Karmazin Slams HD – Or Is He Offering A Solution
“Car companies are having their own problems; it’s wrong to ask that anything be added to the cost of what people are paying for a vehicle. The consumer ought to decide. The government shouldn’t be requiring HD Radio just because the content is not compelling enough on its own to get people to buy these radios.”
At first blush, this quote by Mel Karmazin seems like a direct slam of HD Radio. BUT….Karmazin is a self described “operator”, and he is always in search of the next deal. What Mel Karmazin has done is point out what people already know. The content on HD Radio is virtually identical to that which is offered on standard terrestrial radio stations. The theoretical benefit is better sound quality. However, is sound quality alone enough to make the difference? For the average consumer, the answer is no.
So how does HD Radio survive, or beyond that thrive. Perhaps they can work with satellite radio in some form or another. During the Sirius XM merger process, Ibiquity made it a point to not take any position. By doing this they hoped not to alienate either side. HD became the Switzerland of audio entertainment.
Instead of taking a position on the merger, HD made strong efforts to become incorporated with satellite receivers, thereby bypassing expensive negotiations with the auto manufacturers. What HD Radio was seeking may not seem fair, but it was worth a try. In the end they were successful in at least getting inclusion reviewed.
So, with all of this, where is the solution? The FCC may not even have the authority to mandate HD inclusion into satellite receivers. One possible solution is that Ibiquity team up with Sirius XM to provide a solution that can benefit everyone.
Mel Karmazin has pointed out that the content on HD is not compelling enough to have consumers charge a premium. Most HD content comes from terrestrial radio programming that is already being broadcast. If that programming is not compelling enough, then the solution is to obtain better programming. Most will agree that Sirius XM has better content that can not be found on the standard terrestrial dial.
What if Sirius XM were to offer up some compelling programming to HD in exchange for a cut of the ad revenue that HD derives from their service? HD could take a channel such as Sirius Hits One, insert commercials, and pay Sirius XM for the right to do so. This solution could be reached without FCC or government intervention. It would give Sirius XM a piece of the HD action (including a cut of lucrative “local” advertising), and it would give HD Radio a pathway into the OEM channel without having to go through costly negotiations.
Such a deal would boost the concept of HD, as well as boost the profitability potential of Sirius XM Radio by adding a new revenue stream complete with what boils down to “free promotion” over terrestrial airwaves.
Sometimes when someone is in the midst of a negotiation, or considering entering into a negotiation, they will downplay the value of the entity they are thinking about working with. This may be exactly what Mel is doing. Mel stated that he wants to get into “more devices”. More devices could also include OEM receivers that do not become self paying subscribers. If Sirius XM were to include HD chipsets, they would at least have potential of still gaining revenue from the non-subscription HD.
Clearly HD does not have what it takes to compete with satellite as yet. The question is whether or not to work with HD to create a middle tiered service. HD could be the crossover format between terrestrial radio and satellite radio, and it is in that type of roll that HD has the best chance to survive. HD needs satellite, so they should be willing ton pony up some revenue sharing to become viable.
Position – Long SIRI
I completely agree Tyler. HD needs Satellite Radio in order to survive, but SIRI could benefit greatly from HD as well.
I know a lot of people seem like they are against having the HD chips be included with SatRad but if Mel can strike the right deal with HD he could pave the way to local advertising and reach out to people who aren’t subscribed to SIRI yet. This could actually be huge for SIRI in the long run.
Screw iBiquity.
Did you miss the new bill introduced by Senator Markey to mandate its inclusion in satrad devices?
What benefit does HD bring to Satellite? If iBiquity wants to be included in Satrad, perhaps they could offer 15 billion or so to buy the company.
great idea tyler would love to see somthing like that happen
NAB represents terrestrial AM/FM Radio and its HD Radio counterpart. If a deal is to be made with the devil, then the devil should pay for all the damage he caused, should he not?
It’s all about the content. People pay for the content. Why would HD want SIRI music content with commercials. What would be the difference between that and local radio? Any computer can play music and enter commercials. I don’t see how SIRI benefits at all by putting HD chips in it’s radios. If HD wants to sell radios, they better get some content and subsidize the radios too.
