12 cents a share...

1. "...Sirius XM does have a serious flaw in its capital structure. Its costs, which include servicing its pile of debt, appear to be too high to make the business viable.” - The New York Times
2. There is no built in mechanism for knowing how many subscribers are listening to a particular channel at any given time. Programming decisions are made based on guesswork.
3. Internet radio + ubiquitous wireless = unlimited competition.

I hope I'm wrong. I love creative broadcasting, but...

Shareholders Sue To "Save Sirius"

Already battered by the economy and a sub-$1 stock price, Sirius XM faces a new challenge from a group calling itself Save Sirius. 500 incensed Sirius XM shareholders have banned together and accused  management of "unjustly enriching themselves at the expense of shareholders"  A lawsuit has been filed in the United States District Court in Southern California.

This suit seeks to prevent management from "further damaging its shareholders with massive amounts of additional dilution (8 billion shares in the fully diluted float) and as much as a 1 for 50 reverse stock split." "We are working to gain control of our company by seeking to remove current members of the board as well as top executive Mel Karmazin," said Michael Hartleib on behalf of Save Sirius and its members.

XM Sirius Merge. Does it Matter?

COMMENTARY:  Is it possible to be angry and not really care at the same time?  That's how I feel about the XM and Sirius merger.

It is finally official. The FCC has approved the merger of XM and Sirius. This despite that fact that the approval create a monopoly in US satellite radio.  Supporters counter that they needed it to survive. There may be truth to that, but I suspect the new combined company needs to do more than merge to fend of a rising plethora of competition. 

XM Adds 300K Subscribers & $400M Debt

XM Satellite Radio added 322,000 new net subscribers in the second quarter of '08 for a total of 9,653,000. This mark a 17% increase since the end of the second quarter of '07.

The company also announced an offering of $400 million senior notes. It's part of a series of transactions to refinance debt prior to the pending merger with SIRIUS. The offering will be structured in a manner that "will permit it to be unwound if the merger is not consummated".

EMI Settles With XM Over Inno

ALL FOUR MAJORS HAVE WITHDRAWN LAWSUIT

XM Satellite Radio and EMI Music today announced that they have resolved the lawsuit  brought in May of 2006 by EMI and the other three major labels against XM over its Pioneer Inno, a portable satellite radio with advanced recording features. The companies did not disclose terms of the agreement.

Similar agreements were announced in December 2007 between XM and both Universal Music Group and Warner Music Group and February 2008 between XM and SONY BMG. XM must still settle with several smaller labels and publishers.

Call For No Satellite Merger, $250M Fines

Ars says this may be an effort by a rival corporation, but whoever it is, give The Consumer Coalition For Competition In Satellite Radio credit for taking a strong stand on a controversial issue - should XM and Sirius merge? They're not just demanding hearings; they want the execs involved fired and fined $250 million.

"To counter the potentially dim prospects facing subscribers of satellite radio under a monopoly provider, a group of concerned Sirius and XM subscribers have formed the Consumer Coalition for Competition in Satellite Radio ("C3SR")...(we are) committed to opposing  the creation of a monopoly in satellite radio..."   - VIDEO AFTER THE JUMP

Top 10 Stations On Sirius And XM

Based on weekly cume via RAIN

At Sirius:
   1. Howard Stern’s “Howard 100”: 1,200,000
   2. “Hits 1” (CHR): 584,800
   3. “Howard 101” (description here): 501,100
   4. “New Country”: 468,300
   5. “Big 80s”: 417,900
   6. “Octane” (hard rock): 383,700
   7. “Classic Vinyl” (early classic rock): 347,100
   8. “Classic Rewind” (later classic rock): 335,500
   9. “The Pulse” (90s and contemporary hits): 330,000
  10. “Totally 70s”: 309,400

At XM:
   1. “Top 20 on 20” (CHR): 1,049,200
   2. “Flight 26” (modern AC): 741,600
   3. “80s on 8”: 698,300
   4. “70s on 7”: 687,400
   5. “60s on 6”: 581,300
   6. “Highway 16” (new country): 579,500
   7. “Top Tracks” (classic rock): 534,900
   8. “The Blend” (Lite pop hits): 532,400
   9. “The Heart” (love songs): 493,400
  10. “Fox News” (news/talk): 464,800

WMG Settles With XM Over Inno

XM Satellite Radio and Warner Music Group today announced that they have resolved the lawsuit brought by WMG over XM's Pioneer Inno, a portable satellite radio with  recording features. The companies did not disclose the terms of the deal.

