Lehman On Sirius' Q1 Expectations

April 30, 2007

SIRIUS SATELLITE RADIO (SIRI: $2.99, 1:OVERWEIGHT): 1Q07 EXPECTATIONS RECAP

We expect SIRI to report 1Q07 results tomorrow, May 1st before the open. The company has scheduled a conference call for 8:00AM EST (webcast: www.sirius.com) to discuss the results.

We recap our expectations for the quarter below and in the attached Excel file.

Subscribers. 523k net adds, 957k gross adds, churn of 2.30%, subscriber ARPU of $10.24.

Acquisition Costs. SAC of $102, CPGA of $138.

Revenue, EBITDA and FCF. $210MM revenue, $120MM EBITDA loss (including option expense), $0.11 EPS loss, $183MM FCF loss.

4/30/2007 06:35:00 PM

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Slacker Gets More Press

April 30, 2007

Here at SSG we have been covering Slacker since it was first introduced. We covered the press releases, and have even conducted an interview with the company. Our take has been that Slacker is a pretty compelling product, and that it is indeed a viable new competitor in the audio entertainment landscape.

Now, Slacker is getting the attention of some of the more well known publications such as the Motley Fool.

Article Excerpt:

You probably haven't heard a lot about Slacker. The music-playing device doesn't hit the market until June, and the world assumes that Apple (Nasdaq: AAPL) is going to own the digital-music space for several more years at least. Naysayers who claim otherwise are just showing up too soon -- or is that too Zune? -- for their own good.

But the key here is that Slacker doesn't have to be an iPod killer to emerge as a truly disruptive innovation. Actually, the more I learn about Slacker, the more I am starting to believe that it will be music-subscription services like Napster (Nasdaq: NAPS) and growing broadcast technologies such as HD radio and satellite radio that need to be looking over their collective shoulder........READ MORE HERE

4/30/2007 01:11:00 PM

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Morgan Joseph On Sirius

April 30, 2007


SIRI Sirius Satellite; 1Q07 preview; stock likely bottomed, but upside limited for now - Morgan Joseph (3.04 )

Morgan Joseph notes SIRI to report 1Q07 results on May 1, before the markets open. Firm forecasts revs and EBITDA of $207.7 mln and ($86.1 mln) vs. $126.7 mln and ($421.2 mln) a year ago. They are looking for EPS of ($0.09) vs. ($0.33) last year. They believe the story here is now all about the merger and they are worried that SIRI, in particular, will be negatively affected by CEO Mel Karmazin's focus on getting the merger approved. While firm believes XMSR is doing its part to get the deal approved, SIRI's CEO has been the real public face of the deal. Firm expects the co to add 425,000 total subscribers during the quarter to reach a total of 6.45 mln total subscribers at the end of 1Q07.

4/30/2007 10:16:00 AM

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Clear Channel Gets Trendy

Clear Channel Debuts Social Networking
Radio giant Clear Channel is getting into the social-networking business. The company's online music and radio division will introduce a dozen station-branded social networks this summer.
www.radioandrecords.com, Apr 30

Seven station-branded sites online, five more due this summer Radio giant Clear Channel is getting into the social-networking business. The company's online music and radio division will introduce a dozen station-branded social networks this summer. Each social network will function essentially as a "mini-MySpace" but will be focused on the local community served by the station operating it. The initiative starts Monday (April 30), with the launch of social networks for seven CHR/top 40 stations across the country...read more: here

4/30/2007 09:50:00 AM

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HD Radio Has Failed To Win Over U.S. Carmakers

Automakers Not Jumping Into HD Radio "We're investigating HD radio and we'll probably make a decision in six months. When you add up the cost, it's a lot of money," said Michael Kane, director of technology strategy for Chrysler.
By Reuters InformationWeek April 27, 2007

Radio broadcasters, facing increased competition from iPods and satellite radio, are pushing a new digital format called HD Radio that has so far failed to win over U.S. carmakers.
Hyundai Corp., BMW AG, and Ford Motor Co.-owned, Britain-based Jaguar plan to offer HD Radio, and other carmakers are also set to announce deals.
Because of the amount of time people spend listening to the radio in their cars, striking such deals will be critical if the technology is going to take off.
But officials from General Motors Corp. and Chrysler Group said they were not rushing to commit to the devices, which would cost the struggling Big Three U.S. automakers as much as an estimated $600 million annually to install.
"We're investigating HD radio and we'll probably make a decision in six months. When you add up the cost, it's a lot of money," said Michael Kane, director of technology strategy for Chrysler, a unit of DaimlerChrysler AG.
Ford was not immediately available for comment...read more: here

4/30/2007 09:47:00 AM

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Sirius Q1 Preview From SSG

April 30, 2007

In case you missed it we are republishing our Q1 2007 earnings preview for Sirius.

Sirius will be having their Q1 conference call prior to the market opening on Tuesday. This means that investors have two trading days left before Sirius’ news hits the streets. All things considered, Sirius has had the ability for several quarters to compile some good numbers for the earnings call, and this quarter should be no different. There are a few key items to consider going into the call:

GREAT YOY EPS COMPARISON

Last year in Q1 Sirius took a big expense for the Howard Stern shares. That expense accounted for $220,000,000 of the loss last year. That means that the narrower loss that Sirius reports this year will be very good in comparison. The street is expecting a loss of 11 cents. Last years loss was 33 cents. It does not take much imagination to see headlines proclaiming the substantially narrower loss.

STRONG OEM CONTRIBUTION

Sirius is getting deeper penetration from DCX who is reported to be at 40%. With DCX selling nearly 540,000 cars in Q1, and manufacturing still happening, the DCX contribution could well approach 220,000 GROSS additions alone. Ford is also ramping up, and other partners have made strong commitments as well. Although Sirius has not provided flavor on the subscriber split between retail and OEM, I would estimate that Sirius will come in with roughly in the neighborhood of 550,000 additions.

IMPROVED EXPENSE SITUATION

Last year until very late in the year, Sirius was anticipating 6,300,000 subscribers. They came in with a bit over 6,000,000. Sirius likely had a substantial stockpile of radios that had the SAC expenses already paid in 2006 left over. These radios, virtually free of 2007 expense, would have been the crop that sold in 2007. Simply stated, this means that Sirius likely had to build far fewer radios this Q1 than they did last year. The expenses associated with radios can have a noticeable difference this year. Additionally, in Q4 2005, some expenses pushed forward into Q1 2006. We anticipate that that kind of activity will be a lot less this year.

Now, with all of that being said, here is our outlook for Q1 2007:

SUBSCRIBERS

We anticipate GROSS subscribers to arrive in at 1,030,000. We anticipate the NET number to be at somewhere between 545,000 and 565,000. If I had to throw an exat number I would place it at 557,000.

CHURN

Sirius reports a fully loaded churn number. They guided to full year churn of 2.2% to 2.3%, and I think they will come in just above that range for Q1. I am anticipating fully loaded churn of 2.4%.

REVENUE

I am anticipating revenue of $229,000,000

EPS

The street is looking for a loss of 11 cents per share. I am anticipating that Sirius will beat that estimate and come in at a loss of 10 cents per share. Some big factors in arriving at this number relate to savings discussed above.


CASH

The unknown in this situation is CAPEX spending for their satellite. As pointed out by a reader, this would not impact EPS. CAPEX is a balance sheet and cash flow metric. The big factor here relates to cash burn. if Sirius is building out the satellite faster than anticipated, there will be an impact to cash. However, the satellite buildout has been budgeted already by Sirius in their cash flow projections.

SAC/CPGA

This subject always draws some interesting comparisons to XM. What investors need to remember is that SAC and CPGA are not dictated by Generally Accepted Accounting Principals (GAAP). This means that the company can dictate what goes into these numbers, and how things are accounted for. There is nothing wrong with the way Sirius or XM count SAC and CPGA, investors just need to understand the differences. The structure of deals such as OEM deals play an important role in these metrics. That being said, I anticipate SAC to come in at $103 and CPGA (though Sirius does not report this metric) to be at $136. As Sirius rolls out newer chipsets in the OEM channel, these metrics will improve further.

CALL DEAILS

Look for the call to be pretty straight forward without a lot of bells and whistles. Sirius will likely give some mention to the video initiative, as well as some flavor on the merger. Look for the Gross subscriber number to be highlighted, and perhaps even some flavor for the first time on Gross retail additions, although I think this is unlikely. Market share may be briefly discussed, as Sirius will have passed the 45% mark on overall market share, representing over 25 basis points of improvement since Stern was announced in the fall of 2004.

TRADING ACTION

I encourage investors to watch the volume closely. With XM reporting a decent quarter, and the spike in PPS, there will be many considering their moves prior to the call. Also of note will be the options market. Investors should watch the volume and open interest of sirius and XM options as well. Options information can be obtained at www.cboe.com

4/30/2007 09:34:00 AM

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NAB Hypocracy - Loud And Clear

April 27, 2007

You can count on one thing from the NAB.........They will argue staunchly if it fits their agenda.

In the statement below, the NAB suggests that they will work to craft legislation that will ensure the survival of a fledgling audio platform. Funny, they do not do the same for satellite radio. I wonder why.


WASHINGTON, DC - Rep. Jay Inslee (D-WA) today introduced the Internet Radio Equality Act. According to a memo from Rep. Inslee's office, the bill will "reverse the recent [Copyright Royalty Board] decision and change the royalty rate-setting standard that applies to commercial Internet radio royalty arbitrations so that it is the same standard that applies to satellite radio. For public radio, the bill sets a royalty standard designed for noncommercial entities."


The following statement can be attributed to NAB Executive Vice President Dennis Wharton:


"NAB is reviewing details of Rep. Inslee's bill, which would overturn the Copyright Royalty Board's disappointing decision to dramatically raise fees for companies that stream music over the Internet. We will work with Congress to craft a solution that helps ensure the survival of a fledgling audio platform."

It would appear that the NAB wants to fight for this platform because THEY BROADCAST IN THIS MANNER. Despite the fact that they want you to believe that they are a "local business", internet radio (available nationally and internationally) is a booming business for the members of the NAB. In fact, it accounted for $200,000,000 in revenues for terrestrial radio stations in 2006!!!!

So, what we have on one hand is the NAB fighting FOR a "fledgling" internet radio industry, but wanting to fight AGAINST a "fledgling" satellite radio audio platform on the other hand. The double speak is beginning to get even deeper than I thought it would!!!! Since when does the NAB carry an interest in a "fledgling audio platform"? Ever seen the stance of the NAB on the "fledgling" Low Power FM proposals? Take a look, you will find their position very interesting.

However, as a SDARS supporter, I am glad to see that the NAB will be spending resources to protect Sirius Internet Radio and XM Internet Radio.

4/27/2007 10:40:00 AM

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Wedbush Comments on SDARS and XM Q1

April 27, 2007

XM Satellite Radio (XMSR- HOLD): Q1 Results Meet Lowered Expectations

- Q1 results in line with low expectations as retail softness continues from last year.

- XM's subscriber results should generally improve from Q1 levels throughout most of the year.

- With guidance, sometimes no change is good news.

- Minor model revisions shave a dollar off our price target.

- We still favor Sirius given its competitive strengths and our perception that the proposed merger's approval is unlikely.

4/27/2007 10:15:00 AM

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Lehman on XMSR - Long Term Story Intact

April 27, 2007

XM SATELLITE RADIO (XMSR: $11.01, 1:OVERWEIGHT): Updating Model, Long Term Story Intact

We are adjusting our 07E estimates to reflect in line 1Q07 results and incorporate data points from incremental company guidance. We expect 9.13MM YE07 subs, slightly lower than our prior estimate of 9.21MM due to fewer retail net adds. We now expect larger EBITDA losses for full year 07E, partially driven by higher CPGA. Shares could be range-bound over intermediate-term as the LT OEM fundamental story is not fully proved out yet and merger uncertainty remains. We are adjusting our 07E price target to $20 from $22 but remain constructive on the name.

Adjusting our estimates for actual 1Q07 results and additional company guidance data points.
Full-year 07 ests: 9.13MM YE subs, $113 CPGA, $1.02BN subscription revenue, $178MM EBITDA loss excluding merger costs and stock option expense, $400MM FCF loss.
2Q07 ests: 332k net adds, 958k gross adds, $65 SAC, $117 CPGA, churn 2.6%, subscriber ARPU $10.23. Revenue $279MM, EBITDA loss (w/ stock comp, merger costs) $71MM, FCF loss $70MM.

Continue to expect mix shift toward OEM but timing of OEM acceleration likely 2H07E, 2008E.
Company will likely be FCF positive in 2009E.

We are adjusting our estimates to reflect 1Q07 results, which were generally in line with our expectations, and revised company guidance on CPGA and adjusted EBITDA loss for full-year 2007. We now expect 9.13MM YE 07E subscribers, which remains in line with the company’s reiterated subscriber guidance (9.0-9.2MM at YE 07E) but is down slightly from our prior estimate of 9.21MM due to fewer retail net additions. Our revised estimates reflect 1.50MM total net additions for full-year 07E. We continue to expect shift in subscriber mix as OEM accelerates in 2007E and 2008E, with 75/25 OEM/retail mix of net additions for full-year 2007E. With 1Q07 results, the company provided additional details on full-year 07E guidance; guidance for CPGA is $111-114 and adjusted EBITDA (excluding merger costs) is $170-180MM. We are adjusting our EBITDA estimate to reflect larger loss, reflecting higher CPGA (partially due to write-down of obsolete hardware), and a higher estimate for merger-related costs. We are adjusting our YE 07E price target for XM to $20/share from $22/share. We continue to be constructive on XMSR based on the long-term OEM-driven fundamental story; stock may, however, remain range-bound in intermediate term as fundamental story is not yet fully proved out (OEM will likely accelerate in 2H07E and 2008E) and merger uncertainty remains.

Estimate Revisions.

We are adjusting our estimates to reflect 1Q07 actual results and revised company guidance. We have summarized our estimate revisions below.

Subscribers. Our YE 2007E subscriber estimate is now 9.13MM (vs. our prior estimate of 9.21MM), with 1.50MM net additions for full-year 2007E (vs. our prior estimate of 1.58MM). This is directly in line with guidance that the company reiterated, 9.0-9.2MM YE 07E subscribers. We expect 4.16MM gross additions in 2007E, down from our prior estimate of 4.21MM as our churn estimate remains unchanged at 2.6%. Our subscriber ARPU estimate is now $10.23, slightly below our prior estimate of $10.29.

SAC and CPGA. We now expect full-year 07E SAC of $66, flat YoY and vs. our prior estimate of $65. We are increasing our CPGA estimate to $113 (vs. our prior estimate of $110), due to a combination of lower gross additions and hardware write-offs.
Revenue. Our full-year 07E revenue estimates are slightly lower, driven by slightly lower subscriber ARPU. Our subscription revenue estimate ($1.02BN) remains in line with company guidance.

EBITDA. Excluding estimated merger costs ($44MM), we now expect full-year 07E EBITDA loss (excluding stock compensation) of $177MM, which is in line with company guidance of $170-180MM. We expect full-year 07E EBITDA loss (including stock compensation and merger costs) of $222MM (vs. our prior estimate of $185MM) due to higher CPGA and merger costs.

Free Cash Flow. We now expect XM to generate positive free cash flow (FCF) positive for full-year 2009E, vs. our previous expectation of 2008E, reflecting lower 08E EBITDA and deferred revenue.

4/27/2007 10:12:00 AM

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Bear Stearns Highlights on XMSR's Q1

April 27, 2007

Bob Peck issued a report on XM’s Q1 highlights:

In-Line Results Drive Relief Rally: Maintaining Outperform

• Investment Thesis. We believe extremely low expectations coupled with in-line results drove
the outperformance in the stock yesterday. Both satellite radio stocks have declined significantly since they announced the merger primarily due to uncertain merger outcome, limited visibility into the DOJ process, challenging retail environment, and OEM ramp only in 2H07/2008. As such, although we think the shares remain attractive for the long term investor with an appetite for risk, investor interest likely may remain muted until there is more visibility into the merger outcome or the YoY unit sales comps improve.

• In-Line Quarter. XM reported 1Q07 results that were in line with our expectations across every metric except gross adds (which were marginally weaker) and churn (which was better than our and street estimates).

• 2007 Guidance Reiterated; Higher CPGA and Adjusted EBITDA Losses Expected. Company reiterated sub guidance of 9-9.2 mn, subs revs of $1 bn, CFO to improve YoY in 2007, and likely positive in 2008; but increased CPGA expectation to $111-$114, and Adjusted EBITDA losses to $(170)-$(180) mn excl merger costs. Our 2007 projections: 4.2 mn gross adds, 1.47 mn net adds, 9.1 mn ending subs, self-paid churn 1.8%, SAC $68, CPGA $113, total ARPU $11.43, total revenues $1.1 bn, Adjusted EBITDA $(207) mn including $32 mn in merger costs, CF from ops $(120) mn.

• Valuation. While XM reiterated expectation of high-teens ending subs by 2010, we have a more conservative estimate of 12.9 mn at YE 2010. Given our more conservative stance with
respect to sub growth, we are tweaking our year-end 2007 target price to $15 from $17 previously, which is based on a DCF with WACC of 11%, and perpetual growth rate of 4%. We underscore that our valuation merely reflects the value of the standalone business; if the proposed merger with Sirius were approved, the potential synergies from the merger would drive valuations in the low-to-mid-$20/share vicinity

4/27/2007 10:08:00 AM

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UBS UPGRADE - More Detail

April 27, 2007

- Upgrading XMSR on improving fundamental outlook in 2H07 Following 1Q07 results, we believe there is improved visibility for an inflection in subscriber growth during 3Q07. We expect 3Q07 net adds of 319k vs. 3Q06 of 286k. Specifically, we believe churn has begun to
stabilize as evidenced by 1Q07 churn of 2.5%, up modestly from 1Q06 and down from 2.8% in 4Q06. While gross adds were weaker than expected in 1Q07, we believe the increases in OEM commitment expected in 2H07 will have a positive impact on gross adds, coupled with the improving churn would lead to increases in net adds.

- Better operational execution at SIRI supports upgrade Ahead of SIRI's 1Q07 results on May 1, we are upgrading the stock to Buy

- Following XMSR's 1Q07 results, we believe SIRI remains the business with better execution as is evidenced by our 485k net add estimate in 1Q07 vs. XMSR net adds of 285k. We believe SIRI will maintain better market share of growth through 2008. SIRI will also benefit from the
continued push toward factory installs among the OEMs in 2H07.

- Increasing targets for both XMSR and SIRI. We base our price targets on detailed DCF analyses for both companies. Our assumptions include 3% growth in perpetuity and 13% WACC for both XM and SIRI. We are increasing our XMSR target to $15 from $13.50 and our
SIRI target to $3.70 from $3.50.

Subscriber Growth Estimates

Upgrading Satellite Radio Stocks We are upgrading XM and Sirius to Buy 2 from Neutral 2. We have increased our XMSR target to $15 from $13.50 and increased our SIRI target to $3.70 from $3.50. Our revised targets represent 27% potential upside for XMSR and 25% for SIRI.

Why now?

We have been Neutral on both XM and SIRI since July 20, 2006. Our concern has been the overall fundamental malaise that has hit both companies since plug-and-play receivers were being held from shipment due to interference concerns. Our focus has been on a recovery in
subscriber growth, which we believe will be led by OEM penetration and will drive further retail growth. We believe the visibility for OEM growth has sufficiently improved that we will start to see a recovery toward the end of 3Q07 and this could translate to improved subscriber
outlook in 4Q07 and into 2008.

- XMSR may be turning the corner a bit sooner than expected. We believe XMSR 1Q07 results provided insight into the efforts management has been making to turn around the business, which is highlighted by the 1Q07 churn result. We believe a number of read-throughs include: annual growth in 3Q07 net additions, one quarter ahead of expectations; sequential growth in net adds through the rest of 2007; and the beneficial impact of OEM penetration on 2H07 and 1H08 outlook.

- SIRI's execution justifies a positive outlook. Our view on SIRI includes the strong execution at the business, which we believe is demonstrated by continued market share dominance and leverage to greater FCF than XMSR. SIRI reports 1Q07 results on May 1, before the open. Following the XMSR results, we believe SIRI's outlook could provide additional positive data points for both companies.

- First quarter 2007 results support upgrade of XMSR. As we have discussed, we believe XMSR has been moving in the right direction with regard to customer retention at both the retail and OEM level. XM has brought its customer service center onshore to the U.S.,
which should improve the overall customer experience. Additionally, XM has moved forward with its OEM partners to actively contact XMSR promotional subscribers as well as use dealer incentive and email programs to improve conversion rates for OEM promotional and free users.

XM passes 8 million subscribers. XM announced it recently passed 8 million subscribers, which implies through April, XM has added over 85k net additions, with May and June traditionally better growth months than April. We believe the growth through April provides support for
sequential growth in net adds for 2Q07, which we estimate will be 300k. We believe 2H07 will experience further strength with 3Q07 generating 319k net adds or 12% year-over-year growth from 3Q06.

EBITDA guidance excluding legal and merger expenses. XMSR provided guidance for 2007 EBITDA loss of $(170) million to $(180) million excluding merger and legal expenses, which was higher than our previous estimate of $(150) million. We believe the difference comes from higher outlook for acquisition costs (CPGA guidance of $111 to $114 vs. UBSe $108) and higher subscriber outlook. We estimate merger expenses are likely in the $25-$30 million range for 2007, including $8 million spent in 1Q07. Accordingly, our revised EBITDA estimate of $(197) million would imply roughly $(170) million excluding merger expenses. We have increased our subscriber estimate to 9.05M from 8.94M and our CPGA estimate to $112 from $108.

Remain comfortable with liquidity position of XMSR. XM ended 1Q07 with $319 million in cash and full access to its $400 million credit facilities. The cash spent to pay upfront MLB expenses ($60M) and capex for XM-5 ($90M) represents the highest cash outlay for the year. While
we do not expect sustainable FCF for XMSR until 2009, we do not project XMSR tapping the capital markets for the life of our model.

- SIRI upgrade on improving industry outlook and execution. As a read-through from XMSR 1Q07 results, we believe SIRI's results will be viewed positively when it reports on May 1. We expect SIRI to report net adds of 485k. While this growth would represent a 36% decline
year-over-year, for the sixth consecutive quarter SIRI will have greater net addition market share than XM. Based on our estimates, SIRI would have 63% market share in 1Q07. We expect SIRI to continue to lead in subscriber growth through at least 2008.

Leverage in the business model will continue to develop. We expect SAC and CPGA to continue to fall for SIRI. While acquisition costs remain higher for SIRI than XM, SIRI continues to benefit from scale and we expect further declines in acquisition costs throughout 2007. Additionally, we believe SIRI has been able to leverage its faster growth into more sustainable cash flow metrics. Due to the expected launch of SIRI-5 in 2008, we believe sustained FCF will be delayed until 2009, in-line with XMSR, but we do not believe SIRI will face any liquidity crunch in the meantime. We expect SIRI to generate greater cash flow from operations than XMSR in 2008.

