Sirius XM: Not Just Satellite Anymore

Detractors of Sirius XM are fond of pointing out that its biggest weakness is being satellite based, as opposed to competing music providers that are web based.

Clearly, Sirius XM has figured out that they need to play ball in that court.

TWICE: Sirius XM iPhone App Due In Q2

Sirius XM plans to offer an iPhone/iPod Touch application in the second quarter and outlined today a number of other plans to grow its business now that the headwinds of the merger and refinancing are behind it.
The upcoming iPhone application would stream Sirius XM to iPhones and iPod Touch devices and is now in “rigorous testing,” said chief financial officer David Fear during a conference call with analysts. He added, “This will permit an estimated 7 million iPhone users and iPod Touch users to access Sirius XM content if they are paid subscribers.” And if they become a new subscriber, they won’t have to purchase a new radio, he explained.

Good idea, but is it too little, too late? I guess that we'll find out.

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Sirius XM Not Out Of The Woods Yet

Good news, but not great news for Sirius XM.

Clusterstock: Sirius XM Growth Hits The Wall (SIRI)

Sirius lost $248.5 million on $644 million of Q4 sales, better than the $405 million (pro-forma) loss on $558 million of sales during Q4 '07. The Street had expected Sirius to report $616 million in Q4 sales, so it beat by about $28 million, or about 4%.

CE Pro: Sirius XM Sales Up, But Subscriber Growth Slows

Sirius XM beat expectations for its Q4 sales but still lost nearly $250 million, according to the Associated Press.The satellite radio service's sales on a pro forma basis hit $644 million, up from $577 million last year. "In the fourth quarter 2008, the company's first full quarter of combined operations, SIRIUS XM made remarkable financial progress," says Mel Karmazin, CEO of Sirius in a press release.

Despite still being sorely wounded financially, Sirius XM still has some fight left in it. If you want to use hate mail as a metric of success, whenever I've posted about Sirius XM, I get deluged by comments from transparently pro-terrestrial radio astroturfers. If Sirius XM wasn't threatening to them, the bashers wouldn't work so hard.

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Sirius Going To Find Out That There's No Santa Claus

Silicon Valley Insider's Dan Frommer wraps up the coal in Sirus' Christmas Stocking.

Silicon Valley Insider: Sirius XM: Our Christmas Will Suck (SIRI)

The satellite radio company expects to sign up 200,000 net subscribers in Q4, what's supposed to be its busiest quarter.
That's almost a third fewer than the 344,000 it signed up in Q3.
And it represents 80% slower growth over Q4 2007, when Sirius and XM combined to sign up 1.1 million net subscribers.
What's to blame? The crappy economy and terrible car sales -- where Sirius XM gets most of its new subscribers. (Meanwhile, we bet that won't stop Apple from selling another 2-3 million or so iPhones in the U.S. this quarter, all of which are capable of connecting to free Internet radio stations.)

That last part about iPhone access to Internet radio may well be the worst news of all for SIRI.

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Things Just Keep Getting Uglier For Sirius

As if hassles with it's debt load, share price, and dependency upon the depressed auto sector wasn't enough, now Sirius is having distribution woes.

TWICE: Directed Exits Satellite Radio

Directed Electronics said it will exit the satellite radio market, citing softening sales of aftermarket satellite radio products.
Directed will stop acting as Sirius’ exclusive retail distributor on Jan. 31, 2009, the company announced
late yesterday. Citing Sirius XM’s high debt of more than $1 billion, and the unfavorable credit markets, Directed said the relationship with Sirius no longer provides a favorable “risk-reward tradeoff.” It offers “a relatively small contribution [to sales] vs. the potential risk of a catastrophic situation for us if they can’t refinance,” said Jim Minarik, president and CEO of Directed’s parent, DEI Holdings, on a conference call with analysts.

For Sirius, when it rains, it pours, apparently.

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Over At GadgetTalk: Surely you can't be SIRIUS?

MarketnewsGadgetTalk: What Now SIRIUS?

Apropos of nothing, now seemed like a good time to revisit a great line:

Rumack: Can you fly this plane, and land it?

Ted Striker: Surely you can't be serious.

Rumack: I am serious... and don't call me Shirley.

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XM/Sirius Merger Still Lurching Along: Does It Even Matter Anymore?

As the proposed merger between Sirius and XM grinds its way through the wheels of government, one has to wonder if it's really worth it. 24/7 Wall St.'s permabear Douglas McIntyre thinks not.