A similar agreement between XM and Universal was announced on December 17. Both agreements are multi-year deals that cover current and future XM radios. Sony BMG and EMI remain parties in the original lawsuit against XM.

COMMENTARY: This deal happened just in time to show up on WMG's balance sheet this quarter. But Wall Street didn't seem to care; pushing the stock down another 3.54% to $6.00 in mid-afternoon trading. Thats a 5% drop from the 52 week high of $24. (Track the up to the minute stock price here.)
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Doug's Universal Toll Booth Collects From XM

Universal Music Group has settled a lawsuit against XM over a player that records XM programming by extracting a per unit fee from the satellite radio service similar to the per unit charge it gets from every Zune sold.

DEALS WITH DOUG -

Never one to be daunted by falling sales, Universal's Doug Morris seems determined to shore up  his eroding bottom line with payments from others who profit from their association with music.

Internet radio and satellite broadcasters are being asked to pay more by all the labels. Devices manufacturers from Microsoft to Nokia are cutting special revenue sharing deals with Universal as are services like YouTube. Then there's Morris's broader initiative to have all device manufacturers pay Universal and the other major labels for a "Total Music" subscription built into each player sold.  Sounds interesting, but the devil is usually in the details and thus far Morris has not provided any.

EXTRA CREDIT: "Universal Bans Song Streams, Cuts Nokia Free Music Deal. WILL THE REAL DOUG MORRIS PLEASE STAND UP?"

XM Plans 27 Hours Of Global Live Earth Coverage

XM will broadcast "Live Earth: The Concerts for a Climate in Crisis," the 24-hour, seven-continent concert series on July 7, 2007. XM's coverage will include 27-hours of continuous, live coverage from all nine concerts featuring more than 100 music artists.

The Live Earth concert series will begin in Sydney, Australia and continue across all seven continents to Tokyo, Japan; Shanghai, China; Johannesburg, South Africa; London, United Kingdom; Hamburg, Germany; Istanbul, Turkey; and Rio de Janeiro, Brazil, before concluding at Giants Stadium in East Rutherford, New Jersey.

Each city's concert will be broadcast live in its entirety beginning live at 9 p.m. ET on July 6, on XM's main Live Earth channel, "Live Earth All Access".   The channel will feature around-the-clock coverage with highlights of performances, backstage interviews and more, throughout the day.

Read the full schedule and complete press release after the jump.

Who Needs Broadcast Radio? Microsoft To Unveil Sync

Both General Motors and Ford will unveil a deal with Microsoft in the coming months that will put the software company's technology into some automobiles, The Wall Street Journal reported on Friday. The system, known as Sync, is designed to allow hands-free mobile phone communication and other wireless information transfers in the car, including email and music streaming and downloads sources told the WSJ.

With free unlimited streaming via the internet; who needs broadcast or satellite radio?

FCC Chair Says No To XM & Sirius Merger

Shares of XM and Sirius Satellite Radio plunged Wednesday after the chairman of the Federal Communications Commission send that FCC rules prevent a merger. The FCC rules that allowed the creation of the satellite business specifically forbid a merger between the two broadcsters

Investors took the comments to mean that Martin and the FCC won't agree to change the rules.  XM's shares dropped 9.9% to close at $15.43 on nearly triple its average trading volume and Sirius fell 7% to $3.86. (more @ BusinessWeek)

XM Adds 442,000 Subsribers in 4thQ

XM today announced that they added more than 1,695,000 new subscribers in 2006, ending the year with more than 7,625,000n. Based on preliminary results, XM achieved positive cash flow during the fourth quarter of. XM added more than 442,000 new net subscribers during the fourth quarter of 2006 alone. This compares with Sirius who ended 2006 with 6,024,000 subscribers, an 82% increase over 3,316,560 at the end of 2005.