SIRI should not be footing the bill for their competition…
Senator Markey is a nutcase for even considering this…
I had an interesting conversation with a Southern California client yesterday. He expressed surprise that you could drove from LA to Phoenix and listen to the same station for the whole trip. Now this guy is pretty bright, so I think this shows that satrad has a long way to go to even get people to understand what it is, let alone that it is ad free.
SEND A EMAIL TO THEM TOO…
Thank you for your email below in which you expressed concerns about naked short selling and reinstating the uptick rule. We are aware of significant concerns on the part of many individuals and entities about these issues and we appreciate your bringing this information to our attention.
The Office of Inspector General (OIG) has an ongoing audit into the SEC Division of Enforcement’s process for responding to complaints and referrals, including those pertaining to naked short selling. Please be advised, however, that the OIG has limited jurisdiction and lacks authority to reinstate the uptick rule or to directly enforce against naked short selling. Therefore, we have forwarded your email to both the SEC’s Division of Enforcement and Office of Investor Education and Assistance for their review. You may also contact those offices directly at [email protected] and [email protected].
Sincerely,
Natasha Dandridge
Legal Assistant
On behalf of the Office of Inspector General
of the U.S. Securities and Exchange Commission
THIS IS TO HD looking for a free ride in sirius radios.
………………..,/¯../
………………./…./
…………./´¯/’…’/´¯¯`•¸
………./’/…/…./……./¨¯\
……..(‘(…´…´…. ¯~/’…’)
………\……………..’…../
……….”…\………. _.•´
…………\…………..(
…………..\………….\…. ….
…………\…………..(
…………..\………….\….
terrestrial = 22 minutes of commercials
hd = 11 minutes of commercials one of which touts satellite radio. Sirius XM gets portion of ad dollars
satellite = commercial free
hd subsidizes cost of chip, and pays a portion of the oem subsidy.
5 huge after hour trades that total about 2.1 million shares of 2.7 million thusfar…who the hell is buying these…Are they ready to drive our pps down again?
“Radio: The U.K.’s Digital death notice”
“Ferrara came out of hiding this week to fallaciously proclaim that HD radio-only stations – those that you can hear only on an HD Radio receiver – are writing business and making money… Reality check: HD Radio isn’t going to bill anything – period.”
http://tinyurl.com/33mtuo
HD Radio will never bill anything.
“FCC Tackles Equipment Manufacturers for Not Including DTV Tuners in Their Devices” Written By: David Oxenford On September 23
“Congress, as part of legislation authorizing and mandating the DTV transition, has given the FCC authority to regulate DTV receivers. No specific Congressional authority covers radio receivers for their digital conversion (which, at this point, is not a mandatory conversion).”
The FCC doesn’t have the authority to mandate HD Radio into Satrad receviers – this is what Rep. Malarkey is trying to do, despite that it probably violates anti-trust laws.
SOME NEW DEFINITIONS…
New theme song for Wall Street—Shaft
CEO –Chief Embezzlement Officer.
CFO– Corporate Fraud Officer.
BULL MARKET — A random market movement causing an investor to mistake himself for a financial genius.
BEAR MARKET — A 6 to 18 month period when the kids get no allowance, the wife gets no jewelry, and the husband gets no sex.
VALUE INVESTING — The art of buying low and selling lower.
P/E RATIO — The percentage of investors wetting their pants as the market keeps crashing.
BROKER — What my broker has made me.
STANDARD & POOR — Your life in a nutshell.
STOCK ANALYST — Idiot who just downgraded your stock.
STOCK SPLIT — When your ex-wife and her lawyer split your assets equally between themselves.
FINANCIAL PLANNER — A guy whose phone has been disconnected.
MARKET CORRECTION — The day after you buy stocks.
CASH FLOW — The movement your money makes as it disappears down the toilet.
YAHOO — What you yell after selling it to some poor sucker for $240 per share.
WINDOWS — What you jump out of when you’re the sucker who bought Yahoo @ $240 per share.
INSTITUTIONAL INVESTOR — Past year investor who’s now locked up in a nuthouse.
PROFIT — An archaic word no longer in use.