Tearing The Guts Out Of The Sirius (SIRI) Merger With XM Satellite (XMSR)

Over the year-and-a-half that the merger has been pending, the two companies have gone from being in bad financial share to being in a dire set of circumstance. Each company has well in excess of $1 billion in debt. Neither has ever made a dime and their losses last quarter were not encouraging.
Satellite radio has lost much of its appeal for consumers. The slowing subscription growth rates at the two companies show that. HD radio and the Apple (AAPL) iPod, which can be plugged into a car sound system, have taken away much of the uniqueness of getting music, Howard Stern, and Oprah off the big bird in the sky
The merger may go through. It may be killed. Either way, satellite radio has a dim and perilous future.

I'm in favor of seeing the putative merger die, if only because a united XM/Sirius would pose a humongous hassle for AV hardware manufacturers.

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XM and Sirius shareholders give their blessings to the union

And now, a story so monumental, that TWICE felt compelled to run two different headlines!

TWICE: Sirius Shareholders Approve Merger

Sirius Satellite Radio today announced its stockholders approved the pending merger with XM Satellite Radio with more than 96 percent of the shares voting in favor of the transaction. The vote was held at a special shareholders meeting today.

TWICE: XM Shareholders OK Merger

XM Satellite Radio shareholders joined their cousins at Sirius Satellite Radio today by giving their approval of the proposed merger of the two companies.
The stockholders voted overwhelmingly in favor of the move, with in excess of 99 percent voting to OK the merger during a special shareholder meeting held this afternoon. Sirius shareholders voted earlier today, with 96 percent giving their approval.

Notwithstanding the spam comments I will get in my inbox from paid astroturfers in the employ of the National Association of Broadcasters, this is a banner day for Satellite Radio.

On the other hand, this merger is going to be a wee hassle for consumers, owing to the need to transition to new hardware, not to mention a hassle for hardware manufacturers.

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Is the XM & Sirius deal really going to go through?

Or is it all just rumor and turmoil?

TWICE: Analyst Says DoJ May O.K.Sirius/XM Merger

Cowen and Company analyst Tom Watts reports today that Thomas Barnett, assistant attorney general for the Department of Justice, (DoJ) will approve the Sirius/XM merger sent Sirius and XM stocks up four percent.
Watts also concluded in a report to investors that the DoJ might discuss the Sirius/XM merger as early as next week.
Watts said Barnett’s approval “would come despite a [DoJ] staff recommendation against the deal” and added that the pattern of the Antitrust Chief acting against his staff’s recommendations occurred, as well, in 2006 in the DoJ’s approval of Whirlpool’s acquisition of Maytag.

It will be nice when this deal is either done and put to bed, or dead and buried. Either way it's all good.

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The Blogosphere makes for odd connections

Henry Unter, a German automotive blogger who blogs at Automotive Center was so keen on the post I made the other day about Canadian Sirius Satellite Radio subscriptions that he translated it into German for his own readers.

Automotive Center: Lee die berufliche Meinung von Distad: Eine halben Millionen Kanadier haben Sirius

Mein Deutsch ist sehr schwer, in that I know just enough to place an order for drinks, say things to Die Mädchen that will get me into trouble, and basically get by on a Frietag abends, but that's about it.

Regardless, translation is the sincerest form of flattery. Danke.

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Half a million Canadians have Sirius

There are all sorts of interesting factoids about Canadian satellite radio sales in this press release.

SkyREPORT.com: Sirius Canada Tops 500K

Sirius Canada unveiled last week that it has signed up more than 500,000 paying subscribers nationwide, adding more than 200,000 since February alone.
...
Sirius Canada said its automotive partners make up nearly 60 percent of vehicle sales in Canada, and since the beginning of 2007 have built more than 100,000 vehicles with factory installed Sirius radios. (Sirius Canada’s automotive partners include Ford, Chrysler, Audi, BMW, Jaguar, Land Rover, Lexus, Mazda, MINI, Subaru, Toyota, Volkswagen and Volvo.)

I haven't taken the plunge yet, but everybody I know who has Sirius loves it, especially if their job involves a lot of driving.

Anyway, nothing earth shaking about this per se, and I have no nasty comments to make about it, but I thought that I should bring it to your attention.

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XM/Sirius Merger Getting Down To The Wire

TWICE: XM, Sirius Merger Vote Set

Washington — XM Radio and Sirius Satellite Radio will hold shareholder meetings on Nov. 13 to vote on the proposed Sirius-XM merger.
An XM spokesman said, “The shareholder meeting represents another step forward in the merger process.”Sirius and XM claim they still expect the merger, which must be approved by the Federal Communications Commission (FCC) and the Dept. of Justice (DOJ), to be approved by the fourth quarter.The FCC is charged with determining if the merger would be in the public interest and the DOJ determines if the merger would be anticompetitive.

Whether you think that this is a great idea or not, it looks like it's gonna happen.