"XM completed another year of significant subscriber growth, despite retail softness, and did so with continued cost controls, achieving positive cash flow from operations during the fourth quarter," said CEO Hugh Panero

Watch Out Sirius & XM! Internet For The Car Is Here.

Seamless wireless internet service is coming for your car. This year for only $49 a month. It won't matter if you're a Verizon, Cingular or Sprint customer. This one taps into them all via 3G and WiFi. Avis has already signed up. (WiFi Planet)

Watch out XM and Sirius satellite radio. Who needs you when there are thousands of channels to choose from?

Sirius Ends '06 Up 82% And Profitable

As merger rumors with XM continue to swirl, Sirius Satellite Radio ended 2006 with approximately 6,024,000 subscribers, an 82% increase over the company's 2005 ending base of 3,316,560. Based on preliminary financial data Sirius achieved its first ever quarter of positive free cash flow in the fourth quarter of 2006.  Rival XM still has more subscribers but is not yet profitable and growth rates for both have slowed in recent months. (details)

XM On Your iPod. Sirius On Your Computer And Cell.

The lines between new media and their delivery systems continue to blur as technologies advance and consumers demand multi-function devices.

Apple has filed a patent application that allows the user to tune "into a wireless signal (e.g. AM/FM radio, digital radio, or WiFi)" using either a wireless card or "the capability to accept accessories to add the necessary functionality" according to Orbitcast and Macintosh News Network. Later in the application, Apple names XM as a possible partner. (more)

And Sirius is pushing a new online subscription service as "Sirius Internet Radio" and promising exclusive online content rather than just as an add-on to its satellite service. The company has also just hired former VeriSign executive Tom Irvin who has considerable experience in ringtones and cellular furthering speculation that Sirius understands that their future does not with satellite delivery. (more)

Sirius Topped XM Subscriber Growth But Wall St. Punished Both

Sirius topped XM in subscriber growth for the 3rd quarter of this year gaining 441,101 net new listeners for a total of 5.1 million.  Their target for the end of the year is 6.3 million. 

Meanwhile XM gained 285,000 net new subscribers for a total of 7.7 million with 8.2 million promised by year's end.

Both took a beating on Wall Street amid rising concerns that the rapid subscriber growth needed to reach profitability would continue. XM dropped 62 cents or 4.9% to $11.96 in heavy trading yesterday while Sirius' shares fell 13 cents or 3.2% to $3.94.

AAA Radio Audience Loves Music Online

Radio consultancy SBR Creative has released it's latest study on the listening habits of the Adult Album Alternative audience. '"...the survey tracked over the two year period is 'which one way do you listen to music the most?' FM Radio 'is still by far...the way respondents listen to music most with 59% of the responses (down from 64% in 2004)...iPod/MP3 Player (10%) was up a whopping 425% from two years ago..."

"Streaming of radio stations and internet-only audio channels was another growth area over the past two years with 55% of respondents saying they’ve listened to local, out-of-town, or internet-only radio stations in the past month..."

"'So much media attention is given to the growth of satellite pay radio, but pay radio’s subscribers are a fraction of the number of listeners who are streaming on a regular basis...When asked to choose reasons why they listen to radio stations streaming on the internet rather than on the radio, over a third said it was 'easier' to listen on the computer than to the radio. One in four respondents said it was to 'hear programming that’s not available on the radio'..." 

Read the full 38 page report here. (pdf)

Google + XM = Opportunity For Music Marketers

Google has moved offline with a deal to sell ads on XM's non-new channels via it's recently purchased dMark internet based ad system according to Media Daily News.

Two thoughts:

• Since the ads are affordable; it certainly opens up some targeting marketing opportunities for music companies.
• This signals more ads on XM.  While the recenue may be needed; will subsribers who fled commercial broadcasters rebel?