Second half 2007 could indicate recovery in retail and growth in OEM. Retail remains a weak driver of growth for both companies. Given SIRI has traditionally had greater dependence on retail the continued year-over-year declines in retail gross additions have impacted SIRI's
growth and expected outlook through 2007. We believe late 3Q07 could represent an opportunity for retail growth to annualize easier comps and begin to show positive growth. Coupled with increases in OEM penetration (Mercedes recently announced plans to reach 80% factory installs), we believe SIRI can start to stabilize its growth. We continue to expect
y-y declines in net adds, but this should start to recoup by 1H08.

4/27/2007 09:56:00 AM

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UBS Upgrades Both XMSR & SIRIUS To Buy

UBS Upgrades XM Satellite To Buy From Neutral
UBS Upgrades Sirius Satellite To Buy From Neutral

(END) Dow Jones Newswires
04-27-07 0029ET
Copyright (c) 2007 Dow Jones & Company, Inc.

Details to follow...

4/27/2007 07:06:00 AM

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XMSR: S&P Maintains 3 Stars

XM Satellite Radio (XMSR)
Maintains 3 STARS (hold)
Analyst: Tuna Amobi, CPA, CFA
Before a one-time loss we estimate at 1 cent per share, the company's first quarter loss per share of 39 cents, vs. a 55-cent loss one year earlier, is in line with S&P and Street estimates. We see multi-year ramp up of installation in OEM automotive units (GM, Honda, Nissan, Toyota), vs. a dip in conversions and more retail weakness. XM affirms 9.0-9.2 million subscribers for 2007 and sees $111-$114 cost per subscriber (vs. a prior forecast of $108), and expects a $170-$180 million adjusted operating loss vs. $166 million, but positive 2008 EBITDA. With potentially formidable odds against regulatory approval of merger with Sirius (SIRI), our 12-month target price stays at $13...read more: here

4/27/2007 06:00:00 AM

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Satellite Radio TechWorld On Sirius Backseat Video

Sirius Answers Questions on Backseat Video
via SatelliteRadioTechWorld, Apr 26

Today, Sirius fired back at the WCS Coalition who earlier questioned whether Sirius had the right to provide backseat video. The very last footnote says it all:From the start, Sirius kept the FCC fully informed, including a widely attended January 22, 2004 meeting with FCC staff (at the staff’s request) to discuss its plans and the authority for 3-4 channels of backseat video ancillary to satellite radio.In another tidbit of information, Sirius states that video will take less than 1/5 of its bandwidth. So, we can calculate that video will consume 2.5 MHz of the 12.5 MHz band, or 0.625 to 0.833 MHz per channel. Since it is broadcast on 3 carriers (two satellites and one repeater), the numbers have to be divided by 3, meaning that each channel per carrier will consume 208 to 278 KHz. If we understand the technology correctly, that should translate into video streaming somewhere on the order of 625 to 833 kbps per channel. That gives us an idea of the quality that we should expect...read more: here

4/27/2007 05:00:00 AM

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SSG's Sirius Q1 Preview

April 26, 2007

4/26/2007 10:16:00 PM

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New investors - Positive News - And Shorts

April 26, 2007

With XM reporting a decent quarter, one would think that all eyes will shift to Sirius at this point. However, this in not the case. Instead all eyes will now be shifting to the trading action this afternoon, tomorrow and Monday.

XM’s quarter showed numbers that illustrate that the company is very viable, and that they can continue growth. Those that carry a negative sentiment are now rethinking their position. Those that are short are now wondering what to do. Do they cover, or do they believe that this will all settle down going into the Sirius call?

In my opinion these equities will see some very strong volume, and the recent pricing activity gives strength to the equities. It has been my opinion for quite some time that a lot of people have been sitting on the sidelines. If that group of people decide that now is the time to get into SDARS, it has potential to cause a run.

In recent months, any positive momentum was quickly stifled by those that were on the short side of the equation. With SDARS beat up substantially already, the shorts have to begin to wonder how much room is left in their position. Realistically speaking, these companies have value, so room to the downside can get squeezed quickly.

Investors should watch volume and price action closely going into the Sirius conference call.

4/26/2007 11:55:00 AM

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XM Annouces Q1 2007

April 26, 2007

XM Satellite Radio Holdings Inc. Announces First Quarter 2007 Results

First Quarter Ending Subscribers Exceed 7.9 Million; First Quarter Revenue Increased 27 Percent Year over Year to $264 Million; First Quarter Net Loss Narrowed Year over Year by 18 Percent to $122 Million; Company Recently Surpassed 8 Million Subscribers


WASHINGTON, April 26 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (Nasdaq: XMSR - News) today announced earnings for the three-month period ended March 31, 2007. Revenue for the 2007 first quarter increased 27 percent year over year to $264 million compared to $208 million in the 2006 first quarter. XM's 2007 first quarter net loss narrowed to $122 million, representing an 18 percent improvement compared to the 2006 first quarter net loss of $149 million.

XM ended the 2007 first quarter with more than 7.9 million subscribers compared to 6.5 million subscribers in the prior year period. Additionally, XM announced that it recently surpassed 8 million subscribers.

"During the quarter, we improved our retail performance, experienced strong OEM gross additions, extended our distribution agreements with Toyota and Honda, enhanced our customer service, maintained our churn rate at approximately 1.8 percent for the third consecutive quarter and strengthened key financial metrics for our business," said Hugh Panero, chief executive officer, XM Satellite Radio. "These results were driven by the operational initiatives we put in place over the last several quarters."

For the first quarter of 2007, adjusted operating loss (formerly adjusted EBITDA) improved by 45 percent to a loss of $27 million from a loss of $49 million in the prior year period. The 2007 first quarter adjusted operating loss includes $8 million in expenses related to the company's pending merger with Sirius Satellite Radio.

The primary differences between net loss and adjusted operating loss are non-operating amounts and certain operating non-cash charges. For a full reconciliation of XM's net loss to adjusted operating loss, see the attached financial schedules.

In the 2007 first quarter, XM recorded gross subscriber additions of 868 thousand and net subscriber additions of 285 thousand which compare to 1 million gross additions and 569 thousand net subscriber additions in the 2006 first quarter.

In the 2007 first quarter, XM's subscriber acquisition costs (SAC), a component of cost per gross addition (CPGA), was $65 compared to $59 in the first quarter of 2006. CPGA in the 2007 first quarter was $103 compared to $93 in the first quarter of 2006.

As of March 31, 2007, the company had $319 million in cash compared to $218 million at the end of December 31, 2006. In February 2007, we completed the XM-4 satellite sale leaseback transaction. As of March 31, 2007, the company had full availability of its $400 million credit facilities resulting in total available liquidity of $719 million.

OEM and Retail

During the first quarter of 2007, the company achieved the following in its OEM and retail channels:


* Honda and Toyota signed new ten-year deals in which XM will be their
factory-installed satellite radio provider;

* GM produced its 5 millionth XM equipped vehicle in January;

* Honda and XM launched a certified pre-owned remarketing program, which
complements the program that Acura and XM launched in the Fourth
Quarter of 2006;

* Infiniti announced that XM will be a standard factory-installed
feature in all 2008 models;

* Hyundai announced that the all-new Hyundai Veracruz midsize crossover
will join the Azera, Elantra, Santa Fe and Sonata as Hyundai vehicles
with XM as a standard factory-installed feature; and

* Despite a soft retail segment, the company's overall retail market
share showed sequential improvement based on findings from industry
NPD data.

Programming
During the 2007 first quarter, the company:

* Kicked off its third season of Major League Baseball, broadcasting
every game for every team to customers nationwide;

* Signed a long-term broadcasting and marketing agreement with the
Southeastern Conference, adding to the company's premier college
sports portfolio, which includes the ACC, Big East, Big Ten, and Pac-
10;

* Aired exclusive radio coverage of the 49th Annual Grammy Awards; and

* Renewed its contract with Bob Dylan, who will continue to host his
acclaimed radio show exclusively on XM.

Pending Merger with Sirius Satellite Radio

On February 19, 2007, XM Satellite Radio and Sirius Satellite Radio announced they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger. Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM. XM and Sirius shareholders will each own approximately 50 percent of the combined company.

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. Pending timely regulatory approval, the companies expect the transaction to be completed by the end of 2007.

The companies filed their Merger Agreement with the Securities and Exchange Commission on February 21, 2007.

Business Outlook

XM Satellite Radio reaffirmed the following financial guidance for the full-year 2007:


* Subscribers between 9.0 million and 9.2 million with higher seasonal
growth expected to occur in the latter part of the year;

* Subscription revenue in the 1 billion dollar range; and

* Improved cash flow from operations in 2007. Full-year positive cash
flow from operations in 2008.

The company has made the following refinements to its prior guidance for the full-year 2007:


* CPGA in the range of $111-$114; and

* Adjusted operating loss, excluding any merger-related or legal
settlement costs, in the range of $170 million to $180 million.

Webcast and Conference Call Information

Gary Parsons, chairman, Hugh Panero, chief executive officer and Nate Davis, president and chief operating officer, will host an earnings conference call to discuss XM Satellite Radio's 2007 first quarter results today, Thursday, April 26, 2007, at 10:00 AM Eastern Time. Prior to the call, you can access XM Radio's first quarter 2007 results on the Company's website at http://www.xmradio.com. To listen to the conference call via telephone, please call one of the following numbers approximately 10 minutes prior to the planned start of the call:


* Call-in number: (877) 265-5808
* Local call-in number: (706) 679-7931
* Conference ID#: 5409333

The conference call can also be accessed through a live webcast on the Company's website at http://www.xmradio.com/ (click on "Investor Info" link at the bottom of the page). The webcast of the call will also be archived on the Company's Web site.

If you are unable to participate in the scheduled call, a replay of the conference call will be available after 11:30 a.m. ET on Thursday, April 26, 2007 until July 26, 2007. You can access the replay of the conference call via the following numbers:


* Playback Numbers: (800) 642-1687
* Local playback number: (706) 645-9291
* Conference ID#: 5409333

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Bridge Ratings, Updated April 25th

Digital Media Growth Projections - Updated 04/25/2007
Internet Radio Growth Booming
Satellite Radio Interest Softens Further
HD Radio Growth Re-forecasted Down
New Category Gaining Momentum: Cell Phone Listeners

As part of Bridge Ratings' on-going study of audience attrition of traditional radio and subscriber and user growth of alternative digital media, we now publish quarterly insight comparing projected use and growth. Included here is an update to our findings published since March of 2005
I. Internet Radio
Internet radio continues to show the most significant growth of monthly users of those media we cover in this analysis. At the conclusion of 2006, we estimate that 24% of the U.S. population or 72 million Americans listened to on-line radio in the previous 30 days. In this newest update of the report 25% have listened in the previous 30 days. Weekly listening has also climbed with 19% of the sample listening to some form of Internet radio in the previous 7 days up to 57 million per week.
We are estimating that at the conclusion of 2007, monthly Internet radio listening will reach 31% of the U.S. population jumping to 38% by the end of 2008...read more: here

4/26/2007 06:09:00 AM

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XM Introduces 2 New Receivers

April 25, 2007

Audiovox has 2 new receivers anticipated to be available in June of 2007. The receivers are plug and play units and are the Audiovox Xpress EZ and Xpress Replay. If you want to see what these beauties look like visit Orbitcast HERE

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Morgan Stanley on SDARS and NPD

April 25, 2007

Mar NPD Results: 30% YoY Declines In-Line with forecast

· Quick Comment: NPD satellite radio point-of-sales data released today shows retail category sales declined just below 30% YoY in March, implying 35% YoY category declines for 1Q07 (see Exhibit 1). The 35% declines reported for 1Q07 compares to our forecast of retail gross additions declining 30% in 1Q07 and 9% YoY in FY07E. XMSR also gained over 300 bps of market share over SIRI in March, while experiencing less severe YoY declines in the month and 1Q07. For the quarter, XMSR retail sales declined roughly 30% YoY compared to 40% for SIRI. We note YoY category sales trends could be better than shown by NPD as NPD excludes point-of-sales data from major wholesale retailers (i.e. Wal-Mart and Costco) and direct sales where both satellite radio operators have aggressively ramped their presence. As noted in previous research, we believe FY07 category sales will strongly rely on both operators’ ability to address potential consumer confusion stemming from the pending XMSR-SIRI merger.

· Implications: The 1Q07 NPD retail results are in line with our existing 1Q07 retail gross additions forecast. We expect total net adds for XMSR and SIRI to be 270K and 550K for 1Q07. As we head into 2Q07, we will begin to exit the YoY “Howard Stern” comps and we expect YoY declines to continue to moderate. We point out that January NPD sales were down 45%, February down 33%, and March just under 30%. For the full year, we expect category retail gross additions to be down approximately 10% - which implies a modest recovery in sales in 2H07 and in particular 4Q07.

While not necessarily indicative of long-term trends, XM had its best market share month (47%) since August ‘05. XM likely benefited from the lead into the Major League Baseball season, which began in early April.

4/25/2007 06:15:00 PM

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March NPD Retail Outshines February

April 25, 2007

As we reported here, the NPD Data is out.

Ever since the merger was announced, there has been a worry that retail would suffer due to uncertainty.

Well, according to the NPD data, those worries seem to have been overdone. In fact, NPD sales in March were STRONGER than February, which is quite telling because the merger was not announced until February 19th.

In a time period where there seems to be a lot of negative attention surrounding SDARS, the retail news is a breath of fresh air. Consumers, who many feared would remain on the sidelines, actually increased their SDARS purchases over February.

From an investors perspective, stability at retail in combination with increased OEM penetration could be a spark for the sector. Now more than ever, the conference calls for Q1 2007 become a major event for the sector.

News surrounding the retail numbers seemed to be the driver for some share price movement this afternoon. As this information becomes more widely available, it will be interesting to see the reaction of the street.

Stay tuned.

4/25/2007 03:05:00 PM

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March 2007 NPD Data Released

April 25, 2007

March 2007 Retail sales, as tracked by NPD are in. (CLICK CHART TO ENLARGE)

MARKET SHARE

SIRIUS – 53%

XMSR – 44%

This represents 19 consecutive months that Sirius has maintained a lead at NPD retail. The market share for XM improved 3 points over the data from February.

YEAR OVER YEAR

SIRIUS YOY for March is down 33%

XM YOY for March is down 22%

SEQUENTIAL MONTH OVER MONTH

SIRIUS – Down 4% from last month

XM – Up 10% from last month

March was weaker than February in sales in 2006. This was the case for both Sirius as well as XM. As a sector, this data would seem to indicate a stable retail with XM showing some upside happening. While retail numbers are weaker than last year, both Sirius and XM seem to be offsetting the drop in retail with OEM installs.

Initially there was some worry about how the merger announcement would impact retail. Given the data, it appears that consumers are not holding back and waiting, and that the marketing campaigns of XM and Sirius have been effective in maintaining retail subscriber levels. Overall, satellite radio sales were HIGHER in march than in February....something that was not the case in 2006.

With retail seeming to be stable, one worry for investors in this sector seems to now have an answer.

CORRECTED - Share is 53% SIRI and 47% XM (reported 54/48 earlier)
YTD 55% SIRI and 45% XM (reported 54/46 earlier)

4/25/2007 02:43:00 PM

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Options On XM Geeting Attention

April 25, 2007

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Deutsche Bank On SDARS

April 25, 2007

Deutsche Bank - Equity Research


Trimming TPs on lower 2008 ests, but keeping Buys and merger ests

We continue to see the prospect of a merger as a fairly good proposition, and believe that pro forma synergies of close to $400m per year are reasonable. We maintain our 1Q net sub addition estimate of 214k for XMSR, while fine-tuning our SIRI 1Q estimate to 400k from 420k. Retail category trends down 30-40% YTD make us more cautious on our 2008 retail category growth estimate, which we lower to 3% from 8%. We rate both SIRI and XMSR Buys as plays on economical growth in satellite radio, in particular in U.S.
vehicles.

Retail is weak, but in line with our expectations

We believe the satellite radio retail category is tracking down roughly 35% YTD. Coming out of 4Q reporting, we only expected 214k net subscriber additions for XM (down 62% YoY), and actually believe the company should beat this number. While Sirius is more dependent on retail for growth, we believe that strong growth in installations at Ford is largely making up for slack at retail.

Still see merger deal as possible proposition, with synergies of about $4.6bn

In our discussions, arbitrageurs and investors continue to view the antitrust analysis for the merger as complicated, and we agree (see the prior, extensive discussion in our noted dated January 31, 2007 titled "After further review ... still not counting on a merger.") We hear chances of approval in our conversations ranging from 25%- 75%, which frankly seem above the probability implied by current prices. We are fairly comfortable with our synergy estimate, which includes some estimated reductions in programming costs, although we assume no reductions in music royalties or marquee programming rights deals.

Fine-tuning TPs: to $18 from $22 for XMSR, and to $4.75 from $5.25 for SIRI

While our 2007 operating estimates are essentially unchanged, we are lowering our 2008 estimates to reflect 1) essentially no retail market growth in 2008, partially offset by 2) higher installation rate assumptions for the some of the key OEM partners of both companies. Absent a merger, we believe that the retail market in 2008 will benefit primarily from the indirect impact of more OEM subscribers, who may decide to subscribe to additional units once they have used the product. This will have to offset the drags from increasing penetration of the core customer base and increasing competition from other audio music devices. Our XMSR DCF assumes 14.5m XMSR subs by 2010, 30.1m by 2020, a 4% TVG and 14% WACC (resulting in c.$13 per share standalone value) and merger analysis assuming $4.6bn in synergies and a 50% probability of deal completion with few material conditions. Our SIRI target price is based on a DCF assuming 14.1m Sirius subs by 2010, 28.1m by 2020, a 4% TVG and 14% WACC (resulting in c.$4.25 per share standalone value) and merger analysis assuming $4.6bn in synergies and 50% probability of deal completion with few material conditions. Risks to both ratings include changing market for technology-driven businesses, subscriber growth volatility, competing
technologies, rising costs, liquidity, and adverse legal developments (including failure to gain merger approval).

4/25/2007 12:54:00 PM

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Short Interest In SDARS

April 25, 2007

Seems a popular trade these days is to short SDARS. Those that took this path have nothing to complain about at this point. They have made a nice return on their investment decision. The question at this point is how long the short interest will remain a player in SDARS.

..................APRIL 15................MARCH 15.................CHANGE

SIRIUS..120,435,858.............123,631,119...............-3,195,261

XM...........30,854,117...............31,202,313..................-348,196

There has been a very slight decline in short interest, but clearly the shorts have not vacated that position en mass. With earnings coming up tomorrow for XM and next Tuesday for Sirius, it will be interesting to see what the play is.

Perhaps more interesting than the short position is the number of people sitting on the sidelines. These investors are simply waiting and observing at this point. If selling stops and capitulation happens, these equities could be very interesting to watch. The conference calls could give an indication that each group is looking for. Average calls likely means the status quo....drifting equities. Positive calls could bring new money into these equities. Negative calls give the shorts all the ammunition they need. As long as sentiment in this sector remains at the current levels, there is no reason for any particular group to change strategy, and right now, uncertainty rules the day.

XM will set the stage tomorrow. Watch street reaction closely.

4/25/2007 11:32:00 AM

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XM Q1 Preview

We here at SSG are not analysts, nor do we profess to be analysts. We do however review a lot of documentation and try to interpret what we see in the reports to arrive at our own estimation.

The XM Q1 2007 conference call will be happening tomorrow. There are a few items that we see that have potential to impact the EPS. While none of the make a huge impact, they should be looked or at least known by investors interested in this sector.

The first item relates to the merger. XM is the company that is being acquired. Therefore any costs related to the merger would be expensed in the quarter in which the activity occurred. This differs from Sirius, the acquiring company who’s costs are capitalized. Thus, these expenses for XM will show up in total as they are expended.

The next item that needs to be addressed is the method of counting OEM subscribers for non GM and Honda cars. As you may be aware, installs in Toyota, Nissan, and Hyundai are not counted as subscribers during the trial period. These 3 auto makers sold roughly 1,000,000 cars in Q1. If we were to assume a 10% install rate, that would mean that there are 100,000 cars receiving XM that are not yet counted as subscribers. The COSTS of these installs would be booked in Q1, but because these installs are not counted as subscribers, the GROSS subscriber number used to calculate SAC and CPGA do not include them. This is important because investors need to be aware of how this impacts these numbers.

By example, if each of these installs cost $100, then there would be $10,000,000 of expense. How does this impact the metric????? If the gross number of subscribers comes in at 950,000 and we assume a $100 cost to each sub, then the CPGA would be $95,000,000. However, if we add in the investment into the Toyota, Nissan, and Hyundai line of $10,000,000 we will have expenses $105,000,000, and instead of the CPGA being $100, it would rise to a bit above $110. There is nothing wrong with what XM is doing at all. It just needs to be understood by investors that there is an investment into future subscribers that is skewing the CPGA at this point. In time, this situation will balance out, but the learning curve has to happen at some point. This is why we always suggest going far deeper than simply the reported number. At this point the tradional XM definition of CPGA and SAC has changed and investors need to consider this as they look at the numbers.

With that being said, here is what I am expecting in the Q1 call from XM:

SUBSCRIBERS

I am expecting GROSS subscriber additions to be in the area of 930,000. In my opinion, 580,000 will come from the OEM channel and 350,000 will come from the retail channel.

On a NET basis, I would anticipate deactivations of 660,000, bringing the NET number to 270,000. A potential upside to this number can be arrived at by a stronger performance in March at retail. If that happened, a NET number of 290,000 could be reasonable. Based on that I would throw my estimate in at 285,000 for NET Subscribers.

CHURN

The popular number for XM’s reported churn number seems to be between 1.9% and 2.1%. I feel this is reasonable. Investors need to remember that the reported churn of XM does not include all deactivations. Subscribers coming off of a promotional period that decide against keeping the service are not calculated in the churn metric that XM reports. My estimation for fully loaded churn is at 3.0% (slightly higher than last year). I bumped up the number slightly because the increased penetration into the OEM sector and installations into car models that attract consumers that may be less likely to keep satellite radio.

EPS

It would appear that the street is looking for a loss of 39 or 40 cents per share, with the popular “Whisper numbers” having a the loss at 45 cents. However, there are many analysts that have not done revisions since the merger announcement. What is an investor to believe? Your guess is as good as mine. XM has demonstrated cost controls of late, and has been very aggressive on that front. I would tend to lean to them beating the street by a slight margin. Perhaps 38 cents per share.

REVENUE

My estimate - $268,000,000

SAC/CPGA

My estimate $68 / $109

In the end, the losses will narrow, and the overall tenor of the call should be well received. There has actually been quite a bit of positive news from XM in the quarter, but sentiment seems overly focused on negatives. I would hope to see some flavor on how the non GAAP metrics are calculated, but that may not happen this quarter. At this point investors need something they can wrap their hands around. Please remember that we are not financial advisors, and the information in this piece is only my opinion. I encourage investors to look at as much information as possible.