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Sirius XM Radio sidle ever so closer to making a deal, Financial Times goes for broke on headline

FT.com: XM/SIRIUS regulatory approvals said to be in final phase; lawyers skeptical about positive implications from Whole Foods/Wild Oats approval

The two main regulatory approvals needed to clear the XM Satellite Radio Holdings and SIRIUS Satellite Radio merger are believed to be in their final phase, it is understood. It is also understood, however, that the process could still take several months.
Meanwhile, lawyers interviewed for this article are skeptical as to whether the recent green light given to Whole Foods and Wild Oats by anti-trust regulators has any positive implications for this transaction.
The Federal Communications Commission, or FCC, must approve the transfer to SIRIUS of control of XM and the subsidiaries of XM holding FCC licenses and authorizations, as well as the deemed transfer of FCC licenses and authorizations held by SIRIUS and its subsidiary to the combined company. In addition, XM and SIRIUS each filed notification and report forms with the Department of Justice (DoJ) in March.

FT writers Nadia Damouni and Bhavna Kaul appear to have been getting paid by the word, but the short form is this: the Sirius/XM merger seems to be in a patch of smooth sailing towards becoming a realized deal, but there's still more work ahead. Also, Whole Foods hasn't gotten enough good press out of their successful outmaneuvering of the FTC with regard to buying competitor Wild Oats.

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FCC chairman on-side with satellite radio's proposals

The proposed XM/Sirius merger is far from a done deal, but does seem to be edging closer to recieving FCC approval.

TWICE: FCC Chairman Pleased With Proposed Satellite Radio Pricing Plans

Federal Communications Commission (FCC) chairman Kevin Martin told reporters today he was pleased with the XM and Sirius decision to let customers choose which channels they wish to receive if the two satellite companies are allowed to merge, according to an AP report.
The comments were made at a monthly FCC press meeting where Martin reportedly said he was “pleased any time companies come forward with proposals that would give consumers more control over what they pay for.”
Martin would not say when the FCC might decide on the merger.

I read the National Association of Broadcasters' rebuttal to this proposition so you wouldn't have to. I can summarize their position thusly:

"Waaaaah!"

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XM/Sirius considering a la carte channel bundles

The three-ring circus struggle to achieve regulatory approval of a combined XM/Sirius satellite radio entity entered a new phase this week, with the satellite radio companies offering to mix up their programming to placate the FCC.

TWICE: A La Carte Packages Could Help Sirius-XM Merger
XM and Sirius said they hope the a la carte options starting at $6.99 per month, almost half the price of a current subscription, will demonstrate a merger would be in the public interest and help the merger win federal approval.

Of course, none of this has phased the opposition of the National Association of Broadcasters, who would sell their own grandmothers if they thought that it would scuttle the proposed XM/Sirius merger.

The National Association of Broadcasters issued a statement in response to the a la carte announcement, claiming, “Policymakers should not be hoodwinked by today’s announcement, since nothing is stopping either XM or Sirius from individually offering consumers a more affordable choice in limited program packages.”

Whatever you do, don't ask them what kind of choices they offer listeners...

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Congress doesn't support an XM/Sirius merger

This deal is like teeter-totter: it's looking good, it's not looking good, it's looking good, it's not looking good. Gosh, this is all so dramatic.

TWICE: Congress Voices Opposition To Sirius/XM Merger

Washington - Seventy-two members of Congress expressed opposition to the merger of Sirius and XM in a letter to the Justice Department, the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC).
The six paragraph letter stated the merger of Sirius and XM would create a monopoly that would harm consumers and in it they claimed there is “scant evidence” that a merger would produce any cost savings to subscribers.
XM, Sirius and even Wall Street analysts have asserted the merger would create a savings of $3 billion to $7 billion for the companies. Sirius CEO Mel Karmazin, in testimony before Congress, has said the savings would be passed on to consumers in the form of lower prices and increased programming.

The lesson here is not that analysts scoff at Mel Karmazin's convenient fiction that a combined entity would cost consumers less, it's that both companies need to seriously increase their political campaign contributions if they want Congress to smile on the proposed deal.

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Satellite radio monopoly no threat to anyone, study finds

TWICE: XM, Sirius Merger Will Benefit Listeners: Study

Washington — Thomas Hazlett, the former Chief Economist of the Federal Communications Commission (FCC) released a study commissioned by XM and Sirius that found a merger would benefit consumers.
The study was submitted today to the FCC, said XM and Sirius.
The study noted that the $3 billion to $7 billion that investment analysts predict will be saved by a merger, “will permit more aggressive investment in satellite systems and products and prompt competitive responses from terrestrial broadcasters and other rivals.”
The study claimed “By any measure, satellite radio is dwarfed by terrestrial radio,” noting that terrestrial radio had revenues of over $21 billion in sales in 2006 compared to $1.6 billion for satellite radio.” In market value, terrestrial radio weighs in at $82 billion compared to $9 billion for XM and Sirius combined.
The merger would also result in a wider array of popular programming to subscribers and in lower prices for the service and receivers, the study said.