Global Record Industry Drives A $100 Billion Market

International record industry trade group IFPI reports that global retail sales of recorded music totaled $33 billion in 2005.  But the record industry is also the driver of a much larger $100 billion market that includes live performances ($14 billion), online and brick and mortar retailers, cell and ringtone vendors, equipment manufacturers (portable player sales alone were $9 billion last year), radio ad revenues ($30 billion), performance rights and publishing collection, music magazines, and satellite and internet broadcasting. 

The IFPI report points out that music is the catalyst for a wide range of commercial activity and that this content "has been created without subsidy or special measures". They claim that "the recording industry is the principal investor in music talent and invests more than 17% of its revenues on the search for and development of new artists".  But no documentation is offered to buttress the 17% figure; and it is widely believed that more and more artist development is happening outside of the major labels at small indies, on the internet, at college radio and in the clubs.

Wherever it's orgin, "music is one of the leading creative industries driving the media and entertainment sector that now accounts for more than seven per cent of global GDP and a worth an estimated US $1.3 trillion - with experts predicting this figure will grow to US $1.8 trillion by 2009 (Source: PWC)," concludes the IFPI.

How Bright Is Satellite Radio's Future?

Hypebot has often taken the position that as good as satellite radio is; it will loose it's luster when 10,000 internet broadcast streams can be accessed anywhere via WiFi/WiMax without a paid subscription.  Investor site The Motley Fool says we're wrong in a lengthy analysis of the problems and competitors facing XM and Sirius.

I'll even take this one step further by conceding that a music-discovery site like Pandora.com or standalone Internet-radio appliances like the $400 Roku SoundBridge may temporarily quench some of the collective thirst for satellite radio.

Add it all up, though, and it's still not going to get in the way of a satellite-radio industry that has gone from 9 million subscribers to 10 million in the past three months and will top 15 million before the end of the year.

Read the full article here (free registration may be required) and tell us what you think.

XM Adds 10 Commercial Free Music Channels

XM Satellite Radio has announced a new channel lineup that will expand the total number to more than 170 with the addition of 10 new commercial-free music channels and seven regional news and talk channels coming this spring and summer. Sadly, there is nothing too adventurous here, but more commercial free music choices is always good news. The new music channels are:

    -- Big Tracks (XM Channel 49): Classic Rock from the late 70's onward
    -- XM Chill (XM Channel 84): Chill Music
    -- U.S. Country (XM Channel 17): Country Superstars of the 80s & 90s
    -- Flight 26 (XM Channel 26): Modern Hits of the 90's & Now
    -- XM Hitlist (XM Channel 30): Today's Hit Music
    -- enLighten (XM Channel 34): Southern Gospel
    -- XM Liquid Metal (XM Channel 42): Heavy Metal
    -- The Heat (XM Channel 68): Rhythmic Top 40
    -- Escape (XM Channel 78): Easy Listening
    -- Viva (XM Channel 91): Latin Pop Hits

Read the company press release here.

XM FALTERS: A Brief Analysis

Every music head's favorite satellite provider XM posted much wider losses in recent SEC filings despite significant increases in it's subscriber base.  Increased costs in hooking each subscriber was apparently to blame.  One member of the company's board of directors apparently lobbied for major cost cutting as a way out and resigned when his suggestions were rejected.

While XM is certainly not down for the count yet, one has to wonder about their long  term outlook with  cells, wi-fi and wi-max soon making thousands of music streams accessible everywhere for free. Satellite radio's business model has always been somewhat like cable's counting on the long term subscriptions from many millions of subscribers to cover expensive upfront costs.  Won't the cost of subscriber acquisition only rise and the rate of retention fall as competition increases?

XM's SEC filings can be viewed here.

Will Cell Phones Be The Real Radio/iPod Killer?

Since a lot of us don't have a print subscription to FMQB (and aren't really sure we need one anymore), you may have missed an interesting analysis on the future of radio by consultant John Silliman Dodge.  So we appreciated it when those nice folk at RAIN (The Radio Internet Newsletter) excerpted potions of  it in their newsletter Monday.