4/25/2007 11:17:00 AM

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XM Expands Weather Service

XM WX Satellite Weather service expands
Apr 24, via www.orbitcast.com

XM Satellite Radio has announced that it will enhance its popular XM WX Weather package (most people just call it XM Weather), adding more features at no additional charge. "We're excited to announce the expansion of coverage to Canada and Puerto Rico," said XM spokesman Roderick MacKenzie at the Sun 'n Fun Fly-In in Lakeland, Fla.
XM WX Weather will include Canadian weather products such as Weather Warnings, Outlooks, METARs, SIGMETs, and winds aloft. And who doesn't need METARs, SIGMETs and winds aloft? I know I sure can't live without 'em.XM also said it will offer subscribers an "End of Season" package that allows them to put their payments on hold during the off-season when they don't need the service. It's not being thrifty, it's called common sense....read more: here

4/25/2007 06:15:00 AM

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Seeking Alpha: Satellite Radio Has No Match

Merger Speculation Hurting Sirius Stock, Long Term Outlook Still Good
Posted on Apr 25th, 2007 with stocks: SIRI

Investor Trip submits: Analyst downgrades sent Sirius Satellite Radio (SIRI) shares into a downward spiral since April 20th, 2007. Both USB and Stanford analysts downgraded SIRI shares from “buy” to “neutral”, and Wall street took quick notice. The SIRI-XM Satellite Radio (XMSR) Merger speculation causes SIRI shares to degrade in value as time passes. Investors become impatient and dump off their shares, causing a sell-off when the merger details have changed very little.
I’m Down 18% in SIRI stake
I opened half my long position in Sirius Satellite Radio Inc. at $3.20 when Sirius stock appeared to have bottomed. I made a mistake in judgement because I didn’t account for speculative merger talks in my preliminary analysis. Now, I’m down 18% on this stock, and may have to sell off my position if it reaches my 25% stop-loss limit.
Even when your analysis looks 100% correct, short term movements can disrupt your objective thinking. However, a 25% stop-loss limit helps to automate decisions and ease the pain...read more: here

4/25/2007 06:09:00 AM

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National Black Chamber Of Commerece Endorses SIRI+XM Merger

Tuesday, April 24, 2007, via SatelliteRadioTechWorld

National Black Chamber of Commerce Endorses Merger
The National Black Chamber of Commerce, representing 95,000 black owned businesses, came out in support of the merger between XM and Sirius, stating that satellite radio has been critical to the programming needs of African Americans. We didn't realize this, but they state that the "medium offers dozens of channels that are targeted to the programming needs of African American entrepreneurs, entertainers, and consumers." That's the great promise of satellite radio to offer a wide range of programming to meet the needs of a varied audience...read more: here

4/25/2007 06:05:00 AM

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The Original Italian Pie Gets Sirius

April 24, 2007

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Onkyo Gets Sirius And XM And HD And AM And FM

4/24/2007 09:32:00 PM

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Patron Saints of Payola - The NAB - Try To Shift Focus

April 24, 2007

The NAB, Patron Saint's of Payola, want to fight the merger on any front possible.....even if it has nothing to do with the merger.

NAB issued the following bulletin today:

XM's "rogue" antennas raise questions about Sirius merger In an FCC filing, XM Satellite Radio admitted that as much as 42% of its network is served by antennas in violation of FCC rules, either because they are in unapproved locations or their signals are too strong. News of the violations irked U.S. Rep. Edward Markey, D-Mass., who chairs the House Telecommunications and Internet Subcommittee. Markey issued a public statement saying, "What is the expectation [XM Radio] will follow through or fulfill any public interest conditions?"

So, now the NAB seems to have Congressman Markey on their side. If you want to let Congressmen Markey know how you feel about the merger, please see the contact information HERE . Please remember to be respectful and courtious.....take a higher road than the NAB.

4/24/2007 01:06:00 PM

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Wedbush On XM

William Kidd, of Wedbush, published the following XM preview comments:

HOLD rating and $15 target:

We are expecting XM’s Q1 results to be in line with relatively low expectations; consequently, we do not expect the results to rally much investor interest. Retail gross additions will likely be the story this quarter. We are expecting retail demand (e.g., gross additions) to be weak, though XM may have gained a couple points of market share back from Sirius. Improving OEM sales should help offset some of the weakness. For the quarter, we are making a minor adjustment to our retail gross adds estimate, lowering it to 328k from 333k. The net result is that we are still expecting a 36% yoy decline in retail gross additions, which seems to be supported by recent NPD data. By mid-year, we expect OEM sales to make an even greater contribution, which should help lessen the sting from soft retail sales. Having said that, OEM demand is likely still the positive force in Q1, but not of a sufficient magnitude to offset the retail woes. The challenge with the OEM side is that we have less visibility, especially compared to retail, making the potential positives in Q1 more speculative than the negatives.

• We are forecasting Q1 net additions of 294k, a touch lower than our original estimate of 303k. We believe the consensus to be in the high 200’s. We do not view the difference as material. Bear in mind, XM will likely continue to report dramatically lower net additions figurers compared to Sirius because of its larger replacement churn burden. We think this cosmetic difference will continue to be a marketing challenge for XM management.

• We are not expecting subscriber guidance adjustments to resurrect the quarter. We believe XM is on its way to reaching its 2007 subscriber guidance of 9.0-9.2 million subscribers, up from 7.63 at year-end 2006. Although we’re not expecting any positive guidance changes, we believe it is not inconceivable that XM could tighten/drop the high-end of its guidance range, though we are not counting on that. We are at 9 million year-end subscribers for 2007. In terms of other key metrics: we are at $975 million for revenue, a bit more conservative than the company’s $1 billion guidance, and we are at $117 in CPGA relative to the company’s flat-to-higher CPGA guidance (from 2006’s $105).

• Although our $15 price target remains unchanged due to rounding, we note that minor changes to our model have resulted in a decrease of $162 million ($0.48 per share) in our target valuation. FYE DEC 2006A 2007E 2008E

4/24/2007 12:41:00 PM

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Wedbush On Sirius

April 24, 2007

William Kidd of Wedbush published the following 1Q preview comments for SIRIUS:

BUY rating and $5 target:

• We are expecting retail demand to be weak for Q1, not only due to the prevailing retail downtrend but also because XM may have gained a couple points of market share back from Sirius. We believe that XM’s higher guided SAC spending for 2007 reflects the company’s active attempt to regain some market share through additional spending. In addition to such competitive factors, Howard Stern’s arrival in 1Q06 makes yoy comparisons difficult from the get go for Sirius. And unfortunately for Sirius, we believe NASCAR recent addition was not significant enough to making a meaningful impact. Even though improving OEM sales should help offset some of the weakness, we are concerned that demand could come in somewhat less than expected. Accordingly, we are lowering our Q1 gross additions (which include OEM) to 876k from 912k. The net result is that we are expecting a 35% yoy decline in retail gross additions, which also seems consistent with NPD data.

• Trimming Q1 and Q2 net additions. Because of XM’s market share gains and a smaller than expected NASCAR bump, we are now forecasting Q1 net additions of 496k, slightly lower than our original estimate of 532k. We think our revised estimate is in line with the consensus. Interestingly, we had some concern that some consumers would be confused by the merger and possibly reluctant to purchase satellite radio for the time being, but channel checks indicated that consumer confusion does not seem to be a serious issue. We also felt compelled to address our Q2 estimates for Sirius on the same rationale. For Q2, we lowered our net additions to 427k compared from 470k. The net result is that our 2007 net adds estimate now stands at 2.1 million down from 2.2 million. Due to these changes, our Sirius valuation declined by $449 million ($0.25 per share). However, because of rounding, our price target remains unchanged at $5.

• We are not expecting any changes to guidance or an EPS surprise. We believe Sirius is on its way to reaching its 2007 subscriber guidance of >8 million subscribers, up from 6.02 million at year-end 2006. We are at 8 million year-end subscribers for 2007. In terms of other key metrics: we are at $987 million for revenue, a bit more conservative than the company’s $1 billion guidance, and we are at $103 in SAC relative to the company’s SAC guidance of $95. Our Q1 EPS estimate of ($0.12) is a penny below the ($0.11) consensus.

• The merger approval process and a difficult first-half 2007 continue to overshadow the company’s valuation and a stronger second-half outlook. For now, we think concerns of a soft Q1 coupled with a bleak07E 2008E EPS($) ACTUAL CURRENT PREVIOUS CURRENT PREVIOUS merger outlook have put considerable pressure on the company’s shares. If there were a positive this quarter, it would be that much of the company’s negative news flow may be behind it. It would not be surprising to see another revision of negative revisions to long-term estimates in the aftermath of Q1 results. If capitulation does occur, we think it might finally be time to start for more investors to more seriously consider accumulating satellite radio equities, as the merger overhang and soft subscriber results probably won’t last very long.

• The merger decision, which we expect in the August/September timeframe, remains the largest milestone still ahead of the company. Either way, we see that date as a potential catalyst. If regulators deny the merger, which we think is likely, we believe investors would be willing to own Sirius, since they would no longer have to be concerned with how the merger process could drag on. Conversely, although we do not think merger approval is likely, we would imagine that the company’s outlook, and thus its share price, would be considerably brighter with merger synergies included.

• Risks to attainment of our share price target include shortfalls in subscriber growth; increased competition whether from XM; AM/FM radio, HD Radio, or streaming-media services; new/increased government regulation; a prolonged and/or failed merger attempt; an inability to renew key content and OEM contracts; satellite anomalies; and an unfavorable outcome in the ongoing arbitration process with record labels over royalty rates.

4/24/2007 12:35:00 PM

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Stanford On XM - More Detail

April 24, 2007

XM 1Q additions 250,000, rated HOLD $10 target

XMSR: Soft Q1 retail subscriber additions.

· XM will release first quarter 2007 results Thursday morning. We estimate XM may add 250,000 new net subscribers as retail additions remain soft. We are lowering our target from $18 to $10 to reflect the soft satellite radio subscriber growth.

· Management will host a conference call at 10am Thursday, April 26th. The dial-in number is 877-265-5808. We suspect “Street” estimates are calling for 289,000 net additions in the first quarter. Our estimated 250,000 net additions bring total subscribers to 7.9 million, up 21% year over year.

· Despite modest subscriber growth, XM could show decent financial performance. Revenue could be $248 million, up 19%, leading to an adjusted ebitda loss $4.5 million. EPS loss may be $0.34, an improvement from a $0.60 loss a year ago.

· XM struggled with weak retail sales in the face of increased competition. 2006 demonstrated Sirius’ market share advantage via retail, which we believe Sirius has maintained.

· XM and Sirius have proposed a merger of equals. XM holders will receive 4.6 shares of Sirius stock for each XM share they hold. While a satellite radio merger could uncover substantial cost savings, it may take six months to hear from regulators and well into next year to start unlocking merger synergies.

· The merger faces significant regulatory scrutiny from the Federal Communications Commission and the Department of Justice. Stanford policy analyst Paul Gallant believes there is a 60% chance the DOJ will sue to block the merger. The transaction is slated to close by yearend.

· For 2007, we project 1.2 million net subscriber additions (versus the “Street” at 1.5 million) bringing the total to 8.8 million, up 16%. Our 2007 revenue estimate is $1,038 million, up 11%, leading to adjusted ebitda loss of $3 million and an EPS loss of $1.32.

· XM’s stock currently implies a valuation of $530 for each 2007E subscriber and 5x 2007E revenue. By comparison, Sirius’ valuation implies $640 per subscriber and 5x 2007E revenue. But, Sirius is growing subscribers and revenue substantially faster. Our valuation is based on the present value of future subscriber growth and free cash flow potential. Our target price is $10 per share.

· We rate XM Satellite Radio a Hold.

4/24/2007 12:33:00 PM

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Stanford On SIRI - More Detail

April 24, 2007

Fred Moran of Stanford downgraded SIRUS today to HOLD with a $3 target, 1Q sub additions 420,000:

Sirius Satellite Radio Inc. (SIRI-Hold, $2.80 Target $3.00)

SIRI: Soft growth, no catalyst.

· Sirius will report first quarter 2007 results on Tuesday morning, May 1st. We estimate Sirius may add 420,000 net additions during the first quarter. We are lowering our rating to Hold and our target from $5 to $3 to reflect the soft satellite radio subscriber growth.

· Management will host an 8:00am ET conference call on Tuesday, May 1st. The dial-in number is 800-819-9193.

· Sirius could end the first quarter with 6.4 million subscribers, up 58% year over year. Sirius should continue to lead the satellite radio industry in subscriber growth, but Sirius’ 2007 subscriber growth could drop to 34% year over year.

· We estimate first quarter revenue of $215 million, up 69%. Cost per gross add could rise to $121 causing a first quarter oibda loss of $47 million and an EPS loss of $0.09.

· XM and Sirius have proposed a merger of equals. XM holders will receive 4.6 shares of Sirius stock for each XM share they hold. While a satellite radio merger could uncover substantial cost savings, it may take six months to hear from regulators and well into next year to start unlocking merger synergies.

· The merger faces significant regulatory scrutiny from the Federal Communications Commission and the Department of Justice. Stanford policy analyst Paul Gallant believes there is a 60% chance the DOJ will sue to block the merger. The transaction is slated to close by yearend.

· Our 2007 estimates forecast $959 million of revenue and oibda loss of $178 million. EPS may be a loss of $0.37. For 2007, we estimate that Sirius could add 2.1 million subscribers, bringing its total to 8.1 million, up 34%.

· Our new $3 price target reflects more moderate near-term growth in satellite radio. Sirius trades at 5x 2007 estimated revenue and $640 per our 2007 subscriber estimate of 8.1 million. By comparison, XM’s valuation implies $530 per subscriber and 5x 2007E revenue. Our valuation is based on the present value of future subscriber growth and free cash flow potential.

· We rate Sirius Satellite Radio a Hold.

4/24/2007 12:32:00 PM

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Stanford Downgrades XM

April 24, 2007

Stanford has downgraded XM, loweing the target price from $18 to $10.

More details to follow

4/24/2007 11:30:00 AM

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Stanford Downgrades Sirius

April 24, 2007

In a report issued today, Stanford downgraded Sirius from BUY to HOLD.

More details to follow

EDIT - we incorrectly labeled this as Sanford. It should have bee Stanford

4/24/2007 09:45:00 AM

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Mercedes Gets More Sirius

April 24, 2007

Mercedes-Benz to Offer SIRIUS Satellite Radio in More Than 80 Percent of Its Vehicles

4/24/2007 09:17:00 AM

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Amazon To Sell Unprotected Music

Amazon To Sell Unprotected Songs
Robert Andrews 04.23.07, 12:58 PM ET , Forbes

Sources in the London Times say Amazon has approached all the major labels "in the past fortnight" and stated its desire to launch an online music store by May. The Times said the store would offer "unprotected MP3s."
Billboard last week reported on Amazon's moves to enter the emergent space that will already be occupied by Apple and EMI's new DRM-free repertoire, also due in May. The Times joins the dots and suggests EMI tunes would logically be among Amazon's first offerings.
But the Times pressed undo on one of Billboard's assertions: "Speculation that Vivendi’s Universal Music was already signed up to test classical MP3 downloads is understood to be wide off the mark."
It adds: "Amazon's efforts have been held back by various problems. It originally wanted to launch its own music player to rival the iPod in tandem with the store and held discussions with manufacturers, but these failed to develop successfully."...read more: here

4/24/2007 06:37:00 AM

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Howard Stern Takes Peep Show On The Road

HOWARD TO HORN IN ON TIMES SQ.
By DON KAPLAN, April 23, 2007, New York Post

Howard Stern is bringing smut back to Times Square, at least for a day.
The satellite-radio shock jock converted an old milk truck to accommodate video booths playing porno-themed programming.
On Wednesday, Stern plans to have his mobile peep show parked on 42nd Street at 11 a.m. in front of Madame Tussaud's wax museum - 180 feet from the New Amsterdam Theater, where the Disney musical "Mary Poppins" is being performed. The stunt is aimed at promoting a free Internet preview this week of Stern's pay-cable service, which provides uncensored material from his show.
Stern regular Doug Goodstein says that the booths won't feature any hardcore pornography, but naughty bits filmed during Stern's show. Visitors will have to be at least 18 years old...read more: here

4/24/2007 06:22:00 AM

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Competition Alert: Best Buy To Stock HD Radio

Best Buy Chain Dials Into Selling High-Def Radios
Monday April 23, 7:00 pm ET Patrick Seitz. Investor's Business Daily

Adoption of HD Radio, the digital upgrade to today's analog AM-FM broadcasts, could get a big lift from Best Buy's decision to stock HD Radio receivers in all of its stores nationwide.
Best Buy (NYSE:BBY - News), the No. 1 consumer electronics retailer in the U.S., announced Monday that it's selling HD Radio receivers in all its 832 stores nationally. Best Buy is the first national retailer to make HD Radio technology available to customers across the country. Other retailers, such as Wal-Mart (NYSE:WMT - News), Circuit City (NYSE:CC - News) and RadioShack (NYSE:RSH - News), are starting to roll out HD Radio products as well...read more: here

4/24/2007 06:18:00 AM

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Sirius Annual Meeting Set

April 23, 2007

4/23/2007 09:48:00 PM

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Forbes - Do they Understand The Merger?

April 23, 2007

4/23/2007 03:18:00 PM

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NFL Draft Gets Sirius

April 23, 2007

Sirius Satellite Radio to Provide Comprehensive Live Coverage of the 2007 NFL Draft

Labels: nfl, nfl draft, sirius

4/23/2007 10:28:00 AM

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BOA's Jacoby Weighs In

April 23, 2007

Jonathan Jacoby published a 1Q Preview note lowering price targets, highlights below:

Satellite Radio 1Q07 Preview

Key Inputs Point to Lower Fair Value for Both XMSR and SIRI

􀁘 Despite the recent sharp decline in share prices, we maintain our neutral ratings on XMSR and SIRI – standalone values and merger synergy values likely are lower than previously estimated. Given the proposed merger, the fair value of XMSR and SIRI consists of fair value as a standalone entity plus the expected value of merger synergies. In our view, BOTH components are worth less than we had previously estimated.

1) Lowering our stand-alone estimates due to lower longer-term conversion rate assumptions. New standalone value estimates are $2.25 (from $2.50) for SIRI and $10.50 (from $13.50) for XMSR. We have scrubbed our valuation models for both companies. The principal adjustment was to reduce our longer-term OEM conversion rate estimates for XM to make them more consistent with our longer- term assumptions for Sirius (i.e., 40-45%). Our previous model assumed that conversion rates bottomed at 50% in 2H07. The adjustment to OEM churn shaves ~500K subscribers off of our 2010 year-end estimate.

2) Lowering our merger synergy assumption to $3.6B from $5B – sports rights fees could increase initially under the base scenario. Our prior analysis assumed that combined programming and content expenses would be reduced by 15% in ’08 and by 25% in ’10 and thereafter. However, in order to be able to offer baseball or football to subscribers of both satellite networks, the merged entity might need to increase the current payments and/or extend the agreements. Our model now assumes that there are no net programming cost savings as lower costs for certain programming (e.g., music and talk channels) could be offset by higher sports rights fees.

􀁘 The current stock prices seem to suggest that the probability of regulatory approval of the merger is roughly 35-40% - but our FCC contacts believe that the percentage is trending lower. Assuming that our new fair value estimates for XMSR and SIRI with or without a merger are roughly correct, we estimate that the market implied probability of obtaining regulatory approval for the merger from the DOJ and FCC is between 25% and 40%.

􀁘 On a positive note, we see little downside risk to our 1Q07 (and 2007) subscriber estimates. In fact, we believe that XM should beat our net add estimate of 242K (consensus is 334K – we believed that 290K is reasonable). We expect Sirius to meet or beat our net add estimate of 461K (consensus is for net additions of 497K). XM and Sirius will report 1Q07 results on April 26th and May 1st, respectively.

􀁘 Our new price targets are $2.75 for SIRI and $12.50 for XMSR. Given a smaller synergy value estimate and lower standalone value estimate for each company, we estimate that SIRI would be worth ~$3.50 and that XMSR would be worth ~$15.50 if the merger is approved. Our new price targets are $2.75 for SIRI (from $3.50) and $12.50 for XMSR (from $17) – our new targets assume a 40% probability of the proposed merger receiving the necessary regulatory approvals.

􀁘 Sector View: Audience erosion will continue to cap top-line growth over the next decade, whether radio "goes Google" or not

Labels: bank of america, jacoby, merger, q1 2007, sirius, xm

4/23/2007 10:04:00 AM

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Berstein's Craig Moffett On XM and Sirius

April 23, 2007

Craig Moffett of Sanford Bernstein Published a note this morning, highlights below:

XMSR and SIRI: Heads I Win, Tails You Lose. XMSR/SIRI Pair Trade Should Work With or Without a Merger

Highlights

If a stock falls in the forest, and no one is there to hear it, does it still make a sound?

• That’s the salient question for satellite radio investors…those who are left, that is. Ever since XMSR and SIRI announced their merger on February 19th, the stocks have been in a free-fall. At the same time, trading volume has dropped sharply (down 44% at XM and 14% at Sirius), as investors have traded apathy for pessimism. Since the announcement of the merger, both XMSR and SIRI shares are down some 20%.

• At the center of both declines is the view that the companies’ proposed merger faces dim hopes in Washington, and that – without it – the companies face dim futures in the marketplace. Based on where the stocks are currently trading, we believe the market is assigning only a 11.2% chance that the merger will ultimately be approved

• Even if the merger doesn’t happen, the relative value gap between XM and Sirius remains our preferred way to participate in the sector. XM trades at an 11.7% discount to Sirius, despite being a better positioned company, in our view.

• XM’s strategic position in the OEM channel is better, and is only getting more so. The aggregate share of XM’s OEM partners has grown from 56.0% of the U.S. auto market at the beginning of 2004 to a 59.3% share by the end of 2006, a gain of 340 bps in two years. Last year was a particularly difficult one for Sirius’ OEM partners. Overall U.S. auto sales were down 2.4%, yet they were down 4.6% at Sirius’s partners and only 0.9% at XM’s partners

• On the other hand, if the merger does get approved, the spread between the two equities should expand by 19% versus current levels – based on the fixed 4.6x exchange ratio that Sirius will pay for XMSR shares. Since the merger announcement, the shares have rarely traded above a 4.0x ratio; the spread has remained virtually constant

• Earnings previews and updated models for both XMSR and SIRI appear at the end of this report. XM will report first quarter earnings on Thursday, April 26th at 10:00 AM ET. The dial-in number is (877) 265-5808, pass code 5409333. Sirius will report earnings on Tuesday, May 1st at 8:00 AM ET.