HD sucks, the range is terrible, and the sound quality is not much better if at all than analog. ibquity is selling a bunch of hype that’s all. That bill from Congressman Malarkey from MA, my state will never pass and that crook gets over 33% of his donations from the telecom industry, need I say more?
HD is a lead balloon which will drag down Satellite, it doesn’t need it, would cost more for the receivers and drag down Satellite with the added cost. People will associate the terrible technological disaster that is called HD with satellite and Satrad will become associated with a loser, not a good idea. Would make more sense to add an 8 track player to the satrad receivers, at least those things performed as promised and they might get used a little more.
You can drive over most of the country and keep the came station on with Satrad, drive ten miles and kiss your HD station bye bye.
Bob Young
Analog, MA
funny how Goldman Sachs is one of the first banks on the bailout list. Wasnt Goldman an investment firm just before they raped Washington Mutual and divied it up to GS and JPM? Overnight GS and JPM became a bank thanks to Paulson. Wasnt Paulson a CEO for GS?? And yet they cant do shit for Sirius after they raped them of cashflow though the ridiculous merger process. Talk about fbe hanged.ucking corruption. These people should
Talk about corruption. These people should be hanged
Dave
Not ONLY Paulon bailing out his friends and family with huge stake in GS. His appointed person to excute the bailout is his protoge from GS. Wells Fargo controlled by Warren Buffit who jumped to help Paulson and bought billions in GS.
Where is the law of conflict of interest?
Did Paulson and his GANG declare their interest in the bail out and gave full discloure of their assets.
When Mcain wins — Keating FIVE S&L loans will be pennies in comparison to PAULSON five
No way to HD… It is horrible. Has anyone ever tried to get HD just outside of downtown Pittsburgh? You Can’t…. To many hills. All it will do is make my Sirius radios MORE expensive, and in this case More is LESS.
22 min of commercials = 11 min of commercials.
The RIGHT answer is ZERO minutes of commercials.
Did anyone see MotleyFool’s new article about SIRI today?
http://msn.fool.com/investing/.....2008-10-14
Lynn says…
You have a very good point. I think a lot of people do not realize the content, the go anywhere reception( except in a tunnel) the commercial free stations.
probably be a good idea for SiriusXM to just go on TV and tell people what SiriusXM is capable of and what the benefits are to the consumer. Any kind of ads would be nice
vaporgold
I find it so interesting nobody mentions the layoffs at all on this site.
Orbitcast gets it–it seems more people here are worried about the stock price than anything else. I have a feeling you’ll start getting tons of cancellations if the Sirius part of the organization runs roughshod over the XM part.
Why would they want Sirius Hits One? Its not that hard to broadcast hits radio- why would they need Sirius’ version?
Now if you were talking about Howard Stern, that’s one thing. Its also one thing that will never happen.
No offense, but this idea doesn’t make a lot of sense, at all, in any way, to me.
am a positive person but…
The euphoria of a record day yesterday and .08 pop yesterday is fading away. SIRI will be a horror for several more months until we get some valuable news released.
The shorts are at it again today minipulating. I feel another downturn is in the making for our shares. This stock value will eventually sink to .33-.35 before it bottoms out an the declining crisis is controlled.
Goldman Ist in line and gets more money today from government bailout…help them destroy more companies and SIRI at same time…this administration and paulson’s loyalty to goldman are a real joke.
Dave, add to your list . . .
Why was AIG saved? Counter-party risk. To who you ask? Goldman Sachs.
Corrupt Governor of NJ . . . Goldman Sachs
CNBC . . . the Goldman Sachs talking head network.
Interim CEO of Wachovia . . . Bob Steel. Yup, Goldman Sachs!
Jim Cramer . . . Goldman Sachs
Why bother? Siri already has indicated the possible addition of satrad with commercials under the subscription model.
HD is like FM with the ‘Bose’ effect. Vast majority could give a rip.
Bottomline, if you’re going to pay for something it better have one hell of a lot of content. HD doesn’t. Thus end of story.
LHUN
As for the debt, Karmazin said: “We’re engaged in discussions [our lenders]. I believe we’ll be able to refinance it, even in this market.” More after the jump.