"If you thought iPods or Sirius or XM was a threat to radio, watch out for the cell phone. Last summer  the Wall Street Journal reported that despite the success of the iPod/iTunes industry, '... mobile-phone makers will sell more than 750 million handsets. With the rollout of full-track music download services…the wireless phone could become the music industry’s biggest and most profitable distribution channel...."Sprint Nextel is now in the radio business, working with Sirius. Cingular is in. Virgin is in..., Motorola has iRadio with 435 channels from Clear Channel; Nokia is getting in, CBS Radio is working with Hewlett-Packard on a "visual radio” concept..." music/talk /personality/ relationship/package that makes

"...The radio business needs to focus on the total package, to craft the completely branded us more compelling than any program-it yourself entertainment option. And now would be a particularly good time to do this work, now that the music, telecom, software and banking industries all plan to make cell phones their new one-stop delivery and payment channel."

Read more in RAIN here.

Sirius Hits 2.17Million Subsribers

(CelebrityAccess MediaWire) - Sirius Satellite Radio added more than 359,000 new net subscribers during the third quarter of 2005, reflecting continued strong demand for its service. The third quarter net subscriber gain represents a 97% increase in net subscribers over year-ago quarter net additions of approximately 182,000. Sirius ended the quarter with over 2.17 million subscribers.

Sirius expects to reach three million subscribers by the end of 2005. - Bob Grossweiner and Jane Cohen

XM Chief Speaks As Service Tops 5 Million Subscribers

Interesting interview in USA Today with XM CEO Hugh Panero just as the satellite radio service hit 5 million subscribers:

"We're reinventing radio the same way cabl reinvented television. So hitting 20 million subscribers by 2010 — some analysts say that satellite radio could be at 40 to 50 million by then — is really just a matter of us executing and expanding the places where satellite radio can go. We want to be everywhere..."

"...what people really love is music. We have 125 music directors dedicated to putting passion into our music channels. That's different than our competitor, who treats it more like FM. And advertising is not part of our music lineup."

"...And now we've added MP3 capabilities to our devices. People who are very busy don't have two hours to sort through a lot of music. They want someone to be their concierge service, which is what XM does."

Read the full USA Today interview here.

Why Don't We All Use The Many New Ways To Market Music?

For several years now we've wondered why record labels don't point more resources towards the media that does expose new music instead of fighting for the same few spots on broadcast radio.  In a Lefsetz Letter column last week Bob Lefsetz said the same:

You'd think instead of paying for play on terrestrial radio labels would be supporting satellite radio and net radio, with their wide variety of options, with their unlimited playlists. God, sign up for satellite and get five CDs free. Isn't this how "Rolling Stone" built its business?

To those outlets we'd add podcasts, magazine CD and download samplers, P2P's, Mp3 blogs and email newsletters, eCards linked to free downloads and other viral marketing plus a growing variety of music sampling and sharing services.  Get with it music marketers or get left behind!

XM/Napster Announce: Hear It, Download It

According to Digital Music News XM Satellite Radio has announced "...a new relationship with Napster, scheduled to take root in the fourth quarter of this year. As part of a new "XM + Napster" service, a new breed of XM/MP3 players will allow music fans to earmark songs heard on the satellite service for later download on Napster. Once the XM/MP3 receiver is docked, Napster will match the selected songs against its existing catalog."

"...Samsung has teamed with XM Satellite Radio to produce flash-based devices that will combine downloadable music with satellite radio content. But those devices...will only be able to store live satellite content received from a docking station for portable playback later. A fully portable device is also reportedly in the works..."

SIRIUS TO ADD 25% MORE CHANNEL CAPABILITY

(CelebrityAccess MediaWire) -- Sirius Satellite Radio has developed a new, advanced proprietary technology that will initially increase the company's total network capacity by approximately 25% within its existing digital transmission system. The technology, known in the industry as hierarchical modulation, will allow Sirius to offer additional audio channels, as well as advanced services such as data and video, without affecting the quality of its broadcasts.

To read the full article click below.