We believe that the relative value gap between XM and Sirius remains the single best way to participate in the sector. We view the 11.7% enterprise value gap between the two companies as unwarranted, and untenable. We are lowering our XMSR (Outperform) target price to $16 from $19 and we are lowering our SIRI (Market-perform) target price to $3.50 from $4.00

Labels: bernstein, sirius, xm

4/23/2007 09:57:00 AM

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Bear Stearns on XM Q1

Labels: bear stearns, q1 2007, xm

4/23/2007 09:50:00 AM

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Bear Stearns On Sirius

April 23, 2007

Bob Peck of Bear Sterns published a preview note on Sirius:

Sirius Satellite Radio

Looking Forward to 2H; Street Growth Ests for 1Q Conservative

Investment Thesis. Both satellite radio stocks have declined significantly since they announced the agreement to merge as the merger outcome remains uncertain and visibility on the merger process (especially at the more important DOJ level) remains limited and the retail environment remains challenging even as the OEMs are likely to pick up speed only towards 2H07 and going into 2008. While OEM will determine LT valuations, NT retail outlook remains tepid. As such, we think investor interest remains limited until there is more visibility into either the merger outcome or the YoY sales comps improve.

1Q07 Preview. Conf call scheduled for 5/1 at 8 ET at www.Sirius.com. We are tweaking our 1Q estimates marginally; key changes include the following:

• Gross Sub Adds. We are tweaking gross sub adds from the retail channel to 472k, down ~30%YoY from 659k in 1Q06, likely a reflection of the market environment that remains challenging for both the satellite radio operators, and tough YoY comps to the Howard Stern transition last year, although offset by the NASCAR transition to Sirius this year. Note, our similar YoY decline in gross adds from the retail channel for XM was 25%. From the OEM channels, we expect 501k gross adds, up about 65% YoY from the 302k level in 1Q06. In aggregate, we are projecting 973k gross adds during the quarter.

• Net Sub Adds HIGHER than Consensus. We are maintaining our net sub adds estimate of 546k, which is higher than street consensus of about 500k, based primarily on the expectation that the street has failed to incorporate the positive impact of the NASCAR transition. We are tweaking up churn to 2.3% from 2.2% previously, reflecting the one-year anniversary of Howard Stern, and higher potential churn from OEM.

• Financials. We are marginally reducing SAC est to $107, and CPGA to $141, as the company transitions to the next gen chipsets. We are projecting revenues and adjusted EBITDA of $220 mn and $(80) mn, respectively.

Labels: bear stearns, q1 2007

4/23/2007 09:44:00 AM

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Imus Produceer Casualty Of Rutgers Comments

Don Imus' Longtime Producer Out of Work
NEW YORK (AP) -

The longtime producer for Don Imus' syndicated radio show joined his boss on the unemployment line one week after the disgraced broadcaster was booted from the airwaves for racist and sexist comments about the Rutgers women's basketball team.
Bernard McGuirk, who joined the "Imus in the Morning Show" as producer in 1987, was let go late Thursday by WFAN-AM for his role in the ugly incident, CBS Radio spokeswoman Karen Mateo said Friday. CBS Inc., the parent company for WFAN, pulled Imus off the air on April 12....read more: here

4/23/2007 06:48:00 AM

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Competition Alert: Clear Channel To Launch Commercial Free Radio

Now the merger has a better chance of clearance...

CLEAR CHANNEL TO LAUNCH 'COMMERICAL FREE RADIO'; TEST IN TEXAS... DEVELOPING... read more: here

Here's the story...not quite commericial free:

In Dallas, Commercial Radio Without Commercials
By ANDREW ADAM NEWMAN
Facing increasing competition from satellite radio and iPods, Clear Channel Communications is trying something radically different at a commercial radio station in Texas: getting rid of the commercials.
As of today, KZPS in Dallas — on the dial at 92.5 FM or online at lonestar925.com — will no longer run traditional 30- or 60-second advertisements. Instead, advertisers sponsor an hour of programming, during which a D.J. will promote its product conversationally in what the company calls integration.
For example, the D.J. will identify Southwest Airlines, one of the station’s first advertisers, as the sponsor at the beginning of the program. In a prototype provided by the station, the D.J. later discusses the South by Southwest music festival, a popular annual event held in Austin, and concludes, “You know, the best way to get down to Austin for South by Southwest is Southwest Airlines. They have tons of flights. It’s the way I travel.”
The product-themed chitchat will account for about two minutes peppered throughout the hour, in contrast to the 12 minutes to 16 minutes of commercials that most stations broadcast each hour.
Advertisers will own not just the hour but also their categories. The station has four initial sponsors — Southwest Airlines, AT&T, Coors Brewing and Guitar Center — and will not sell advertising space to other airlines, phone companies, breweries or musical instrument stores.
Clear Channel’s move is not unprecedented. In 2005, three stations on Long Island owned by the Morey Organization experimented with a similar model but eventually returned to conventional commercials...read more: here

4/22/2007 09:07:00 PM

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WSJ: NAB'S Argument Is Remarkably Weak

What's the Frequency, NAB?
Wall Street Journa, April 21, 2007; Page A8

Ever since satellite-radio companies XM and Sirius announced plans to merge back in February, the National Association of Broadcasters, which represents commercial AM and FM radio stations, has been urging federal regulators to quash the deal on antitrust grounds.
The NAB's argument is a remarkably weak one, and the government would be remiss if it became a party to the group's transparent agenda, which is to stop satellite radio from luring away any more of its listeners than it already has. Which isn't much, otherwise the two satellite-radio companies wouldn't be merging.
In the name of preventing some phantom "monopoly" from forming, the NAB is effectively asking regulators at Justice and the Federal Communications Commission to help it keep the competition in check and thus deprive consumers of figuring out whether this is a viable alternative radio service.
Don't take our word for it, by the way. Last October, just months before XM and Sirius unveiled their plans to combine, NAB President David Rehr spoke openly about the make-up of the current marketplace for audio news and entertainment. "We still must address new competitors," he said in a speech to the National Press Club in Washington. "On the radio side, we have satellite radio, Internet radio, iPods, other MP3 players, cell phones, and many, many other things. How will we compete?" Not much we can add to that...read more: here

4/22/2007 06:43:00 AM

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Churn - A Clear Cut Arguement For The Merger

April 21, 2007

Some subjects simply rarely get discussed. At this point, no one else has brought this subject up, so we here at SSG decided to put together a frank analysys of churn, and how it demonstrates substitutionalty in the audio entertainment arena.

The subject of substitutionality often comes up when the merger between Sirius and XM is discussed. Those that oppose the merger argue that there is no medium that acts as a substitute for satellite radio. They develop theoretical exercises to illustrate their point, and go into a long and drawn out explanation as to why they are correct.

There is a much more simple way to address this. CHURN

Churn in this sector clearly illustrates that, for many consumers, there is indeed a substitute for satellite radio. Even if the metric that cuases the churn is financial, it is clear that there are many in this country who choose another medium for their audio entertainment. In fact, about 2.5% of the subscriber base in satellite radio discontinues the service every month. This is clearly substantiated with quarters upon quarters of data.

How does churn show substitutionality?

Actually, it is quite simple and a little common sense goes a long way.

In 2007, satellite radio will have over 2,000,000 deactivations. Now, realistically speaking, do you feel that these 2,000,000 people are giving up audio and informational content altogether? Or is it more realistic that they are simply using some other medium to satisfy their listening habits? Common sense dictates that most of these deactivations find suitable content from another medium. It is that plain and that simple. There is not an analyst or statistician on the planet that can argue otherwise.

In addition to the churn, we have the take rate on OEM installations at roughly 50%. Do you think that once the trial period ends that that area of the dashboard remains silent for the next few years? Or is it more realistic that these people are using AM, FM, CD, HD, I-pods, or cell based systems to satisfy their content desires?

Yes, there is likely a bit of “cross-over” subscribers who leave one service for the other, but realistically speaking this situation is more likely the exception rather than the rule. Certain events may transpire that have the cross-over effect spike from time to time. Events like Howard Stern coming to Sirius, the switch of NHL to XM from Sirius, the switch of Nascar to Sirius from XM, the addition of Oprah to XM, and a few others, but even these spikes do not outnumber the simple deactivations in my opinion.

In basic terms, audio content boils down to wants, needs, and dollars. For some, the trade-off of dollars for entertainment has a set limit. Perhaps the $12.95 per month is too high for them. They find a substitute in another medium that is less expensive.

The point is that there exists plenty of data to suggest that consumers do indeed find substitutes for satellite radio. Each month 2.5% of the subscriber base drops off of satellite radio. At 13,000,000 subscribers, that is 325,000 people per month that find another way to get their audio content.

Now, this subject will ire some who would rather not speak of the negative side of things (and churn is a negative subject). I submit that people who feel that way are being short-sighted. Better to look at this sector in a realistic manner…..especially if you want to have realistic results.

Not only does churn illustrate that there are indeed substitutes for satellite radio. It also is a decent predictor of price point. If prices were to increase, churn would also increase. If churn begins to overtake net additions, the prices will decrease in order to lower the churn rate.

For these companies there exists a control that is dictated by the consumer reaction to pricing. There are some who feel that a lower price of $9.95 would increase the take rate and lower the churn rate. While this would be a logical stance, there is a company aspect to this as well. Will the benefit of the company bottom line be improved if such an event were to happen? In other words, do net additions improve by a number great enough to make a price drop a profitable proposition for the company? It is a delicate balance, but it is a control nonetheless.

So, while churn may seem an ugly subject, it does cut right to the heart of the matter when people want to debate substitutionality. Yes, churn is bad, but it is also a fact of life. Better to face all of these issues head on than to ignore them……especially when they actually help prove your point for a merger. This may be one of the few times that speaking about churn can actually be a positive discussion.

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The XM Promise

April 20, 2007

XM also has similar guarantees to that which Sirius has put forth. You can review the XM Promise below or on the XM website Here

As you may have heard, XM and Sirius recently announced that they will merge to form the nation's premier audio entertainment service. This new company will be able to provide consumers with even better programming and more choices. This merger should be completed in late 2007. But between now and the merger date, we want to be sure that our 7.6 million customers, and anyone considering the purchase of XM Radio, know all the facts. This is our commitment to all of our customers — whether you are a current subscriber or plan to subscribe in the coming months.

As long as you are an XM subscriber, your XM radio will continue to receive XM's great programming. And following the merger, we expect that these existing radios will be able to receive a mix of programming from both services to bring you even more choices.

XM's programming, including Major League Baseball®, Oprah & Friends™, Bob Dylan, Opie & Anthony and commercial-free music channels, will not be interrupted by the merger. In the future, we will be able to offer the best of both companies' programming.

As the #1 satellite radio service, XM is committed to providing the highest-quality audio entertainment and customer service available today. If you have any questions, please visit our website, xmradio.com, or call XM Listener Care at 1-800-XMRADIO (1-800-967-2346).

There has never been a better time to get an XM radio. Our car, home and portable radios are available at retail stores, online at xmradio.com, and as a factory-installed feature in many new cars and trucks. For special offers on XM, visit xmradio.com today.

We will continue to provide regular updates about the merger on xmradio.com. But rest assured that our commitment to our customers continues to be our #1 priority.

Sincerely


Gary Parsons
Chairman
XM Satellite Radio

Hugh Panero
CEO
XM Satellite Radio

Nate Davis
President & COO
XM Satellite Radio

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Sirius Guarantee and Informational Campaign

April 20, 2007

Sirius filed the following today after hours. The campaign lets consumers facts about the merger and guarantees about products working after a merger.

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NAB Tactics

April 19, 2007

An interesting article regarding the NAB, and the satellite radio merger

Dinosaurs vs. Satellites
How the National Association of Broadcasters is trying to kill radio

Radley Balko April 19, 2007

Last year, the National Association of Broadcasters (NAB), the lobbying group for local radio and TV stations, began running a series of truly awful advertisements attacking satellite radio. In one, for example, you hear the play-by-play for a baseball game. Just as the announcer gets to a crucial point in the action, an operator interrupts, and asks you the listener to deposit money to keep listening, as if you were on a pay phone. A voiceover then announces, "Radio. You shouldn't have to pay for it."

The ads were economically illiterate (as if the time you spend listening to the endless commercials on traditional radio were free), blatantly dishonest (you pay a monthly fee for satellite radio, not by the hour), and roundly criticized for their broad assault on the intelligence of the average radio listener. But the NAB stuck with them. They were part of the NAB's longstanding, sometimes vicious attack on satellite radio, an emerging medium that the NAB clearly sees as a long-term threat. And with good reason.

While satellite radio still seems to be figuring out how to make a profit, it's soaring in popularity, winning over 14 million paid subscribers in just a few years. Of course, that may not be a reflection of XM or Sirius' quality so much as the mundanity and drollery of Clear Channel America. With only two business models to choose from, it's unlikely that satellite radio has come anywhere close to fulfilling its potential.

So when XM and Sirius announced a highly-publicized merger this year, everything changed for the NAB. Clearly, the two startups it so feared for so long were floundering. And with no other licensed satellite providers around, the NAB's position on the merger became clear: What's bad for satellite is good for the NAB. So the NAB would oppose an XM-Sirius alliance.

Problem is, the only colorable argument against the merger is that it would create a monopoly for satellite radio. XM and Sirius cleverly (and probably accurately) headed that objection off by noting that satellite radio competes with a variety of technologies for the listener's ear. This put the NAB in an awkward position. The lobby would have to argue that despite its 15-year effort to derail satellite radio, satellite radio was not a competitor. Of course, the harder the NAB fights and the more money the NAB spends to promote this message, the clearer it becomes that the NAB fears the competition posed by an XM-Sirius alliance. In effect, the more the NAB fights the merger, the more it undermines its own argument against it.

But adherence to logic and consistency have never stopped a Washington lobby before. So the NAB went to work. It first put an abrupt halt to the "Radio. You Shouldn't Have to Pay for It" ads (though a press release announcing the ads remains, the ads themselves seem to have disappeared from the NAB's website)..........READ MORE

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Study Shows Healthy Competition

April 19, 2007

Some interesting survey results from Arbitron. It seems to indicate a very healthy and competitive landscape:

Digital Platforms Continue to Extend Radio Beyond the AM/FM Dial, According to the Latest Arbitron/Edison Media Research Study

Listening to AM/FM radio stays strong despite growing use of digital audio platforms;

Weekly Online Radio listening audience remains steady in past year;

iPods/other portable MP3 players are the fastest expanding digital audio platform;

Increased awareness in HD Radio has not yet translated into high interest

NEW YORK; April 19, 2007 – According to the latest study by Arbitron (NYSE: ARB) and Edison Media Research, The Infinite Dial 2007: Radio's Digital Platforms, consumers are continuing to explore radio in all its digital platforms -- Online Radio, Satellite Radio, HD Radio® , and audio podcasting -- while maintaining a broad use of AM/FM radio.
Key findings from The Infinite Dial 2007: Radio's Digital Platforms:

Ø AM/FM radio continues to have a big impact on people's lives. The study asked consumers to rate the impact different digital audio platforms has on their lives. Nearly one in five (19 percent) consumers said radio has a big impact on their lives; ranking second only to mobile phones (35 percent) as the audio platform/device that has the biggest impact on the lives of its users.

Ø Those who listen to digital radio platforms do not spend less time listening to AM/FM radio. Among all persons 12 and older who participated in the study, the average time spent listening per day to AM/FM radio was 2 hours, 37 minutes compared with 2 hours, 45 minutes a day among those who use radio's newer digital platforms (listened to online radio in the last month, or subscribe to satellite radio, or have ever listened to an audio podcast).

Ø The weekly Internet radio audience remains steady over the past year at an estimated 29 million. Eleven percent of the U.S. population age 12 and older have listened to Internet radio in the past week; 16 percent of persons age 18-34 and 14 percent of persons 18-49 have done so.

Ø iPod/Portable MP3 player ownership continues to rise. Thirty percent of Americans age 12 and older own an iPod or other brand of portable MP3 player; this figure has risen from 22 percent in 2006 and 14 percent in 2005. More than half (54 percent) of those age 12-17 own a digital audio player.

Ø Fewer than 10 percent report less time with over-the-air radio specifically due to time spent with their iPod/portable MP3 player. Seventy percent of Americans age 12 and older do not own an iPod/portable MP3 player, and an additional 15 percent report the device has had no impact on radio listening. Nine percent say they are listening less to over-the-air radio due to time spent with their iPod/portable MP3 player.

Ø Awareness of HD Radio nearly doubled in the past year, but that has not yet translated into high interest. In January 2007, 26 percent said they had heard or read about HD Radio recently, compared to 14 percent in January 2006; however, only 6 percent said they were "very" interested in HD Radio.

Ø While awareness of podcasting is up significantly, usage of audio podcasting is only up slightly. Awareness of podcasting has jumped from 22 percent in 2006 to 37 percent in 2007. In that time, those having ever listened to an audio podcast have risen from 11 percent to 13 percent.

"Broadcasters should promote the vitality of over-the-air radio," said Bill Rose, senior vice president, Marketing, Arbitron Inc. "On a weekly basis, AM/FM radio is used by the overwhelming majority of Americans, and it continues to have a big impact on the lives of consumers. In addition, the widely held perception that people who use new digital platforms listen less to over-the-air radio is false. In fact, users of digital radio platforms spend just as much time listening to over-the-air radio as the average consumer."

"Consumers have shown increasing interest in and usage of radio's digital platforms over the years," said Joe Lenski, executive vice president, Edison Media Research. "Advertisers who start early will gain invaluable insight into refining their advertising business practices, resulting in a more effective use of these newer digital audio platforms."

This study, as well as previous studies, may be downloaded free of charge via the Arbitron and Edison Media Research Web sites at www.arbitron.com and www.edisonresearch.com.
How the Study Was Conducted

A total of 1,855 people were interviewed to investigate Americans' use of various forms of traditional, online and satellite media. From January 17 to February 18, 2007, telephone interviews were conducted with respondents age 12 and older chosen at random from a national sample of Arbitron's Fall 2006 survey diarykeepers. In certain geographic areas (representing four percent of the national population), a sample of Arbitron diarykeepers was not available for the survey, and a supplemental sample was interviewed through random digit dialing.

About Arbitron
Arbitron Inc. (NYSE: ARB) is an international media and marketing research firm serving the media – radio, television, cable, online radio and out-of-home – as well as advertisers and advertising agencies in the United States and Europe. Arbitron's core businesses are measuring network and local market radio audiences across the United States; surveying the retail, media and product patterns of local market consumers; and providing application software used for analyzing media audience and marketing information data. The company has developed the Portable People MeterTM, a new technology for media and marketing research.

Arbitron's marketing and business units are supported by a world-renowned research and technology organization located in Columbia, Maryland. Arbitron has approximately 1,900 employees; its executive offices are located in New York City.

Through its Scarborough Research joint venture with The Nielsen Company, Arbitron provides additional media and marketing research services to the broadcast television, newspaper and online industries.

About Edison Media Research
Edison Media Research conducts survey research and provides strategic information to radio stations, television stations, newspapers, cable networks, record labels, Internet companies and other media organizations. Edison Media Research works with many of the largest American radio ownership groups, including Entercom, ABC Radio, CBS Radio, Bonneville and Westwood One; and also conducts strategic and perceptual research for a broad array of companies including Time Warner, Google, Yahoo!, Sony Music, Princeton University, Northwestern University, Universal Music Group, Time Life Music and the Voice of America. Edison Media Research also conducts research for successful radio stations in South America, Africa, Asia, Canada and Europe. Edison Media Research also conducts all exit polls and election projections for the six major news organizations: ABC, CBS, CNN, FOX, and the Associated Press.
All of Edison Media Research's industry studies can be found on the company's Web site at www.edisonresearch.com and can be downloaded free of charge.

4/19/2007 10:49:00 PM

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Bridge Ratings, Updated April 18th

Bridge Ratings Industry Update - Internet Radio Perceptions
For Immediate Release, Wednesday April 18, 2007, www.bridgeratings.com

As part of Bridge Ratings' on-going analysis of the Internet Radio sector, the company has released some never-before-seen data on the perceptions of Internet Radio audiences. The data published in this report is based on a sample of 3000 persons 12+ who have listened to some form of Internet Radio in the last 30 days or in the week prior to the study.
Confirming our most recent projections, this report shows no significant change in the number of persons (57 million) listening to Internet Radio.
Among those who indicated they had listened to Internet Radio during the preceding 7 days for at least 20 minutes, 25% said they had listened to an AM/FM simulcast on the Internet. 34% indicated they had listened to some form of Internet Radio in the previous 30 days. The terrestrial simulcast on the Internet is gaining momentum by quarter. Many consumers of terrestrial radio report that having access to their favorite terrestrial radio stations on the Internet provides convenience and a better quality experience....read more: here

4/19/2007 09:32:00 PM

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What Cramer Said On MadMoney Tonight

Cramer's 'Mad Money' Recap: Slim's Pickins
www.thestreet.com, Apr 20

Another stock Cramer is "not totally negative on is Sirius Satellite Radio (SIRI - Cramer's Take - Stockpickr - Rating). However, he said, he can't "in good conscience" advise people to buy Sirius, because it's having such a hard time getting its XM Satellite Radio (XMSR - Cramer's Take - Stockpickr - Rating) merger through.
Cramer told viewers he's putting Sirius in the "too cheap to sell and not enough conviction to buy" category...read more: here

4/19/2007 09:07:00 PM

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Competition Alert: Slacker

via www.orbitcast.com, Apr 20

ALSO CATCH THE SSG ABOUT SLACKER INTERVIEW HERE

Slacker's head of marketing Jonathan Sasse sat down with Mark Ramsey of Hear 2.0 in an incredible audio interview, and I highly recommend everyone take a listen to it.
Not only does Ramsey address the thought that Slacker, with their own satellite delivery system, would be competing directly with Sirius-XM (several times throughout the interview). But he delves deeply into exactly what Slacker does, and how it's going to change the face of radio as we know it. Both consumers and industry-watchers alike will find interest in this interview.
"This thing is going to be huge," Mark concluded... and honestly, I couldn't agree more.
[Hear 2.0] ...read more: here

4/19/2007 01:53:00 PM

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Sirenza Opens Office In Shanghai

April 19, 2007

Followers of the satellite radio sector are likely familiar with Sirenza as a component supplier for SDARS. Sirenza annonced today that they are opeing new offices:

Sirenza Microdevices, Inc., a supplier of radio frequency (RF) components, recently announced that it has officially opened its new 107,000 square foot facility in Shanghai, China, featuring a high volume RF components factory in addition to an administrative, sales and engineering office building.

Sirenza, headquartered in Broomfield, Colo., with operations in China, Germany and the U.S., now has three multiple-use facilities in China. In addition to the new facility, the original Sirenza Shanghai office is headquarters for customer service and applications support in Asia, and the Sirenza Shenzhen office provides technical applications support and currently serves as the Asia regional test laboratory.

