Sirius CEO: Merged satellite radio would offer ala carte

David Johnson July 23rd, 2007

So I had the privilege of lunching today with Mel Karmazin (CEO of Sirius Satellite Radio), Gary Parsons (CEO of XM Radio), and several dozen others at the National Press Club. Mel talked about the proposed merger of the two companies and how horrible life is with competition from terrestrial radio to Internet radio to the HAM operators. His big announcement was that the merged company would be offering ala carte packages to subscribers, which is a first among subscription services. He blasted back hard at the NAB, who earlier today were applauding NPR, who recently voiced their opposition to the merger. Honestly, I came away from the event thinking that terrestrial broadcasters really don’t have anything to gripe about, but not because of anything that Karmazin said outright.

Here’s the deal: pretty much all radio listening happens in the 423 million automobiles on our nation’s roadways (some research puts that at 90%), and when Mel answered my query on his plan for hyperlocal content like traffic, weather, and news, he said their plan was to not do it. That being the case, XM/Sirius is really only targeting long-distance travelers who would be driving in and out of broadcast tower ranges and aren’t listening to broadcast at all, but hard or downloaded media on their cds or jacked-in mp3 players. Of course, anyone on a plane or subway is already blanked.

Considering all this, it kind of makes sense that the total marketshare (or earshare) of satellite radio is a mere 3.4% of the national radio audience, which is 230 million weekly listeners strong. Spread that already thin audience over a couple hundred channels multiplied by 24 hours worth of programming, my dreams of growing wealthy creating retro audio theater pretty much amount to static. I’d have a greater audience potential by podcasting to the 116 million ipods.

Fun fact: Sirius has been in business for 17 years and has never once turned a profit.