One more time: we live in an era where consumers have a jillion sources of entertainment, information, and noise vying for their attention. Really, how can a unified satellite radio company be any more of a threat to another media company's livelihood than any other competitors?

It can be pretty silly to cry "Anti-trust" sometimes.

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Citizenry lobby FCC on behalf of XM/Sirius merger

Apparently the proposed merger of XM Radio and Sirius has grass roots support.

TWICE: Sirius Merger Gets Support

Washington — XM and Sirius said that many organizations have filed comments with the Federal Communications Commission (FCC) in favor of an XM and Sirius merger.
The organizations supporting the merger include the League of Rural Voters, the National Consumers League, the National Black Chamber of Commerce, the Hispanic Federation, The Latino Coalition, the League of United Latin American Citizens (LULAC), the New York State Federation of Hispanic Chambers of Commerce and Women Involved in Farm Economics (WIFE)XM and Sirius said that the organizations voiced support for satellite radio’s program diversity and the merger’s potential to strengthen or expand programs supporting diversity.

Who are all these guys?

Are these the lobby group equivalent of the Quote Whores of the Movie Critic business? Just like some critics will call any movie "...the MUST SEE film of the Year..." just to get their name in print, are there some special interest groups who will get behind any cause just to get some press?

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Sirius gets fed from the table by Morgan Stanley

TWICE: Sirius Gets $250M Morgan Stanley Loan

New York — Sirius Satellite Radio reports it has obtained a $250 million senior secured term loan commitment from Morgan Stanley Senior Funding.
The facility will mature in 5.5 years and have covenants substantially similar to those under the company's existing 9 5/8 percent Senior Notes. The proceeds will be used for general corporate purposes, Sirius said.
Morgan Stanley is acting as the sole lead arranger and has committed to provide the entire principal amount of the facility, subject to customary closing conditions. “This transaction takes advantage of favorable market conditions and significantly strengthens our balance sheet,” said David Frear, executive VP/chief financial officer of Sirius.
Sirius said in a statement that it believes that its merger with XM Satellite Radio will close by the end of 2007.

Translation: "general corporate purposes" = "pay the bills, since our subscription revenue isn't quite enough."

Remember, for regular people, getting another credit card when you're a little short is bad, but a company securing additional financing when they're a little short is good.*

I'm still skeptical about the XM/Sirius merger actually coming together, by the way.

*Until the party comes to a stop, that is.

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Karmazin not keen on chances of Sirius XM Radio merger

In the words of George Carlin, "It's always darkest before going completely black!" The CEO of Sirius Satellite Radio is starting to doubt the likelihood of Sirius and XM getting together.

TWICE: Sirius Calls Merger ‘Uphill Battle’
New York — Sirius Satellite Radio CEO Mel Karmazin told shareholders this morning that the Sirius/XM Satellite Radio merger is an “uphill battle.”
While stating that he continues to believe the merger merits approval by government regulators, Karmazin admitted that Wall Street estimates there is an “80 percent likelihood that the merger is not going to happen.”
This contrasts with a comment earlier this month by XM CEO Hugh Panero stating, “We continue to believe we will ultimately receive the necessary approval to continue with the merger.”

Given the amount of pressure from the terrestrial radio lobby, not to mention the myopic approach the regulators have towards what consititutes a "monopoly" (hint, in this day and age, no one has a monopoly on any one medium), it's not looking good for satellite radio's attempt to bolster themselves by sticking together.

It might be for the best, since as reported earlier, the merger looked like it was going to be a major pain in the ass for manufacturers of devices with compatible tuners. I'm sure many HiFi companies are breathing a sigh of relief at the prospect of not having to offer awkward upgrades.

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Proposed XM/Sirius merger not looking likely

Reported in Dealbreaker's Opening Bell

F.C.C. Chief Questioning Radio Deal (NYT_After Sirius and XM announced their intent to merge, various analysts tried handicapping the deal. Many put a 55%-60% of it being approved, and some have already lowered their odds to closer to 50%. Another round of downgrades may be in order, as apparently the chief of the FCC is pretty skeptical on whether there will be any benefits to consumers. In particular, Mel Karmazin's recent testimony to Congress has done little to win him over.

I don't feel too heartbroken about a merger not occuring, as it was going to end up being a major pain in the ass for everybody who makes satellite radio equipment. Still, we shall see what we shall see.

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