“Our facilities in China enhance our ability to provide real-time support to our expanding base of key customers, subcontractors and suppliers in throughout greater Asia and, in particular, within China,” said Bob Van Buskirk, Sirenza’s president and CEO. “We believe that moving our U.S.-based commercial manufacturing to Shanghai will provide a long-term, low-cost manufacturing capability to support existing and future product lines as we expand our global operations.”

The nearby Premier Devices (PDI) factory, supporting the PDI business segment, has been moved to this new facility and is now fully operational. The move of SMDI business segment manufacturing operations to this same facility is expected to be completed in the second half of 2007.

Labels: sirenza

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NAB Testimony - More of The Same

April 19, 2007

The testimony provided by the NAB representative at the hearings this week was basically more of the same. Whether the NAB stance holds water is up to the DOJ and FCC.

TESTIMONY OF RUSS WITHERS
BEFORE SENATE COMMERCE COMMITTEE

WASHINGTON, DC -- NAB Radio Board Vice Chairman Russ Withers, owner of Withers Broadcasting Companies testified today before the Senate Committee on Commerce, Science and Transportation regarding the proposed monopoly merger of XM and Sirius. The following is a transcript of his oral testimony.

* * *

Good morning Chairman Inouye, Vice Chairman Stevens and Members of the Committee. My name is Russ Withers. I am the owner of Withers Broadcasting Companies, which operates 30 local radio stations and six television stations in seven states, including Missouri and West Virginia. I am testifying today on behalf of the National Association of Broadcasters, where I serve as vice chairman of the NAB Radio Board and a member of the Executive Committee.

I am here to voice opposition to the proposed merger of this country's only two nationwide satellite radio companies, XM and Sirius.

Satellite radio is a national radio service that provides hundreds of audio programming channels to listeners across the country. There are only two such services, and they compete against each other in the national marketplace. The undeniable fact is that XM and Sirius want government permission to take two competitive companies and turn them into a monopoly.

When the FCC allocated spectrum to Sirius and XM in 1997, it specifically ruled against a single monopoly provider. The Commission foresaw the dangers of a monopoly. It explicitly licensed more than one provider to ensure "intra-market" competition and to prohibit one satellite radio provider from ever acquiring control of the other. There is no reason to change that position now.

Currently, Sirius and XM occupy 25 megahertz of spectrum allocated by the FCC for nationwide satellite radio service. With a new monopoly and a merged entity, they will continue to control this entire block of spectrum, preventing any new entrant from offering national, satellite radio service and competing against their new monopoly.

These companies have claimed that no one should worry about this monopoly, because local radio competes against XM and Sirius. Let's be very clear on this point: radio broadcasters do not compete in the national market of the satellite radio companies, but XM and Sirius do compete in the local radio markets – markets that I operate in everyday – markets like Cape Girardeau and Sikeston, Missouri.

Local radio stations can only broadcast within their FCC-defined coverage area. Local broadcasters' signals are not nationwide, and are not subscription. The national availability of satellite radio sets it apart from local broadcasters.

Withers Broadcasting operates in small and medium markets like Bridgeport, West Virginia. We are the voice of the community in times of emergency and have a unique connection to our listeners that no other medium provides.

XM and Sirius, by contrast, offer a pre-packaged bundle of national, mobile digital audio channels. KGMO in Missouri delivers outstanding local news, sports and entertainment.

Consumers, however, would never consider my station's local programming a comparable product to Sirius' 133 channels or XM's 170. A local radio station's programming is clearly not a substitute for the array of services offered by XM and Sirius. Services like XM and Sirius compete with each other - and no one else - in the national satellite radio market.

In fact, a recent FCC report and analysis on satellite market conditions shows a very healthy and competitive national, satellite radio market. Following U.S. Department of Justice merger guidelines the FCC defines the market participants as two providers, XM and Sirius. The report also finds the geographic aspect of this market to be national, subscription, and offering nationwide-licensed choices. These are inherently different characteristics and services than that of local radio broadcasters.

I can understand why XM and Sirius would want a monopoly, but that does not mean it is in the public interest. XM and Sirius, by their own admission, are not failing companies. Their current highly leveraged position is due to extraordinary fees paid for marketing and on-air talent, including the $500 million contract that Sirius awarded to Howard Stern and the $83 million dollar bonus paid to him just last year. But even with these costs, XM and Sirius have made clear they can succeed without a merger.

For these reasons and others, local broadcasters strongly oppose a government-sanctioned monopoly for satellite radio.

Thank you.

About NAB
The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts. Information about NAB can be found at www.nab.org.

Labels: merger, nab, sirius, xm

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Competition Alert: Harmon Kardon Drive + Play 2

Got a Zillion Songs? A Gadget to Help You Take Your Show on the Road By IVAN BERGER, NY Times, Apr 19

A zillion gadgets, it seems, let you pipe music from a portable player through your car stereo. But not all let you control the player with a separate knob and are both neat and easy to install.

Harman Kardon says a modular system like its Drive + Play 2 can do all of that. Coming next month for $400, in stores and online, it includes a 3.5-inch dashtop color display screen, a wireless control knob (for volume, muting, music selection, and iPod menu controls) that can be mounted wherever convenient, and a connection hub.

The hub’s U.S.B. connection works with Apple’s iPod, Microsoft’s Zune, and most other players. The hub has a line output for direct connection to stereos with audio inputs, and an FM modulator to broadcast music to stereos without them. A lighter-socket plug powers the hub but snaps off to reveal connections that can be wired into your dash. A software voice speaks menu names and initial letters as you turn the control knob, so you can keep your eyes on the road — helpful to people whose players hold a zillion songs...read more: here

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NY Times Reviews Sansa Music Player: Slightly Undercooked

A Music Player That Needs Seasoning
By DAVID POGUE, New York Times, Apr 19

Ever since the iPod became a culture-changing phenomenon, Apple’s rivals have been desperate to discover the recipe for an iPod beater.
SanDisk has just released its latest answer: the Sansa Connect ($250). The ingredients are:
1 black, shiny, softly rounded plastic case, the size of a closed cellphone;
1 click wheel, like the iPod’s but made of black rubber;
7 jacks and buttons on the edges: volume keys, earbud jack, proprietary U.S.B./charging connector, On/Off, Hold, memory-card slot;
1 antenna;
Mix gently; cook until well done.
The stubby little antenna is the secret sauce. It makes the Connect the most exciting advance in music players, at least in concept, since the iPod Nano.
Now, this Sansa is not the first wireless music player; Microsoft’s Zune, for one, preceded it.
But the Zune’s Wi-Fi is wasted. It can’t sync with a computer wirelessly or download music wirelessly. All it can do is beam a song to another Zune owner, if there is such a thing. The song self-destructs after three days or three plays.
When you’re in a Wi-Fi hot spot with the Sansa, though, you can tune into any of Yahoo’s 200 Internet radio stations. And if you’ve signed up for Yahoo’s music-rental plan ($144 a year, or $15 a month), you can download all the music you like, straight to the player. No computer necessary.
That’s a delicious twist. Surely, this is the future of music players: instant access to any song, any album, whenever and wherever you’re in the mood.
Sansa’s collaboration with Yahoo has another payoff: at any time, you can click through your own online photo collection on the bright 2.2-inch screen — whatever you’ve posted on the free Flickr photo-sharing Web site, which Yahoo owns — as your music plays. It’s magically simple, and it beats the old accordion-fold wallet photos. (You can’t, unfortunately, look at your friends’ photos.)
Now, these subscription plans have a catch: If you ever stop paying the monthly fee, all of your downloaded music vanishes.
Of course, you can also stuff the Sansa with MP3 files you’ve ripped from your own CD collection, or with songs you’ve bought for $1 each from music stores like Yahoo or Rhapsody.com. Both are synched from Yahoo Music Jukebox, a Windows-only program that’s a lot like the iTunes software. (Alas, the Sansa can’t play unprotected AAC files, like the ones the iTunes Store expects to begin selling next month.)
The MiniSD card slot is an ingenious twist. It extends the player’s built-in 4 gigabytes of memory almost endlessly. You can’t save downloaded music onto the card — all downloads are locked on the player — but the Sansa can play music and photos you’ve loaded onto the card from your PC....read more: here

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Michael Copps, FCC Commissioner Notes NAB Hypocrisy

FCC Commissioner Michael Copps during the annual FCC Breakfast at NAB2007:

"There seems to be quite the disconnect between the NAB's argument that broadcasters did not compete with satellite radio when it came to this merger, and the argument that it was "one big happy competitive family" when it came to seeking media ownership rule changes."

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UBS XM Q1 Preview

April 18, 2007

Comments from UBS on Q1 for XMSR:

XMSR 1Q07 Preview: Continued Sub Weakness Expected

Lucas Binder 212-713-4966 lucas.binder@ubs.com

- XMSR reporting 1Q07 on April 26
XMSR will hold its 1Q07 conference call at 10:00 AM on April 26. We expect weak subscriber growth with net additions of 284k (down from our prior estimate of 343k) and down 50% y-y. Weak subscriber growth is driven by our estimated 8.5% decline in gross adds and an increase in churn to 2.7% up 40 bps y-y. We believe XM will continue to improve customer service to help lower churn.

- EBITDA moving closer to break-even;
still some ways to go. We expect 1Q07 revenue of $264.5M, up 27.2% y-y and 2.9% q-q. Our EBITDA loss estimate of $(30)M is a 38% y-y improvement and 57% q-q improvement. However, we do not expect XMSR to report its first positive EBITDA quarter until 1Q09, which is our breakeven EBITDA year.

- Acquisition costs not expected to drop in 2007
We believe XMSR must work to lower its acquisition costs. We expect SAC of $67 in 1Q07 and CPGA of $100, which are both up y-y. We would expect better economies of scale from XMSR as it improves its chipset technology.

- Valuation:
Maintain Neutral 2; Lowering target to $13.50 from $15.50. We base our price target on a detailed DCF analysis. Our assumptions include a 3% growth in perpetuity and a 13% WACC. We have lowered our target to $13.50 from $15.50 on a lower subscriber outlook. We expect
SIRI to continue to gain market share from XMSR in 2007.

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UBS Comments On Sirius

Sirius Satellite Radio "neutral," target price reduced

UBSNEW YORK, April 18 (newratings.com) - Analyst Lucas Binder of UBS maintains his "neutral" rating on Sirius Satellite Radio Inc (SIRI.NAS), while reducing his estimates for the company. The target price has been reduced from $4.00 to $3.50.In a research note published this morning, the analyst mentions that the company’s 1Q07 EPS is likely to have grown by 65% y/y. Although Sirius Satellite Radio’s results for the quarter are unlikely to be impressive, they are expected to be in-line to marginally ahead of the consensus, the analyst adds. The EPS estimate for 2007 has been reduced from -$0.45 to -$0.46.

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Clear Channel To Be In Private Hands

Clear Channel board agrees to higher bid
Wednesday April 18, Reuters

U.S. radio station operator Clear Channel Communications Inc.'s (NYSE:CCU - News) board has agreed to an increased offer of $39 a share from a private equity group trying to buy it, after weeks of opposition to an earlier $37.60 a share deal.
The new offer values the company, the nation's leading radio station operator, at about $19.5 billion.
The $37.60-a-share, or $19 billion, offer by buyout firms Thomas H. Lee and Bain Capital had run into resistance from some shareholders and proxy advisory firms, who argued that the deal undervalued the company. That put the buyout firms under pressure to increase the bid.

4/18/2007 10:59:00 AM

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If HD Radio Charges, Will It Be Considered Competition?

iBiquity to introduce HD Radio subscriptions
via www.orbitcast.com Apr 18

At NAB2007 in Las Vegas, iBiquity Digital has revealed that they've selected NDS Group to provide the industry's first conditional access solution for HD Radio.NDS Group is the same company that provides the system enabling DirecTV and Cablevision to offer pay-per-view and other opt-in services for consumers. Called RadioGuard, NDS Group's system encrypts content before it is transmitted over the airwaves, then decrypts it once the radio signal has been received and verified."We believe this will be key for monetizing HD Radio," said Tom Rucktenwald, director of data applications security for NDS...read more: here

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Competitive Enterprise Institute Urges Approval Of Merger

Competitive Enterprise Institute urges regulators to approve Sirius/XM merger
via www.orbitcast.com, Apr 18

The Competitive Enterprise Institute (CEI), a non-profit public policy group, is urging federal regulators to approve the Sirius-XM merger, and to proceed with the modernizing of antitrust rules for all industries.
CEI feels that the satellite radio industry is not its own thinly segmented market, but rather a small part of a great media market that includes commercial radio, cable television, the Internet and more....read more: here

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Dylan Keeps Rock'n At XM

April 18, 2007

Labels: dylan, xm

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Cowen Issues Q1 Preview Note

April 18, 2007

Cowen's Tom Watts issued a 1Q preview note today:

Sirius Satellite Radio

Reporting Date May 1, 2007

Key Issues

- M&A Tenor Growing Negative. Since announcing a merger with XMSR on Feb 19, sentiment has grown noticeably negative for approval, unnecessarily pressuring both stocks.

- High Operating Leverage Should Drive FCF Even w/o a Merger: Incremental margins for Pre-SAC Cash Flow were 42% for SIRI in 2006. We project increasing margins of 47% in 2008, and approaching mid-60s through 2012.

We expect significant cash flow potential once SIRI turns cash positive in Q4:07, ahead of XMSR.

- 2007 Guidance Low. We believe both XMSR and SIRI set sub guidance low for FY07, setting the stage for outperformance in H2 as subs ramp from new OEM programs and seasonality.

- Gaining Market Share. We expect 526K Q1 net adds, down from 761K in Q1:06. This (31%) Y/Y reduction compares to (38%) for XMSR and represents cont.d market share gains vs. XMSR.s 355K. For FY07, we expect 2.1MM net adds vs. 1.5MM for XMSR. We expect market share to reverse in 2008 as XM.s larger OEM base ramps up installs.

Valuation SIRI trades at $657 per 2007E sub and $527 per 2008E sub..

These values compare to XMSR.s $535 per 2007E sub, and $437 per 2008E sub . a 23% and 20% difference. Our DCF analysis implies 79% outperformance relative to the market over the next 12 months.

Recommendation

We maintain our Outperform rating on SIRI even without M&A potential with XMSR. We believe SIRI can outperform based on its FCF potential alone. Compared to XMSR, we prefer XMSR based on its stronger OEM relationships (60+% market share) and better relative value . 48% of industry enterprise value, vs. 52% for SIRI

Labels: cowen, merger, q1 2007, sirius, xm

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WedBush Comments on CBS Rumor

April 18, 2007

William Kidd published the following comment in reference to the recent CBS rumor:

Satellite Radio (SIRI - BUY, XMSR - HOLD): CBS Acquisition Rumor Shakes Up Depressed Prices

Report that CBS could be interested in either XM or Sirius sparks downtrodden equities; though we lack a definitive basis to support this unsubstantiated rumor, we think it's plausible that a radio player could look at satellite radio defensively.

If true, this would not be the first time that radio pondered teaming with the enemy.

We're skeptical that CBS, or any other media player for that matter, would attempt to combine both Sirius and XM given all that has already transpired.

The Senate also met on the merger yesterday: debate continues but the quality of the debate itself does not seem to be progressing.

The recent sell-off is overdone: Sirius is worth a strong look for investors with longer-term horizons.

Labels: cbs, merger, sirius, xm

4/18/2007 09:50:00 AM

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Sirius Files SEC Form 4's

April 17, 2006

Today Sirius filed Form 4's for Scott Greenstein and James Meyer. There are many who will look at this transaction and think that insiders are selling out. This is not the case if you look deeper into the transaction .

SCOTT GREENSTEIN

Sold 153,023 shares on 4-13 for a price of $3.08

This sale was made to cover the taxes and brokerage fees associated with the gain he had on restricted stock that had vested. Once the shares vest, the capital gains taxes are due. Mr. Greenstein sold enough of his shares to satisfy tax obligations and brokerage fees. Sales such as this are not tied to a sentiment about the company, but are rather tied to Uncle Sam demanding his cut.

JAMES MEYER

Sold 132,699 shares on 4-13 for a price of $3.08

The sales for Mr. Meyer is identical is reasoning to that of Mr. Greenstein.

Uncle Sam always gets his cut.....plain and simple.

Labels: sirius, stock sale

4/17/2007 11:27:00 PM

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A Deeper Look At The CBS Rumor

April 17, 2007

One thing that today illustrated was how fast things can change for Sirius and XM. Clearly there is a lot of money exiting these equities early in the day, but just as clear is that there is a lot of money on the sidelines waiting to hop into Sirius or XM.

The CBS rumor now adds yet another series of thoughts surrounding the proposed Sirius and XM merger.

What if a company such as CBS wanted to get into this business?

Would there be a premium paid?

What becomes of the $175,000,000 break-up fee that is in the terms of the agreement?

Could a buyer swoop in and grab one of these companies while the proposed merger is happening?

Are these companies attractive to outsiders?

Why would a company see Sirius and XM attractive?

Which company is more attractive to an outsider?

Does the thought of a proposed bid by a terrestrial radio firm, or any firm for that matter, give a pause to the thought process of the DOJ? The FCC?

These are all questions that investors in this sector need to ask themselves. None of these questions have an exact answer, so investors typically find themselves trying to guess.

Sometimes taking a step back from the excitement provides enough answers for someone to make a better decision.

First, we should take a look at whether it is possible to even happen. The short answer is that yes, it could happen. There is however a break-up fee of $175,000,000 involved that the acquiring company would likely have to absorb. Does that make an outside deal cost prohibitive? Likely it doesn’t in my opinion. While the sum involved is substantial, the market cap of these companies has gone down by more than that amount since the merger was announced, and it represents about 20% of the proposed subscriber revenue for one of these companies in 2007. More simply stated think of it as the subscriber revenue for 1 quarter. That begins to put the value of the break-up fee into perspective.

If CBS were to express interest in acquiring satellite radio company “A”, they would approach that company’s board to negotiate. The board of Company “A” would then consider the CBS offer in comparison to the benefits of a merged satellite radio company, while also considering the likelihood for merger approval. There are many moving parts, but in the end, if CBS had a strong enough desire, a deal could happen.

Now, we need to consider what about these companies would be attractive to a company such as CBS? There are many things that could be attractive, but the biggest factor is “TOP LINE” growth. Sirius and XM have TOP LINE growth. Typically TOP LINE growth is required to see healthy BOTTOM LINE growth happen. A healthy blend of growth is most desirable.

Both TOP LINE and BOTTOM LINE growth are useful in determining the financial strength of a company, but they demonstrate differing aspects of a company. These types of growth are not interchangeable. BOTTOM LINE is more of a measure of how efficient a company is with its spending and operating costs and how effectively it has been controlling total costs. TOP LINE growth is an indicator of how effective a company is at generating sales and does not take into consideration operating efficiencies which could have a dramatic impact on the bottom line.

Terrestrial radio has started to become more stagnant at the TOP LINE. By contrast, satellite radio is a growing sector with the deals and structure in place to continue to grow on the TOP LINE. Terrestrial radio powerhouses have become very good cost cutters, and are effective at the BOTTOM LINE. This was necessitated by the influx of competition from satellite, internet, cell phones, and MP3 players. The existence of these competitors has made terrestrial radio powerhouses become more efficient.

Thus, in theory, you would be acquiring a medium for TOP LINE GROWTH while being able to maintain your BOTTOM LINE efficiencies. Such a deal could make great economic sense.

Now the tricky part comes into play. Which company is more attractive, or is getting both better? Likely, there would be the same issues that are being bandied about now if a company such as CBS were to try to acquire both. The path of least resistance is likely to go after one. Which is more attractive? Well, XM has a lower market cap, but the enterprise value is what comes into play. According to Yahoo, the EV of Sirius is 5.09 Billion, and XM is 4.79 Billion. Thus, XM is less expensive by $300,000,000. Now you need to consider brand awareness, content contracts, OEM contracts, current market share, future market share, debt load, cash on hand, cash flow, and many other items. In the end, a company such as CBS would have to weigh out all of these items to find the better value, and then tack on $175,000,000 and see if it is still a better value. Arguments of “attractiveness”’ can be made for each company. This piece is not about which is better, merely what the exercise would be to arrive at a potential decision. These are questions that investors who are considering a move in this sector should ask themselves to determine the proper play, or whether or not a play even exists.

One logical question is if you have terrestrial stations, why buy a satellite radio company. The answer is simple yet complex. Think about the ability to deploy sample satellite content on HD radio. Think about the ability to advertise a premium subscription based product on free radio. Think about the ability to broaden the footprint of terrestrial shows via satellite. Think of the ability to advertise on both platforms. Think of the ability to appeal to any consumer, rather than specific niches and price points. There are many reasons a terrestrial radio company would want to get into the satellite business.

Simply stated, an already perplexing situation has had a new element added. That element could come into play at any time, and investors need to be cognoscente of this. The popular belief prior to today was that there would be little action aside from the arbitrage spread with Sirius and XM until the DOJ and FCC are close to a decision (something most people feel is months away). With this new information, investors now have new items to consider.

The point of this piece is not to propagate the rumor of today, but rather to get you the investor to think more deeply into the issues at hand as you consider your investment decisions. Sometimes that requires us to step back and observe an issue from another angle. Looking at the possibilities is free. Not knowing about them can cost you. Stay informed, and think about things like this from all sides.

Labels: buyout, cbs radio, sirius, xm

4/17/2007 10:58:00 PM

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WCS Challenges Sirius Backseat TV

April 17, 2007

If you have followed this sector for any length of time, it will come as no surprise that WCS is challenging Sirius new Backseat TV initiative. WCS, like the NAB has constantly challenged pretty much anything to do with satellite radio over the years with the exception of the period where XM was going to buy the WCS spectrum.

The WCS filing with the FCC can be viewed HERE

In a nutshell, WCS questions whether or not such services are permitted under the license issued to Sirius.

Labels: sirius, sirius backseat tv, wcs

4/17/2007 09:45:00 PM

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CBS Rumor

April 17, 2007

It seems that there are numerous requests for substantiation of the CBS rumor that happened at 2:00 PM today. We respect this request, as information regarding equities rightfully needs substantiation. For long-time readers of SSG, you already know what this site is about, and that we follow-up and source all of our stories very closely. New readers may not yet be aware of our track record. For those readers, welcome to SSG, and we hope you enjoy our site.

As we stated earlier, the story started with a note from briefing.com. Click the image to enlarge.




Briefing.com is a subscription service, and thus, unless you have an account, a link will not work for you. In order to give some substantiation to the story, I have taken the liberty of taking a screen shot from briefing.com. If readers are interested in getting reports as they are issued, we suggest opening an account with briefing.com, or a similar service (there are several).