What concerns me is that he said “believe” and not I’m “sure”
This is the big risk we have here. We know satellite radio will be the biggest thing in media in coming yeras, but will we lose the balance of our $ in a reorganization before 2010 ?
jrt..
The layoffs have been expected. Everyone knows that they were and are coming. There is no need for duplicated content.
There will probably be many Sirius channels and xm channels who’s days are numbered. A 70’s channel on sirius is no different than the 70’s channel on xm.
This isn’t about sirius and xm anymore. It’s about Sirius XM. I know, it takes some getting used to.
Sirius Roadkill – you missed one of the head conspirators – Hanky.
S.Hope.
Your list is way to funny. Loved it thanks.
My take on Hd and Spanish channels is if we can make it work on the revenue side, it’s worth looking at.
Night picture s.Hope.
Lynn makes a point that many have continually stated. Brandon has written about. And I completely agree with. A large percentage of the population have no idea what satellite radio is all about.
Me, I unwound 2/3 of my holdings the past two mornings. And truly think that Mel may file bankruptcy. I give it 50/50.
Why? He now is following the pattern that occurs right before the big bk filing. Tell people your ok. Tell everyone you can do it. Doing the layoffs that I though would have been done two months ago. Did they PLAN for this merger?????????????????????????
How can we not go back to .40? We still have the same ol b.s. I’m gonna get it done. I woulda got a better deal. I shoulda gotten this done sooner. I coulda ______________ fill in the blank.
Yoda says ” No leader is He”. Not right now hes not. Hes like a talking head. And a big head at that.
Can’t find a lot of positives sorry. Wish I had never ever went against the grain when the 4:6-1 ration went out of whack near the end. Someone new that the financing was going to be a big problem. They were right. Today I would sell out and never look back for two bucks. Hell I sold out at .53 today on a limit order and cheered for myself. Are you kidding me. I bought these shares at close to 3 bucks and I’m cheering for .53. But for once I dealt in the moment, instead of in the woulda shoulda coulda.
Thank you to Tyler and Brandon for their continuous efforts.
BYW. Does anyone miss the ability to actually place a market trade on this stock. What a clusterfuck trying to put it .51 or .48 on a limit order. This morning it was all over the place. My last two trades filled over time. I’m guessing they can be viewed much easier with the limit prices on level two, making things much more manipulated than even before. Crazy investment we picked. Who Knew??????
As Brandon stated, the layoffs were a known part of the merger. The companies announced the programming directors for music, etc. Many of those positions went to XM people. The merger will bring a shakeout of duplicatated effort, and that shakeout will come from both companies.
As for cancellations…..there are as many people who prefer XM content as there are who prefer Sirius content. Some will say one service was great and the other not, but the next guy will have an opposite opinion.
I have challenged many people many times to identify a playlist of 50 songs that I have taken from XM and Sirius listening. It is an interesting study. The vote is typically split, and this is even among “diehard” listeners. The fact is that you can not typically tell which service played which list.
Tyler, I am sorry, I have to agree with Brandon on this issue. Screw Ibiquity.
Sirius needs to hurry up and put in place their overlay technology. Then you have a free ad supported option for Satellite, but this time SIRIUS is the one getting the ad revenue and they dont have to share CRAP with iBiquity. Why give power to HD when they do not have to. HD tried to screw them, it is time for Sirius to screw HD and drive them into bankruptcy themselves.
You miss my point Brandon.
From what I am seeing, XM is being the victim of the cuts. Orbitcast is now reporting that it seems Mel is focusing more on the talk channels, the places he can sell commercials.
I expected channel consolidation. What I did not expect is them to not learn from the lessons of their competitors and truly merge things together. If Pepsi bought Coke, they wouldn’t kill the Coke product, that would be foolish. If all XM subs get is all the channels that are exactly the way Sirius developed them, down to the names and exact sameness, and Sirius doesn’t adapt anything that XM does right, you’re going to see significant cancellation. XM appears to handle music better. You’re harping on Mel stating they have 19.5 million subs. What if 2 million XM people cancel next quarter?
I’m just surprised you’re ignoring this because it does count as news, more so than speculation about teaming up with HD radio.