4/17/2007 05:44:00 PM

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Orbitcast Outlines The NAB's History of Hypocrisy

The NAB: A history of hypocrisy
via www.orbitcast.com, Apr 17

When NAB President and CEO David K. Rehr delivered his opening keynote address at NAB2007 in Las Vegas yesterday, he unsurprisingly used the opportunity to voice the NAB's adamant opposition to the Sirius-XM merger. Rehr said the merger "certainly would not be in the consumer's benefit," adding his view that "this is not about the consumer. It is not about advancing technology. It is about lining the pockets of financiers and corporate executives."So let's take a look at the NAB's long history of lobbying in Washington against the development of satellite radio. Afterall, this is an organization that is so concerned with the advancement of technology, the benefits of the consumer - and at same time, not concerned with the lining of one's pockets. Surely then they wouldn't try to stifle open competition from satellite radio right?
The reality is that for more than 25 years, the NAB has objected to the evolution of communications technology, including satellite television, "drop in" radio stations, low-power radio and low-power TV band devices... all in addition to their opposition to satellite radio...read more: here

4/17/2007 02:19:00 PM

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Orbitcast: Competition In The Audio Market

4/17/2007 02:08:00 PM

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Takeover Rumors: CBS Could Bid For XM and/or SIRI

Live In Play, XMSR XM Satellite: Hearing rumor that CBS could make a bid for XMSR and/or SIRI (11.54 -0.33)
CBS, XMSR, SIRI

4/17/2007 02:08:00 PM

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Sinatra Show To Debut April 19th On Sirius

April 17, 2007

Labels: content, sinatra, sirius

4/17/2007 01:28:00 PM

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Press Split on Merger Opinion

April 17, 2007

Labels: merger, senate hearing, sirius, xm

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Slacker - A Closer And Deeper Look

April 17, 2007

I had a chance to catch up with the folks at Slacker to get a bit more detail about the company and the product. Slacker promises to be a very compelling product, and consumers can look forward to a summer launch of Slackers portable device. For now, consumers can build playlists on the Slacker website, and enjoy the service with anticipation of more to come.

A Slacker spokseman was kind enough to give me some valuable time and answer a few questions:

SSG - Slacker seems to want to fill a niche in a unique way via allowing users to have both a discovery method and a recording method on one device. Do you think that in reality this niche that you are filling is more like a chasm that will have many people gravitating towards the slacker solution?

SLACKER - We think a lot of people will like Slacker.

SSG - I am sure consumers will love it. How important to Slacker is the hardware component of the business? Will hardware sales be a revenue generating vehicle, or will the hardware facilitate greater revenue for the service in general?

SLACKER - Slacker provides a free Personal Radio service that can be experienced on your personal computer (PC or Mac), in a portable on the go environment, and or in the car. There are several Slacker revenue sources:

Labels: slacker

4/17/2007 12:45:00 PM

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Judges Panel Throws Out Request To Reconsider Internet Radio Royalties

April 17, 2007

If you want to be in the radio business, the easiest and quickest platform was internet radio. With the boom of the internet, many internet radio stations came into existence. Now, many may vanish because of new royalties set for internet radio.

Yesterday, a panel of copyright judges threw out a request to reconsider a ruling that has increased the royalty rate for content played on internet radio. The initial royalty ruling, delivered on March 2nd, has been opposed by companies big and small, who see the higher fees as something that could put many of the smaller companies out of business.

In this latest ruling, the Copyright Royalty Board judges went so far as to deny all motions for rehearing. In addition, the panel also declined to postpone a May 15th date for the new royalties will have to be collected.

The only glimmer of good news for internet radio companies came in the way royalties are calculated. For 2006 and 2007 the royalties are based on the number of hours a consumer listens. beginning next year, the structure will be for a per song and per listener system.

For webcasters, they say that the new system makes their business even more difficult. Terrestrial radio does not have to pay such fees, and many web based radio stations feel that they were already placed at a distinct disadvantage because of this. Higher fees exacerbate the issue. The theory behind terrestrial radios free play deal is that the air play helps promote the sale of CD's and downloads. Web radio argues that they also promote sales of CD's and downloads. Terrestrial radios deal in mandated by law at this point, but as this issue continues to be negotiated, we as consumers could well see substantial changes in the future.

4/17/2007 10:24:00 AM

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Karmazin Speaks Of Merger Benefits

April 17, 2006

Sirius Satellite Radio CEO Mel Karmazin Reiterates Benefits of Sirius-XM Merger
Tuesday April 17, 10:00 am ET


WASHINGTON and NEW YORK, April 17 /PRNewswire-FirstCall/ -- SIRIUS Satellite Radio (Nasdaq: SIRI - News) and XM Satellite Radio (Nasdaq: XMSR - News) announced that SIRIUS Chief Executive Officer, Mel Karmazin, testified today in a hearing before the Senate Committee on Commerce, Science & Transportation regarding the SIRIUS-XM merger. Mr. Karmazin's testimony highlighted the significant benefits for consumers resulting from the proposed merger and the extensive competition that satellite radio faces from a wide range of players in the audio entertainment market. In his testimony, Mr. Karmazin stated:

The Combined Company Will Offer Consumers More Choice At Lower Prices

The key to getting more subscribers will not be to widen the price
gap between free and what satellite radio charges. Instead, it will
be to offer consumers a better value.

The merger will allow us to lower prices. Consumers who want fewer
channels than currently offered will be able to select one or more
packages of channels for less than $12.95 per month.

Importantly, significant portions of the savings achieved through the
merger will be shared with customers immediately and in the long-term
through lower prices and improved service offerings.


Satellite Radio is a Small Part of a Highly Competitive and Ever-
Expanding Market for Audio Entertainment

The audio entertainment market today is vibrant, competitive, and
innovative, and every indication is that it will be even more so in
the future. We believe that the combination of SIRIUS and XM will be
good for consumers as it will intensify this competition, expand the
choices for consumers, and reduce prices.

The market for audio entertainment in the United States is robustly
competitive and rapidly evolving. SIRIUS and XM must compete
directly and intensely with a host of other audio providers for
consumer attention.


The Merger Will Help Accelerate Deployment of Advanced Technology

The combined company will be able to offer consumers access to
advanced technology sooner than would otherwise occur. In
particular, the marriage of the companies' two engineering
organizations will ensure better results from each dollar invested in
research and development.

While no radio will become obsolete as a result of this transaction,
we fully expect the merger to stimulate the development of new
interoperable, highly portable, low-cost, and user-friendly devices.

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Rehr Delivers Keynote Speech At NAB2007 - And Yes, He Mentions The Merger

April 17, 2007

REHR DELIVERS OPENING KEYNOTE ADDRESS AT NAB2007

WASHINGTON, DC -- NAB President and CEO David K. Rehr delivered the opening keynote address at NAB2007 in Las Vegas today. Below is a transcript of his prepared remarks.

Thank you and good morning.

Radio and TV broadcasters and our network partners implicitly understand the power of images.

Radio reporter Herb Morrison covered the explosion of the luxury airship, the Hindenburg when it burst into flames on May 6, 1937, in Lakehurst, New Jersey. His broadcast created a powerful image in the minds of the radio audience. You can hear the compassion and horror in More-is-son's voice. Let's listen.

Television, of course, also gives us powerful and indelible images, like these unforgettable events in history. These are moments we'll never forget.

Today, I want to look beyond the power of images to the power of words — exemplified by these great statesmen.

As we have just heard, words have consequences.

The words that we use in our business also have consequences. These words are critical to how we redefine our issues and our identity as we proceed into our digital future.

And that's what I want to discuss today.

But before I look forward to what we must do in the future, let me give a quick summary of what the NAB has accomplished over the past year.

You can call last year Phase 1.

It was a transition and it was successful.

For one thing, it was a year of listening — for the organization and for me personally. I spent much of the year listening to what you said our strengths are what our challenges are. I listened to your hopes for this business and, frankly, your fears.

I tried to be visible.

I tried to be everywhere, as you can see from this map. And where I couldn't get, other NAB executives went. And no matter where I traveled, I tried to spread the energy and excitement I feel for this business that is reinventing itself.

Last year also marked a transition in our attitude and approach toward advocacy, which is a much more active word than "lobbying." As you may know, the word lobbying comes from those who stood in the lobby of the Willard Hotel in Washington, D.C. in the 19th century, waiting for members of Congress to come see them.

Ladies and gentlemen, today we can't wait. If we simply wait and react, it's often too late. Instead, we have to anticipate.

In the past year we have implemented many changes at NAB to signal to Capitol Hill, the Federal Communications Commission, and others that this organization is going to be more aggressive.

It will be forward-looking. We will lead, not follow.

I asked the NAB staff, "How can we do this better?" I asked many of you the same question. I asked our friends on the Hill. We took a hard-eyed look at our standing in Congress.

As a result, one of the things we did is beef up our government advocacy team with strong, bi-partisan hiring. We are set to do battle. But we can not do it alone.

Over the last year, one of the goals of NAB has been to work more closely with our partners on issues of concern to all broadcasters.

We are working closely with groups like the Television Advertising Bureau, the Radio Advertising Bureau, the HD Alliance and the Radio and Television News Directors Association, among many others.

But most especially, we must have a close working relationship with our network partners. ION Media Networks, Univision Communications, and The Walt Disney Company representatives serve on our Board of Directors. And Preston Padden of the Walt Disney Company serves on our executive committee.

And now the big news:

Today, I am very pleased to announce that NBC has joined our association.

I would like to thank NBC President & CEO Jeff Zucker, Executive Vice President and General Counsel Rick Cotton, and President of NBC's Television Stations and Network Operations, Jay Ireland. Jay is with us today, and Jay, I want to thank you for this commitment. We appreciate your support and confidence, and we look forward to working together on behalf of all broadcasters. Jay, please stand and be recognized.

Yes, last year marked a transition, a first step, a rethinking not only of our brand but of our business. We began working to insure that our branding and our messaging was consistent.

In order to advance our agenda, we want to make sure that everything we do, everything we say – we say and do with an eye toward the Congress. And to help us speak more consistently, more compellingly, more positively, we created a new marketing communications group and a new media relations team. I believe we have our internal house in order for the next phase.

Phase II.

Phase II takes us a step further.

Phase II involves how NAB frames issues, defines words, and defines ourselves. In our businesses we understand the power of images very well. We also understand how to use words that paint the right mental pictures for our audiences. But we must apply that method to ourselves, and how we describe our business.

Words have consequences.

And we need to be more astute choosing the words that describe us and our positions on the issues. We need to choose words that advance our cause — not words that are inherently self-defeating, confusing, defensive, or simply outdated. The words we use, ladies and gentlemen, matter.

Now why, am I making such a big deal of this? Well, do we call the new, high-tech Mercedes S-Class car a horseless carriage? Of course not.

Broadcasting is using the equivalent of horseless carriage language in many ways. We have been using 20th Century language to define ourselves and our positions in a 21st Century world. And frankly, that has to change.

As an industry we need to rebrand over-the-air radio and television broadcasting to reflect the new digital industry that we are creating. A new vocabulary will make our industry and our issues even more understandable to policymakers and the public and more in harmony with the future.

Let me start with an example of success thanks to iBiquity radio.

When iBiquity used the term IBOC-In-Band On-Channel Radio-no one, well, perhaps a few of us, had a clue what it meant. Then iBiquity did something very smart. They changed IBOC to HD Radio. And suddenly a light bulb went on. People got it. Because they already knew what HDTV meant. That changed vocabulary is one reason, I believe, HD Radio is taking off.

iBiquity's change in terminology is an example of how we should all be thinking differently.

But let me give you an example of a television issue where I believe our word choice has put us at a disadvantage.

Multi-casting. Must-carry. What does it all mean?

With the transition to digital, broadcasters will be able to offer multiple streams of programming within their current television broadcast signal. The terms surrounding the issue are terms like "multicasting" and "must carry." When people hear about "multicasting," they assume that the cable companies have to cut their channels to accept ours.

Now we all know that's not true.

This is not a case where the pie is only so big and we want to eat the cable companies' slices. Through the magic of compression technology, we are making the pie bigger by adding extra slices, extra programming. The cable companies intend to strip out our new programming because we're in competition.

This is in effect "stripping."

And even though NAB holds its annual convention in Las Vegas every year, and what happens in Vegas stays in Vegas, let me assure you we are "anti-stripping." That's what's happening. They are ripping out our data, taking our valuable programming away from consumers. We're not asking to take someone else's property or programming. We're simply asking that the cable companies not take ours. We're simply asking that they do not take the anti-competitive step of stripping out our signals.

We have already begun to take this message to Congress and it has been well received.

Another term that works to our disadvantage is "down conversion." Now that sounds like it has something to do with duck feathers. Perhaps converting them to some kind of renewable energy source. But we know that's not what it means.

In the last Congress, draft legislation would've permitted cable operators to down convert or degrade a television broadcaster's high definition signal to a standard one. This would allow cable companies to carry their own channels in full HD while degrading our signals.

Let me describe what is really happening.

Consumers spend thousands of dollars on HD sets. Meanwhile, local broadcasters have already spent billions of dollars on the transition to digital. But what we have here is broadcast discrimination by the cable companies.

It is digital discrimination.

It is HD discrimination

And doesn't calling it discrimination make more sense than "down conversion?" The NAB will work on Capitol Hill to protect the investment of TV viewers and TV broadcasters alike. We will work to prevent the discrimination of high definition broadcast signals.

Then, we have the issue of what unfortunately has been called "performance rights."

Yes, people should be ALLOWED to perform! What good American is against denying rights?

We have civil rights. We have human rights. We have property rights. We have a whole Bill of Rights in the Constitution. But performance rights?

This is not about a right.

It's about a wrong that the record companies are seeking to perpetuate.

Radio has long played the record companies' music at no charge to them, the artist, or the listener... and in return the record labels and the artists have received free promotion of their products.

Free music for free promotion.

This arrangement has been mutually beneficial to radio, the record labels and the artists. Radio airplay continues to be the driving force behind music sales in this country. But now... the record labels want the government to impose a tax on radio stations for playing their artists' music.

Imagine the brazen greed it takes for the record companies to expect us to pay them for the honor of marketing and promoting their artists' music. It would make much more sense for us to charge them for our promotional efforts.

We will advocate that Congress oppose this levy on the market. If successful, it would be a government imposed performance tax. And we will fight it with everything we have.

This next clip is Mel Karmazin, familiar to some of you as the CEO of Sirius satellite radio, testifying before Congress recently. As you will see, he is attempting to define moving from two companies to one company as a merger, not the duopoly to monopoly that it is.

And on this point, Mel and I agree.

This merger will not be approved.

No matter how much Mr. Karmazin and everyone else at Sirius and XM use the word, it is not a merger they seek. It is a monopoly. It is a government sanctioned monopoly.

Now some of you might not be aware I am an economist by training. I ask you, when has a monopoly ever served the interests of the consumer?

In 1997, when the FCC authorized two nationwide satellite radio operators, it specifically prohibited them from merging. The bad business decisions of XM and Sirius -- should not be rewarded with a government bailout in the form of a monopoly.

This certainly would not be in the consumer's benefit.

It will be a huge consumer headache because the companies use two different technologies which are not compatible with each other. Like beta and VHS. No, this is not about the consumer. It is not about advancing technology. It is about lining the pockets of financiers and corporate executives.

A monopoly is a monopoly is a monopoly, and we at NAB will continue to adamantly oppose it.

Ladies and gentlemen, here's the big picture: we need to reframe and rebrand not only those issues but perceptions about the broadcasting business itself.

To be honest, we, at the NAB, don't yet have all the answers.

But I do know that terminology like "free-over-the-air broadcasting" has become a bit clunky and perhaps outdated. I do know that terms like "terrestrial radio" are meaningless at best.

I was up on Capitol Hill recently and one of the hearing witnesses used that very term.

A congressman said, "Terrestrial radio? As opposed to extraterrestrial?" Terrestrial radio sounds like it either involves aliens or is something from a bygone time - which we are not.

Internet radio sounds like the future. Wireless sounds like the future. Digital television sounds like the future. High def sounds like the future. YouTube, Google, iBiquity sound like the future.

What does "free over-the-air broadcasting" sound like? I think you know.

We were wireless before it was hot, but we are captives of the language of decades gone by. The language of our past is confusing and perhaps obsolete. We need to update and clarify. We need to reframe and rebrand.

That is with one exception.

One word that is admittedly old-fashioned, yet continues to have power.

The word is local.

It's a word that policymakers immediately understand and definitely appreciate. In this day when society is homogenized and globalized with international corporations, local broadcasters are the only means to keep people and communities together and informed.

The NAB right now has a team working on finding the best words to define us and take us into the future. This will be a long and continuing effort. But, we need your help. We need your ideas. We need your self-discipline, so that we all speak the same language.

We need you to change the way you think and communicate about your business-in your marketing and in your public affairs efforts.

With the emergence of digital radio and digital TV we have an ideal opportunity to do just that.

As the broadcast business reinvents itself technologically, we must also reinvent our identity. We should draw on the best of the past, and redefine it for the future.

And my pledge to you today is this: the NAB is committed to redefining this business, so that perceptions will match our progress.

Broadcasting is being reborn – and is becoming a new business for a new age with a great future.

Thank you very much.

Labels: hd radio, merger, nab, sirius, xm

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Hypocrisy Alert: Payola Investigation Settled

Broadcasters to Pay $12.5 Million for "Possible" Payola Violations
BROADCASTERS PAY $12.5 MILLION TO RESOLVE POSSIBLE “PAYOLA” VIOLATIONS

Washington, D.C. April 16, via SatelliteRadioTechworld

The Federal Communications Commission (FCC) today released Ordersadopting Consent Decrees with CBS Radio, Citadel Broadcasting Corporation, Clear Channel Communications, Inc. and Entercom Communications Corp. (collectively, “the broadcasters”).Under the Consent Decrees, the broadcasters agree to pay a combined $12.5 million to close investigations into each broadcaster’s possible violations of the Commission’s sponsorship identification rules for the practice commonly referred to as “payola.” Specifically, the Consent Decrees resolve allegations that the broadcasters may have accepted cash or other valuable consideration from record labels in exchange for airplay of artists from those labels, without disclosing those arrangements.In addition to the $12.5 million in voluntary contributions, the broadcasters agree to implement certain business reforms and compliance measures. Key provisions of the Consent Decrees include:* Prohibition on company stations and employees exchanging airplay for cash or other items of value except under specified conditions* Limits on gifts, concert tickets, and other valuable items from record labels to company stations or employees* Appointment of Compliance Officers and market-level Compliance Contacts responsible for monitoring and reporting company performance under the Consent Decrees* Regular training of programming personnel on payola restrictions These and other measures by the broadcasters should ensure their future compliance with the sponsorship identification rules....read more: here

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Bank Of America Cautious On Terrestrial Radio Stocks

Live In Play, www.briefing.coom, 17-Apr-07, 07:48 AM

BofA reiterates caution of Radio group, sells on CXR, ETM, CDL

BofA says their Channel checks indicate that radio industry rev declined ~4% YoY in March, well below their est for growth of ~2%. The decline was broad across the largest markets, none of the markets surveyed registered positive growth for the month. Firm's channel checks also indicate that radio's recent weakness has persisted in April with continued weakness into the all-important months of May and June. They have reduced their 1Q07 industry rev growth est to 1% from 2%. A poor March suggests that there is some risk to 1Q07 rev ests, especially for ClearChannel (CCU -- though maintain Buy due to asset value) and possibly some risk to Cox Radio (CXR) and Entercom (ETM). Firm would also sell Citadel (CDL).

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Internet Radio Dealt A Blow

Copyright Royalty Board rejects appeals from Web broadcasters
By MarketWatch, Apr 16, 2007

Internet radio broadcasters were dealt a setback Monday when a panel of copyright judges threw out requests to reconsider a ruling that hiked the royalties they must pay to record companies and artists.

A broad group of public and private broadcasters, including radio stations, small start-up companies, National Public Radio and major online sites like Yahoo Inc. (YHOO) and Time Warner Inc.'s (TWX) AOL, had objected to the new royalties set March 2, saying they would force a drastic cut in services that are now enjoyed by some 50 million people.
In the latest ruling, the Copyright Royalty Board judges denied all motions for rehearing and also declined to postpone a May 15 deadline by which the new royalties will have to be collected.
However, they did grant leniency on one point, allowing the Webcasters to calculate fees by average listening hours, as they had been, as opposed to the new system of charging a royalty each time every song is heard by an online listener. That exemption counts for last year and this year. After that, the new per-song, per-listener fee structure goes into effect.
Many Webcasters say the sharply higher royalty fees will put them out of business. Talk of the ruling dominated a one-day meeting of Internet radio broadcasters being held in Las Vegas alongside the annual conference of the National Association of Broadcasters, a group representing local radio and TV stations...read more: here

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Some Companies Have Already Married Sirius and XM

April 16, 2007

New SelectRadio(R) Software First to Bring Sirius and XM Radio Channels Together on Mobile Phones


LAS VEGAS, Apr 16, 2007 (BUSINESS WIRE) -- Today, a new version of SelectRadio software was introduced that lets users enjoy more than 160 channels of Sirius and XM Radio virtually anywhere, anytime with their Windows Mobile wireless handheld phone or PDA. SelectRadio software users can also see "what's playing" on any of the available satellite radio channels and set up the patent-pending HyperScan(TM) feature to automatically seek or skip artists to match their personal tastes.

"Consumer interest in content for their mobile devices is accelerating and SelectRadio's advancement of making satellite radio available for cell phones is a solid step forward for both the consumer and the satellite radio companies. In fact, the variety of content being offered by SelectRadio will likely contribute to the expansion of appeal for this mobile audio content," said David Van Dyke, president, Bridge Ratings.

The new SelectRadio software version also expands free content offerings across the spectrum of more than 5,000 music, news, talk and weather channels available through the software's easy-to-navigate interface. For example, SelectRadio has added a dedicated screen of presets for over 80 of the top financial news podcasts as selected by StreetIQ.com (FCON, Trade ).

"We are thrilled to help bring consumers one-click mobile access to the best financial podcasts from the thousands that we review each month. With SelectRadio software's new StreetIQ.com presets, users get hassle-free access to the freshest episodes of our top-rated programs - it doesn't get any easier to stay up to date," said Stephen Malaster, founder of StreetIQ.com.

SelectRadio software has also expanded the number of BBC content choices by more than 25 percent with the addition of on-demand programs from the BBC World Service. Users can quickly access the new content additions via dedicated touchscreens of presets for AccuRadio, BBC, radioio, Shoutcast, Sirius (SIRI, Trade ), StreetIQ.com and XM Radio (XMSR, Trade ), or create personalized groups of channels and podcasts from any of the many music, news, sports, and talk content choices displayed in the local directory. Users also can enter or import a list of favorite podcasts (from programs such as iTunes, Juice/iPodder or sites such as Digg.com) to take advantage of the one-click access to the freshest episodes without the hassles of downloading.

Access to either Sirius Internet Radio or XM Radio Online channels requires an account, which may be available free to existing radio subscribers or is available separately from XM for $7.99/mo. ( http://xmro.xmradio.com/xstream/index.jsp ) and from Sirius for $12.95/mo (https://home.sirius.com/webCUWI/NewSir1.aspx). SelectRadio also supports subscribers of the Soundpass commercial-free versions of the radioio channels. All of the other channels and podcast programs available from the latest SelectRadio software version are free and do not require a subscription.

The new version 3.5 of SelectRadio software is compatible with a wider variety of handheld phone models and PDAs such as the Treo 700 series, the UTStarcom 6700, HP hw65/69xx, HTC Universal, Hermes and others with Microsoft Windows* Mobile WM 2003SE/WM5.0 PPC or Phone Edition operating systems.

For live listening, SelectRadio software requires a network connection via either the handheld wireless GPRS/EDGE, EVDO, or WiFi connection or through the USB ActiveSync connection to the desktop. SelectRadio software is priced at $25 for a device-specific license. Customers using licensed copies of earlier SelectRadio versions can upgrade the same device to v3.5 for free. A free 10-day fully functional trial version is available for download directly to compatible mobile devices prior to purchase at www.selectradio.com .

All brands and trademarks are the property of their respective owners.

SOURCE: SelectRadio


PR Works Inc.
Anne Price, 602-840-6495
anne@prworksonline.com

Labels: cell phones, select radio, sirius, xm

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RBC Weighs In on CCU and Google Deal

April 16, 2007

Latest research from David Bank - RBC Capital Markets*

RBC/CCU: The Shot Heard Round The World, Or A Pop Gun?

CCU and GOOG Agree To Sell Clear Channel Radio Ads Through Google Audio

CCU First Radio Broadcaster Moving to Monetize Offline Inventory Through Online Mechanism-Clear Channel has signed a multi-year contract with Google to sell advertisements on Clear Channel Radio's 675+ stations.

Deal Involves Commitment of Primetime Inventory-The agreement involves a guaranteed commitment of a reported 5% of CCU's inventory. This likely includes at least some prime as well as remnant inventory. We expect this will give Google Audio enough inventory in the crucial top 25-50 markets to enable advertisers to make flighted buys in
necessary markets.

Could Be A Big Coup for CCU-5% of CCU's 2006 radio revenue (excluding anticipated divestitures) would imply roughly $150mm in inventory given to GOOG. We think CCU will likely keep the majority of the revenue, given previous Google revenue share deals. CCU indicated that Google will focus primarily on advertisers who currently run ads online but do not run ads on radio. Should Google succeed in bringing new advertisers into radio, this will be viewed as a big win.

Trying To Limit The Risk Of Cannibalization-It is unclear how much revenue will be incremental vs. simply redirected. We believe the key risk to CCU is that existing advertisers simply migrate from the offline purchase of inventory through traditional sales
representatives to Google Audio's online platform, in search of pricing arbitrage.

* Mitigating risk is potential for arrangement to usher in new class of radio advertisers, tightening demand for inventory and driving pricing up.

Ultimately a Short-Term Positive-CCU will likely pick up at least some incremental guaranteed revenue from the deal. Given our expectation for 1% radio revenue growth in 2007, we don't think it will take much to make an impact.

But Jury Still Out on Long-Term Implications-Whether move increases demand or decreases pricing remains to be seen. The agreement is expected to "go live" by the end of 2Q07. At that point, the impact of online distribution of offline radio inventory should become more evident.

LBO Shareholder Vote on April 19-Although it appears increasingly unlikely shareholders approve the buyout, upside in either scenario still possible. Exclusive of an LBO, investor sentiment and our previously published break-up analysis suggests restructuring
solution could support low-40's stock price.

We use a triangulated valuation methodology to derive our $37 price target for Clear Channel. We average our DCF analysis and our 1-year forward discounted multiples on a blended 2006E / 2007E EBITDA and FCF. We use a 15x FCF multiple as this approximates a "normalized" average one year forward P/E multiple for the S&P 500 for the past 15
years, where in a steady state, we believe net earnings and FCF converge. We use an 10x EBITDA multiple as this represents the approximate multiple for Radio broadcasters. In addition, we adjust EBITDA and FCF to include FAS123R expenses in our valuation
methodology as we believe that these are true economic expenses that could potentially shift toward cash expenses over time.

Given growth expectations for 2007 and beyond, we believe CCU (and the broadcasting industry) growth could be vulnerable to slower than expected advertising growth, should consumer confidence weaken significantly--factors which could impede achievement of our price target objective.

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XM Canada Reports

April 16, 2006

Canada NewsWire
1:23 p.m. 04/16/2007

TORONTO, Apr 16, 2007 (Canada NewsWire via COMTEX) -- <<>>

Canadian Satellite Radio Holdings Inc. ("CSR"), today reported its financial results for the second quarter ended February 28, 2007 based on the achievement of 237,500 subscribers.

"We are pleased with our performance this quarter and are confirming our position as Canada's premium digital audio entertainment and information company," said John Bitove, Chairman and CEO of Canadian Satellite Radio Holdings Inc.

"We will continue to build our subscriber base through innovative partnerships such as our new agreement with Rogers Communications, which is another landmark deal for XM Canada and another first for the industry," said Bitove. "Through an aggressive team effort, we are on track to reach one million subscribers by 2010."

Financial results

For the three-month period ended February 28, 2007, XM Canada reported revenue of $4.9 million, an increase of 27 per cent over the previous quarter and a 325 per cent increase over the second quarter of 2006. This increase in revenue is due to an overall increase in subscriptions, activation fees, sale of merchandise through our direct fulfillment channel, advertising revenue on Canadian-produced channels and other revenue from partnership subscribers.

Adjusted operating loss(1) for the three-month period was $15.8 million, an improvement of $1.6 million over the second quarter of 2006. Adjusted operating loss is expected to improve as we continue to grow our subscriber base and manage operating expenses.

For the second quarter, Average Revenue Per Unit (ARPU) was $10.90, a decrease of $1.11 from the second quarter of 2006. We incurred Subscriber Acquisition Costs (SAC) of $53 per gross addition, a decrease of $16 from our second quarter of 2006. Cost Per Gross Addition (CPGA) was $207, an increase of $13 over our second quarter of 2006.

ARPU and SAC decreased from the second quarter of 2006 due to our fiscal 2007 holiday promotion, which included service credits and hardware rebates that have been amortized over the term of the subscriber payment plan and were accounted for against revenue, as well as the introduction of multi-year plans during the summer of 2006. SAC was improved by an increase in the subscriber additions through our automotive partnerships. CPGA increased as a result of our first full holiday season marketing campaign.

4/16/2007 02:14:00 PM

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How To Get Satellite Radio On Your Cell Phone

New SelectRadio(R) Software First to Bring Sirius and XM Radio Channels Together on Mobile Phones
New Version Also Expands Business Content Choices with StreetIQ.com's Top Ranked Podcasts From Business Week, CNN, CNBC, Harvard Business Review, MSNBC, Time, Wharton and Others
LAS VEGAS--(BUSINESS WIRE), Apr. 16

Today, a new version of SelectRadio software was introduced that lets users enjoy more than 160 channels of Sirius and XM Radio virtually anywhere, anytime with their Windows Mobile wireless handheld phone or PDA. SelectRadio software users can also see "what's playing" on any of the available satellite radio channels and set up the patent-pending HyperScan(TM) feature to automatically seek or skip artists to match their personal tastes...read more: here

4/16/2007 12:28:00 PM

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CNET Comments On Merger

Is Uncle Sam serious about Sirius-XM?
By Randolph J. May, CNET, Apr 16 0

Congress has scheduled another hearing, for April 17, on the proposed merger between Sirius Satellite Radio and XM Satellite Radio. Like all significant mergers, this one deserves scrutiny by the antitrust and regulatory authorities.
Congress legitimately has an oversight role as well.
But keep a keen eye: the way in which this merger is handled will tell much about whether our government officials grasp how dramatically communications and information-services markets are changing.
I am concerned that the Department of Justice antitrust officials and the Federal Communications Commission regulators charged with reviewing the merger do not adopt an unduly narrow view of marketplace competition.
A narrow view might lead them not only to reject the merger, but to maintain in place outdated regulations that have the effect of chilling innovation and stifling investment.
More about that in a moment, but first a few vital statistics about Sirius and XM. Together they offer about 300 channels of music, sports, talk, entertainment, traffic and weather, and other informational programming, many of them commercial-free.
The two operators currently have approximately 14 million subscribers. Despite having paid the government $170 million at auction to purchase the spectrum used to deliver their programming, and having invested billions since in facilities, programming and marketing, neither Sirius nor XM ever has turned a profit in five years of operation...read more: here

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Clear Channel (The Little Guys) Outlines Merger Opposition

Clear Channel outlines merger opposition to FCC Commissioner
via www.orbitcast.com, Apr 16

Clear Channel (CCU), by far one of the largest radio broadcasters in the country, has sent FCC Commissioner Deborah Tate several follow up responses from her meeting with the TAB.
According to the ex parte communication, Commissioner Tate questioned how Clear Channel can recognize and cite competition from other audio sources (iPods, Internet Radio, etc) as a reason for relaxing consolidation rules - while at the same time call the Sirius-XM merger a monopoly.
Conveniently, Clear Channel Vice President Thomas English gives three separate answers to this question. Here's a quick summary of his positions:
A combined Sirius-XM would "distort" the marketplace because it would concentrate the spectrum, while local radio ownership rules would unfairly restrict terrestrial.
How could free radio survive? Sirius-XM would have 100% spectrum, and local broadcasters can't compete against that.
Free radio serves the public interest, and he opposes anything that would affect that regardless of how the market is defined.
It's funny to see Clear Channel actually positioning itself as "the little guy" in this endeavor, promoting "local radio" or claiming that free radio would have "trouble" surviving. Truly amusing. Especially on the heals of Clear Channel partnering with Google for ad distribution across 675 of its radio stations, and the industry as a whole pulls in over $20 billion (that's with a "b") a year...read more: here

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Wall St Journal: Hard To Find Replacement For Imus

Finding a Replacement For Imus Won't Be Easy
By SARAH MCBRIDE and BRIAN STEINBERG, WSJ, April 16, 2007

The demise of disgraced radio host Don Imus would appear to create a prime opportunity for some other eager talent to rise up and claim his microphone. But in the troubled radio industry, finding popular new voices to fill the airwaves -- and attract advertisers in multiple markets -- has become a tough challenge.
CBS Corp.'s CBS Radio, where Mr. Imus was based before his firing last week, was already struggling to fill the void left by Howard Stern, the controversial host who left last year for a lucrative new gig at Sirius Satellite Radio Inc. Even with more than a year to prepare for Mr. Stern's departure, CBS's attempts to develop hit shows in his old time slot have fallen so flat that some of his replacements have already been replaced.
Host Howard Stern left a void at CBS Radio.
Meanwhile, the airwaves are filled with hosts who have made outrageous comments; paid for them with suspensions or firings; and then returned after a suitable cooling-off period.
Take Bob Lonsberry, a Rochester, N.Y.-based host who in 2003 compared the city's African-American mayor to a monkey and an orangutan. Station manager Clear Channel quickly fired him. But after months of lackluster ratings, the company thought better of the move and brought him back. In 2005, New York morning show host Miss Jones landed a suspension after airing a song mocking tsunami victims, but was soon back in her perch at her Emmis Communications Corp.-owned station....read more: here

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Clear Channel And Google Team Up

Google, Clear Channel Ink Long-Term Deal
Apr 16, 12:08 AM (ET) By JULIANA BARBASSA (AP)

Google Inc. (GOOG) (GOOG) and Clear Channel Communications Inc. (CCU) (CCU) announced a long-term agreement Sunday that will allow the Internet search leader to place advertising for its online customers on more than 675 Clear Channel radio stations.
"This radio partnership with Clear Channel is a pretty big statement that Google is in the radio industry to stay and have a big impact," said Drew Hilles, Google Audio's national sales director.
The agreement will give Google advertisers that had not relied on radio direct access to Clear Channel's national distribution system through an easy-to-use interface, Hilles said.
It will also allow those customers to target their campaigns, reaching particular audiences in targeted locations at specific times, and to get quick feedback about their campaigns, he said.
"This is a true win-win," John Hogan, chief executive of Clear Channel's radio division, said in a statement. "Clear Channel Radio gets access to an entirely new group of advertisers within a new and complementary sales channel, and Google adds another option for its existing customers."...read more: here

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Press Clipping For Hearings: Wi-Fi iPod, More Competition For Satellite Radio

Apple To Launch Wi-Fi iPod?
via.www.playfuls.com, Apr 15

The rumor mill about Apple’s intentions has started again as DigiTimes reports that Apple may launch a WiFi iPod later this year. DigiTimes is quoting Taiwan portable music player component makers, who said that USI will produce WiFi modules for iPod and Foxconn wil be the OEM system assembler. Apple’s latest gadget, iPhone, has a built-in WiFi (802.11b/g).
The WiFi enabled MP3 players seems to be the latest trend. The first MP3 player with WiFi capabilities was Zune, the Microsoft’s iPod killer, which was unveiled last year. Still the WiFi capabilities of Zune are intended for different use. Using WiFi Zune’s users may share songs between them. The songs have copy protection functions, preventing the recipient of the song to copy the song more than three times. If the gadget is connected to the PC the software enables the user to find the song on the Zune music portal where it can be...read more: here

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NAB Lobbys Congress Via New Reports

April 13, 2007

The NAB is on the pace of creating a new report every two weeks it seems. After previous reports and lobbying efforts, this one almost went under the radar, and was not accompanied by as much fanfare as the first reports. Whether this is a change in strategy or not is unknown, but the reports are now available to view.

The first report is the Napoli Report authored by Philip M. Napoli.

Napoli takes stances that by now will be familiar to SSG readers.

He first tries to define the competitive landscape

He then addresses three components of the marketplace....specifically the "Upstream Content Market", The "Downstream Content Market", and the "Audience Market"

In his position, he defines the "Upsteream Content Market" as the buyers of national content such as Sirius and XM. He states that if a merger were allowed that Sirius and XM would have a monopoly and thus the content providers and talent would have less negotiating power. the framework of his statements sound plausible, but they rely on the reader to ignore several key items:

1. National Talent is not exclusive to XM. For the Napoli stance to hold water, readers would have to believe that simulcasting on terrestrial radio does not exist, and talent such as Rush Limbaugh, Michael savage, Sean Hannity, etc. are not broadcast on terrestrial radio.

2. Readers would also have to set aside the fact that many radio groups exist in several markets, and in fact, many act as a "cooperative" by allowing other networks to broadcast a feed of a particular show.

3. The reader also has to virtually ignore what radio is mostly made up of.......music channels. I can assure you that "Let It Be" by the Beatles is the same on terrestrial, I-Pods, internet or satellite.

Napoli then discusses the "Downstream Content Market" where the sellers are providers such ass Sirius and XM, and consumers are the buyers. Napoli wants this segment to carry a narrow definition to support his stance. Her feels that the competitive landscape should be limited to services that are mobile. He also feels that satellite radio differs from other mobile service in many ways, and that these other mobile services are not substitutable, but rather complimentary from satellite radio.

Well, this is interesting. How much is new here. It is obvious by even a casual observer that the method of delivery differs between the various services. It also stands to reason that consumers will utilize more than one type of service or more than one delivery method. This also seems to be the first time that complimentary has been added into the stance by the NAB. It seems that perhaps they are getting a bit closer to the word competition.

Napoli then gets to the "Audience Market" where he calls the audience the advertisers that buy ads on radio. Napoli insinuates that there is very little competition between terrestrial radio and satellite radio on this front. How he arrives at this conclusion is interesting. He states that satellite gets most of it's revenue from subscriptions, and terrestrial gets most of its revenue from advertising dollars. HMMMM.....That is part of the point of satellite radio. Consumers can choose a free service and get advertising, or a subscription service and have less advertising. further, there was a substantial dent in ad revenue for terrestrial radio when Howard Stern left for Sirius. Mel Karmazin has stated that he is working towards ad revenue being 10% of overall revenue. At $1,000,000,000 of revenue, that would mean $100,000,000 from advertising. That is a substantial amount of money, and believe me when I say that both terrestrial and satellite compete every day for ad dollars.

All told, the Napoli report is well written, but once again, it is a document written to support a specific side of the issue. This is obvious as you read through the report. The reader has to ignore many aspects of the sector that we already know exist. The reader has to ignore the $200,000,000 in revenue terrestrial radio collected for the internet side of their business in 2006. The reader has to ignore that there are radio companies that own stations across the country. The reader has to ignore the fact that terrestrial radio carries many shows with a national presence.

The second piece from the NAB this week came in the form of a letter from James C. Miller III. In which he categorizes the proposed merger as a "Two-Down-To-One" situation. Again, this is something that has been floated by the NAB since the beginning, and again, it requires the reader to suspend the belief that terrestrial radio, cell phones, internet radio, and I-Pods are not competing for the ears of the consumer. All one has to do is boil this down to the roots of the issue, and you arrive that all of these types of companies carry a common goal.......Have consumers listen to content provided by their company.

This merger has many facets to consider, and many debates and arguments to hear. In the end, it is the mission of the DOJ and FCC to consider all sides and render a decision. If you are a reader of SSG I highly suggest that you let your opinions be known as well. readers can click on the banner ad to the right and voice their opinion.

Labels: merger, miller, nab, napoli, sirius, xm

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A Guide To Making FCC Comments

April 13, 2007

A Guide For Filing Comments with the FCC

The Sirius and XM merger is a hot topic, and there is a lot of passion involved with investors as well as consumers. While being passionate about something is good, do not let that passion dictate how you communicate with the FCC.

BE POLITE AND COURTIOUS

The FCC is made up of people just like you and I. However, being a government agency, and having to deal with the public over the phone and net can be very frustrating. Your communication to the FCC should be formatted in a manner that shows that you can have an intelligent and valid opinion. Remember, your opinion will be one of many, and there are some powerful groups that may oppose your opinion. You will never lose points for being polite, but being rude can easily set the tone for how your comment is read and received.

DO NOT ASSUME

Do not assume that the FCC knows or understands what you are speaking about. Acronyms should be spelled out into the words that are associated with the letters, and it is better to keep the comment easy to understand. Technical jargon my come across as a foreign language, and getting into specific terms and areas may lose your audience. The best message is one that can be understood by the largest amount of people. Also, do not assume that the FCC shares your passion, or has even experienced satellite radio.

BE DESCRIPTIVE

Outline your thoughts with descriptions that illustrate your point. A point with a well thought out description carries more weight. Your descriptions should be simple to understand, and presented such that they get the point across in a sentence or two. Remember, the people reading your comments may have never experienced satellite radio. If you speak about a stream or a channel it does not hurt to put the word “station” into parentheses so they know what you are talking about.

ACCENTUATE THE POSITIVE SIDE OF YOUR OPINION

People tend to be more receptive to a positive message. By example, with the issue of abortion, there are two sides. Both sides put forth a positive connotation regarding their stance. There are PRO-LIFE and PRO-CHOICE. Notice that the group that opposes abortion does not label itself as ANTI-ABORTION and the group that is for abortion does not label itself as PRO-ABORTION.

LET THEM KNOW YOUR STORY

This is YOUR COMMENT. Do not generalize to the point that you seem to be speaking for everyone. You are a person with an opinion and a story. Do not fall into the trap of speaking for everyone. In general, no one likes to have someone speak for them, so why should you pretend that you can speak for everyone. You can offer a broader opinion, but be sure that YOUR STORY is included. Let the FCC know who you are. It makes you a “REAL PERSON” with a “REAL OPINION”. For example, something like, “As A Full Time Insurance Salesman I find myself driving at least 2 hours a day……” This gives your opinion a personality.

BE CONCISE

Do not ramble on and on. Your opinion should convey your point throughout the piece. Introduce your opinion, provide background, and provide a conclusion. Keep it simple.

READ OTHER COMMENTS

By reading other comments that have already been made, you may garner an aspect of the issue that you have not yet considered. It also gives you an idea of the sentiment and types of comments that are being received. It is always good to know as much as possible prior to taking action.

WRITE – PROOFREAD – PROOFREAD AGAIN – SUBMIT

Write down your thoughts. Then proofread what you have written. Then proofread it again. Many times I myself fail to proof things that I have written, and it never shines well. Sometimes it is because I am in a hurry, sometimes I am just tired, but with an FCC comment you have time to take these important steps. This will be YOUR OPINION. Make sure that the point you are making is the focus, and not a spelling error or grammar error.

MAKE YOUR COMMENTS SEVERAL WAYS

The FCC allows comments over the web, as well as via letters and fax. Use all three to get your comment heard. While it may seem old fashioned, a hand written and mailed letter is very effective. It shows that in this day and age of instant gratification that you stopped and took the time to outline your thoughts and mail them.

MAKE SURE TO REFERECE WHAT YOU ARE COMMENTING ABOUT

All too often people will write a comment and fail to clearly illustrate what they are commenting about. For the Sirius XM Merger the Proceeding is “07-57” or MB Docket #07-57. Identify this number and include “Proposed Sirius and XM Merger” at the top of the page.

Readers can comment via the web HERE (remember to use Proceeding 07-57

Readers can view the status of the merger application, and other comments HERE

Labels: fcc comments

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Bear Stearns Note

April 13, 2007

Peck noted the following after the DOJ second request and the Imus situation:

Report excerpts:

DOJ Second Request as Expected; Imus in Play?

Bear Stearns - 13 April 2007

· Second Request, as Expected.

XM and Sirius disclosed that they had received the "Second Request" from the Department of Justice. While this request for additional information was expected, the DOJ/FTC exercise significant restraint in issuing second requests. Between 1998 and 2005, according to the "Announcement of Federal Trade Commission Chairman Deborah Platt Majoras On Reforms to the Merger Review Process" dated February 16, 2006, the agencies issued second requests at an annual rate of between 2% and 4.1% of the total number of reportable transactions. From 1998 to 2005, the annual percentage of second request investigations by the FTC that resulted in some type of enforcement action (that includes transactions that resulted in consent decree or restructuring as well as a very small percentage that were challenged) ranged from 44% to 78%.
· Imus on Satellite Radio?

Business Week reported that CBS fired Don Imus after some of his recent comments raised a furor. Time Magazine once named Imus, who was aired on 61 radio stations, as one of the 25 Most Influential People in America, and he was a member of the National Broadcaster Hall of Fame. We think satellite radio is one of the options that would be available to Imus.

· Compensation May be Limited.

We think that the compensation levels for Imus may be significantly smaller than Stern's. The Business Week report stated that Imus contributed about $15 million in annual revenues to CBS. Howard Stern, on the other hand, accounted for an estimated $95 million in annual revenues and about $50 million in EBITDA. While Stern was paid the equivalent of 5x Revenue contribution for the 5-year contract, we believe he got a premium because (i) he could "make or break" the business model, and (ii) the economic/competitive environment was different then.

Labels: bear stearns, doj, imus, merger, sirius, xm

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Goldman Issues Report On Satellite Radio

April 13, 2007

Mark Wienkes of Goldman Sachs issued a report regarding the satellite radio sector.

Report Excerpts:

Slowing gross adds...growing churn.

We are lowering our 2007 subscriber estimates below company targets for Sirius owing to continued slower subscriber growth as retail demand weakens. Industry net additions first fell n a year-over-year basis in second-quarter 2006 and accelerated through the balance of 2006. We expect the full year 2007 net additions to decline again versus 2006 for both operators. Our estimates contemplate greater gross OEM net additions year over year versus fewer retail net adds set against a backdrop of increasing churn.

Valuations likely to remain under pressure.

Satellite radio fundamentals remain challenged and, in our view, will face speed bumps near term before entering a two- to three-year OEM-driven window of opportunity to solidify a position in consumer-supported media. With consensus forecasts still too high and merger uncertainty, we think XM’s and Sirius’ stock price will remain under pressure with increased risk to the downside - especially as many large investors sit out the binary merger situation.

Uncertainty of merger benefits and approval.

As we have stated, merging platforms could deliver significant operational, financial, and strategic benefits, but remains unlikely to pass muster with the FCC, DOJ, and investors under current conditions. Further, we question how much of the cited pro consumer benefits cannot be attained by simply playing nice.

Investment recomendations.

We still prefer XM as the better investment in the satellite radio space given its OEM alignment and lower cost structure set against a discount valuation relative to Sirius. That said, with a fixed exchange ratio tied to SIRI, we are not optimistic that the shares will appreciate, given our belief Sirius' fundamentals will deteriorate and disappoint in 2007 as XM’s did in 2006, with net add growth set to fall and churn rise.

Lowering price targets for XMSR and SIRI. Our 12-month price targets are now $12.75 for XMSR (Neutral), from $14, and $2.50 for SIRI (Sell), from $2.75.

Labels: goldman sachs, merger, sirius, xm

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Marketwatch: Satellite Radio Could Get A Lift From Imus Firing

April 13, via www.marketwatch.com

"Shares in XM and Sirius could get a lift from CBS Corp.'s announcement that it's canceled Don Imus' show in the wake of the talk show host's racially-charged remarks about the Rutger University women's basketball team"...read more: here

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Overstock.com Libel Suit: Could Have A Serious Chilling Effect On Organizations That Provide Financial Opinions

No, this is not an overstock.com blog, but I am keeping an eye on their libel suit, and how it affects short sellers who manipulate the financial press.

Court's OK Likely in Overstock.com Stock Libel SuitBy Mike McKee,The Recorder, 04-12-2007, via www.law.com


All that the attorneys for Overstock.com Inc. want at this point is a trial on the company's libel claims. And a trial it seems they'll get.

During 75 minutes of oral arguments Tuesday, San Francisco's 1st District Court of Appeal seemed ready to let the online retailer get a full airing on its claims that a financial analysis company and a hedge fund conspired to put it out of business.

"We're at the pleading stage," Justice Maria Rivera told the defendants' lawyers. "It's not time yet to decide all these various levels [of legal issues], because the evidence we have is basically skeletal."

Justice Ignazio Ruvolo indicated there was evidence even "at this stage of the proceedings" that could substantiate Overstock.com's claims.

Salt Lake City-based Overstock.com filed suit in 2005, accusing Gradient Analytics Inc. of conspiring with the analyst's client, Rocker Partners, to drive down Overstock.com's stock with reports based on false information.

Overstock.com contends that New Jersey-based Rocker convinced Arizona-based Gradient to give Overstock.com an "F" rating by, among other things, claiming that company executives had falsified accounting statements. The suit accuses Rocker of trying to profit from the short selling of Overstock.com stock.

The case has Wall Street's rapt attention. Financial journalists and stock analysts have argued in amici curiae briefs that a victory for Overstock.com could have a serious chilling effect on organizations that provide financial opinions...read more: here

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CNET On Cramer & Short Sellers: "financial press is easily duped by short sellers and hedge funds"

Overstock CEO reflects on Cramer debacle
By Greg Sandoval, CNET.com

Patrick Byrne, CEO of Overstock.com and one of the Internet's most controversial figures since alleging that hedge fund managers conspire with journalists to manipulate the stock market, has been receiving support recently from some surprising corners.
Bloomberg News aired a report on March 13 (which is also available on YouTube) that seems to back up many of the allegations Byrne has made over the past two years. Then there are the startling comments from James Cramer, the hedge fund manager-turned-host of the popular CNBC television show Mad Money.
During an interview for TheStreet.com in December, Cramer offered a primer on how hedge funds cheat the stock market. In the video, which surfaced last week on YouTube and has since been removed at the request of TheStreet.com, Cramer claimed the financial press is easily duped by short sellers and hedge funds and that federal regulators aren't smart enough to stop it.
Were Cramer's statements the smoking gun Byrne's supporters have been waiting for? He's not so sure.
"The (Securities and Exchange Commission) works for Wall Street," Byrne said in an interview last week. "It doesn't work for Main Street. On a good day, the SEC is up to taking on Martha Stewart over a $60,000 issue. They are not up to taking on Jim Cramer and half a dozen powerful hedge funds."
Byrne sparked controversy in August 2005 by accusing a number of investment bankers, financial journalists and hedge fund managers of collaborating to ruin the reputations of companies to profit when their stock prices tumbled. Byrne claimed that his online store was victimized by such a scheme. In a now infamous 2005 conference call, he said the conspiracy was overseen by a mastermind he compared to a "Sith Lord" out of the Star Wars movies.
Byrne's detractors accused him of trying to divert attention away from his company's poor financial performance. In 2005, Salt Lake City-based Overstock reported a $25 million loss. The company's share price, which hit $77 in 2004, closed trading on Tuesday at $17.29.
Salt Lake City, Utah-based Overstock in 2005 filed suit against Rocker Partners, a short-selling hedge fund, and Gradient Analytics, a research firm. He accused them of conspiring to manipulate Overstock's share price. The SEC opened an investigation into the companies but dropped the probe last month without taking any action. But Byrne hasn't given up. Overstock last month filed a $3.4 billion suit against 12 brokerage firms....read more: here

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NY Times On Imus: It's Possbile That He Could Emerge On Satellite Radio

Off the Air: The Light Goes Out for Don Imus
By BILL CARTER and JACQUES STEINBERG, The New York Times, Apr 13

CBS brought a weeklong confrontation over a racial and sexual insult by the radio host Don Imus to an end yesterday when it canceled the “Imus in the Morning” program, effective immediately.
The move came a day after the cable television network MSNBC, a General Electric unit that has simulcast Mr. Imus’s radio program for the last 10 years, removed the show from its morning lineup. The two moves, taken together, mean that Mr. Imus, who has been broadcasting the program for more than 30 years, no longer has a home on either national radio or television.
It is possible, though, that he could re-emerge on satellite radio.
Mr. Imus received the news at home in a telephone call. Many of his listeners learned of it during the afternoon radio show “Mike and the Mad Dog,” which announced it on WFAN, the CBS-owned New York station that also carried Mr. Imus’s program.
The CBS chief executive, Leslie Moonves, met yesterday afternoon with the Rev. Al Sharpton and the Rev. Jesse Jackson, leaders in what became a national movement to remove Mr. Imus from the air in the wake of his comments disparaging members of the Rutgers women’s basketball team. On April 4, Mr. Imus referred on the air to the Rutgers athletes as “nappy-headed hos.”...read more: here

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Dodging Bullets: thestreet.com Negative On Sirius

Bad Reception for Sirius
By Frank CurzioRealMoney.com Contributor 4/12/2007 1:25 PM

Editor's Note: This Stocks Under $10 alert was originally sent to subscribers April 12 at 12:14 p.m. EDT. It's being republished as a bonus for TheStreet.com and RealMoney.com readers.

Sirius Satellite Radio (SIRI) is arguably one of the most popular companies in the Stocks Under $10 universe. We last wrote about the company in December and have been negative on the stock for sometime. With shares now trading down at our $3 target price, it's time to revisit Sirius -- to see if the stock offers any long-term potential for investors.
When we first wrote about Sirius, our thesis was that its subscriber estimates were too aggressive and that satellite radio was no longer the "must have" product for consumers. We still believe the future is cloudy in this regard; however, the playing field has changed.
On Feb. 19, Sirius and XM Satellite Radio (XMSR) agreed to merge in a deal that would create one giant satellite radio company with roughly 14 million subscribers. If the deal is approved, the merged entity would create cost synergies and reach profitability much more quickly than XM or Sirius would independently.
However, there is some concern that the Federal Communications Commission could rule against the merger -- given that Sirius and XM are the only two companies that have been granted satellite-radio licenses. The Justice Department also would have to sign off on the deal. These hurdles have caused Sirius' share price to fall to a 52-week low of $3.07, with shares recently trading at $3.10...read more: here

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Fourth Capitol Hill Hearing Scheduled

Fourth Capitol Hill hearing on Sirius-XM merger scheduled

via www.orbitcast.com

The U.S. Senate Committee on Commerce, Science and Transportation will be holding a hearing on the Sirius-XM merger.

With the intriguing title of "XM Sirius" the hearing is scheduled for Tuesday, April 17, 2007 at 10am in room SR - 253. A webcast of the hearing will be announced soon.
No witnesses are available yet, but this is listed as a "Full Committee" hearing. The committee is chaired by Sen. Daniel K. Inouye (D-HI), with Sen. Ted Stevens (R-AK) being the Vice Chairman. Committee members includes Sen. John F. Kerry (D-MA) and Sen. John McCain (R-AZ) among others.
This will be the fourth Capitol Hill hearing on the Sirius-XM merger.
[XM Sirius Hearing] ..read more: here

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The Imus Effect

April 12, 2007

The Imus Effect

With Don imus now fired, it seems appropriate to speak about what the impact will be. The Imus effect is not about listeners and subscribers…..Rather it is about a programming vacuum, radio personality conduct, and advertising dollars.

With the departure of Imus, terrestrial radio is now short a morning talk show host. Not the end of the world, but this comes on the heels of Stern making a move to satellite.

In the span of a bit over a year, terrestrial radio has lost two long time staples. Even 1 year after Sterns departure, radio stations are posting ratings substantially lower than when Stern was on the air. CBS had hired David Lee Roth to replace stern in many markets, and wound up pulling his show very quickly. CBS still carries Roth on the payroll.

When Stern left terrestrial radio, and influx of listeners as well as advertising dollars gravitated to satellite. With Imus now off the airwaves, what will happen to those advertising dollars that he used to command? Likely much of it will stay with terrestrial, but some will also find its way to the internet and satellite as well.

Will Roth get a second chance in the Imus slot? That is a feasible option. His show did not hold onto Stern fans, but how would it do with former Imus fans? At first blush, it may not seem like a match, but Roth is versatile, and he could potentially pull off a show…..even if only while a search for a new host happens. He is already on the payroll, and there is a need to fill a gap in the programming.

The other facet of this boils down to the conduct of radio personalities. What can and can’t be said on radio? Does it apply to terrestrial as well as satellite? How do we know if someone has gone to far? These are questions that many will be thinking about in this industry.

In the end, it will be interesting to watch how all of this plays out. Will CBS keep Imus on the payroll to avoid having him move to a new company, or medium. In my opinion this seems likely.

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Clarification on DOJ Second request

April 12, 2007

There seems to be a lot of confusion and assumptions being made about the DOJ second request.

What is happening here is very typical.

The DOJ has a 30 window in which to comment. If the DOJ does not comment, the merger can proceed. The second request is a typical happening when the DOJ is still in an in depth review.

Larger transactions, or transactions that have more information to process will typically be extended beyond the thirty days via a second request.

It is also typical that a second request will come with requests for additional information. This request enables the DOJ to come to a more informed decision.

Investors should not read anything special into this request. It is simply how the process works

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DOJ Requests More Info On Sirius+XM Merger

XM gets DOJ request for Sirius merger info
LOS ANGELES, April 12 (Reuters)

XM Satellite Radio Holdings Inc. (XMSR.O: Quote, Profile , Research) and Sirius Satellite Radio Inc. (SIRI.O: Quote, Profile , Research) said on Thursday they received a request from the U.S. Department of Justice for additional information regarding their proposed merger.
U.S. antitrust authorities issue such a request if an initial review turns up potential antitrust problems. It requires the companies to turn up large amounts of information and is followed by a more in-depth investigation.
A spokeswoman for the Justice Department was not immediately available for comment. However, the department typically does not comment on merger investigations.

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CBS Cans Imus

CBS cancels Don Imus radio show
NEW YORK, April 12 (Reuters)

CBS Corp. (CBS.N: Quote, Profile , Research) said on Thursday it will permanently cancel Don Imus' morning radio talk program, bowing to public and financial pressure over the shock jock's racist and sexist comments.
"From the outset, I believe all of us have been deeply upset and revulsed by the statements that were made on our air about the young women who represented Rutgers University in the NCAA Women's Basketball Championship with such class, energy and talent," CBS President and Chief Executive Officer Leslie Moonves said in a statement.
CBS said the cancellation of "Imus in the Morning" is effective immediately. The move comes a day after NBC Universal pulled its MSNBC simulcast of the show...read more: here

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Imus Radiothon Continues

April 12, 2007

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Imus Canned By MSNBC

April 11, 2007

Radio Talk Show Host Don Imus used to have his morning radio show simulcast on MSNBC. That will no longer be the situation. Amidst sponsors pulling out of the show, the television network has pulled the plug on Imus.

Imus has been suspended for 2 weeks for racial comments made on his show. The situation, which was already bad seemed to get exacerbated each time Imus spoke about the issue.

Many are now wondering if Imus' suspension will be permanent, and there is speculation that he could find a home on satellite. It is my opinion that given the lightning rod that Imus is right now, and the fact that Sirius and XM are in the midst of a merger, that neither Sirius nor XM would be very quick to pull the trigger. Secondly, CBS could simply remove him from the air and continue to pay out his contract, thereby keeping him off the open market.

Sponsors that have taken action so far include General Motors and Sprint Nextel.

"Effective immediately, MSNBC will no longer simulcast the 'Imus in the Morning' radio program," NBC Universal said in a statement. "Once again, we apologize to the women of the Rutgers basketball team and to our viewers. We deeply regret the pain this incident has caused."

The landscape in broadcasting never has a dull moment

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Clayton Gifts Shares

April 11, 2007

Sirius filed Form 4 with the SEC today regarding a stock transaction by Joe Clayton.

Clayton gifted 225,000 shares.

He still holds:

3,550,785 shares directly
10,000 shares by partnership
15,000 shares by trust

UPDATE: Clayton Gifted the shares. These shares were not gifted to Clayton.

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Washington Post Picks Up TMF Report

Opinions Rise on XM-Sirius Plan
By Sam Diaz Washington Post Staff Writer Wednesday, April 11, 2007;

Industry experts and consumers are starting to chime in on the proposed merger of the nation's two satellite radio companies, using research studies to try to sway opinion in Washington, where Congress will hold another hearing on the matter next week.
One of the studies -- by research firm Carmel Group hired by the National Association of Broadcasters and released last week -- said a merger would harm consumers, citing the potential for higher prices and less content. But late Monday, an independent report by TMF Associates, another research firm, blasted that study, referring to some of its arguments as "ludicrous."...read more: here

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XM Executive Compensation Outlined

April 10, 2007

XM Satellite Radio filed an 8K with the SEC today outling details in executive compensation:

Filing Excerpts:

As previously disclosed, on February 19, 2007, we executed an Agreement and Plan of Merger with Sirius Satellite Radio Inc., under which our company would be combined with that of Sirius, subject to various closing conditions, including shareholder approval and certain regulatory and antitrust approvals. Pursuant to the terms of the merger agreement, it was contemplated that our Compensation Committee would take action with respect to establishing or approving various severance and retention arrangements for our employees, including our executive officers. Our Compensation Committee has approved amendments to the employment agreements of our CEO, our Chairman and our President and Chief Operating Officer and severance agreements for our other executive officers. The discussion below describes the terms of the amendments and severance agreements, copies of which are also being filed with this report.

Amendments to Employment Agreements

Chairman. Effective April 4, 2007, we entered into an amendment to the employment agreement of Gary Parsons, our Chairman, to, among other things, extend the term of the agreement to March 31, 2008 and provide for: an increase in base salary from $475,000 to $525,000 for the period from August 6, 2007 through March 31, 2008; the bonus component of severance to be based upon target bonus; payment of the severance amount as a lump sum; and trading restrictions on all restricted shares and options to lapse after termination without cause or resignation for good reason within one year following a change of control.

Chief Executive Officer. Effective April 4, 2007, we entered into an amendment to the employment agreement of Hugh Panero, our Chief Executive Officer, to, among other things, extend the term of the agreement to March 31, 2008 and provide for: an increase in base salary from $650,000 to $700,000 for the period from April 4, 2007 through March 31, 2008; payment of the severance amount as a lump sum; the severance amount to equal three times the sum of base salary and target bonus for year of termination and to be paid if the Company and Mr. Panero mutually agree to terminate his employment prior to March 31, 2008 or if Mr. Panero is terminated without cause or resigns for good reason; the bonus component of severance to be based upon target bonus; all options and restricted stock to vest immediately if Mr. Panero is terminated without cause or by mutual agreement or resigns for good reason other than restricted stock grants made in 2007, which would vest on completion of the consulting services referred to below, with all options to remain exercisable for 18 months and all trading restrictions on restricted shares and options to lapse; the definition of “change in control” to include shareholder approval of a merger in which XM voting securities would constitute less than 60% of the voting securities of the post-merger company; extension of the post-termination benefits continuation period from two to five years with annual payments of the value of such benefits in lump sum; agreement by Mr. Panero to perform part-time consulting services for us if his employment terminates prior to the earlier of March 31, 2008 and consummation of a merger with Sirius Satellite Radio under the February 19, 2007 merger agreement; and a gross-up payment to be made to Mr. Panero to the extent of penalties imposed by Section 409A of the Internal Revenue Code.

President and Chief Operating Officer. Effective April 4, 2007, we entered into an amendment to the employment agreement of Nathaniel Davis, our President and COO, to provide for: the bonus component of severance to be based upon target bonus; payment of the severance amount as a lump sum; and all trading restrictions on restricted shares and options to lapse after termination without cause or resignation for good reason within one year following a change of control.

Severance Agreements

We also are entering into severance agreements with each of our executive officers other than our Chairman, our CEO and our President and COO. The form of agreement provides, among other things, that if a change in control of the Company occurs and as a result the officer is either terminated or terminates his employment for good reason, the officer would receive a lump sum cash payment equal to two times the sum of the officer’s base salary and target annual bonus, a pro-rata target annual bonus in respect of the year of termination, continued health and insurance benefits for two years, outplacement services for two years and a gross-up payment to cover excise taxes.

A “change in control” occurs where

• any person or group becomes beneficial owner of securities of XM representing more than 40% of the voting power of XM;

• Board members at the beginning of a two-year period (together with new members appointed with the concurrence of at least two thirds of those members) no longer constitute two thirds of the Board during such two-year period;

• a merger/consolidation of XM occurs where the XM voting securities immediately prior to the merger/consolidation do not constitute at least 60% of the combined voting securities after the merger/consolidation; or

• the stockholders approve a plan of complete liquidation or winding-up of XM or an agreement for the sale or disposition of all or substantially all of XM’s assets.

“Good reason” means

• the assignment to the officer of any duties inconsistent with his or her status as an executive officer or a substantial adverse alteration in the officer’s title, line of reporting or nature or status of the officer’s responsibilities from those in effect immediately prior to the change in control;

• a reduction in the officer’s annual base salary;

• the relocation of the officer’s principal place of employment to a location more than 35 miles from the officer’s principal place of employment immediately prior to the change in control;

• the failure to pay any portion of the officer’s base salary or annual bonus when due;

• the failure to continue in effect any compensation plan in which the officer participates immediately prior to the change in control that is material to the officer’s compensation; or

• the failure to continue to provide the officer with benefits substantially similar to those enjoyed by the officer under any XM benefit plan in which the officer was participating immediately prior to the change in control, the taking of any other action which materially reduces any such benefits or deprives the officer of any material fringe benefit enjoyed by the officer at the time of the change in control, or the failure to provide the officer with the number of paid vacation days to which the officer is entitled on the basis of years of service in accordance with normal vacation policy in effect at the time of the change in control.

Copies of the amendments to the employment agreements and form of severance agreement are attached to this report and incorporated herein by reference. The descriptions above are summaries of the agreements and are qualified in their entirety by the complete text of the agreements.


Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.


Exhibit 10.1 Amendment No. 1 to Employment Agreement, dated as of April 4, 2007, between Gary Parsons and XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc.
Exhibit 10.2 Amendment No. 1 to Employment Agreement, dated as of April 4, 2007, between Hugh Panero and XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc.
Exhibit 10.3 Amendment No. 1 to Employment Agreement, dated as of April 4, 2007, between Nathaniel Davis and XM Satellite Radio Holdings Inc. and XM Satellite Radio Inc.
Exhibit 10.4 Form of Severance Agreement for executive officers other than Chairman, CEO and President and COO.

Labels: xm

4/10/2007 09:15:00 PM

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E! Gets Sirius

April 10, 2007

E! Entertainment Television and SIRIUS Satellite Radio Launch New Entertainment Call-In Show: 'YO On E!'

Live daily show focused on celebrities, pop culture and gossip on E! Entertainment Radio launches only on SIRIUS

NEW YORK, April 10 /PRNewswire-FirstCall/ -- SIRIUS Satellite Radio (Nasdaq: SIRI - News) and E! Entertainment Television today announced that YO on E!, a new live entertainment radio call-in show hosted by star Miami DJ Michael Yo, launched Monday, April 9th on SIRIUS' E! Entertainment Radio. Fast-paced, interactive and slightly irreverent, YO on E! broadcasts live from E!'s Los Angeles studios Monday - Friday from 4:00 - 7:00 pm ET on E! Entertainment Radio, SIRIUS channel 107, and rebroadcasts Saturday and Sunday at 11:00 am ET.

Source: SIRIUS Satellite Radio; E! Entertainment Television

Labels: e, entertainment, sirius

4/10/2007 01:10:00 PM

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Sirius Q1 2007 Conference Call Scheduled

April 10, 2007

SIRIUS Satellite Radio to Announce 1Q 2007 Financial and Operating Results on May 1

Company to Webcast Earnings Call for Investors and Media

NEW YORK, April 10 /PRNewswire-FirstCall/ -- SIRIUS Satellite Radio (Nasdaq: SIRI - News) today announced that it plans to release 1Q 2007 financial and operating results on May 1, 2007.

SIRIUS also plans to hold a conference call at 8:00 am ET to discuss these results. Investors and the press can listen to the conference call via the company's website, http://www.sirius.com, and on its satellite radio service by tuning to SIRIUS Channel 122.

Source: SIRIUS Satellite Radio

A replay of the call will be available on the company's website.

Labels: conference call, q1 2007, sirius

4/10/2007 01:07:00 PM

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TMF Looks At Competitive Landscape

April 10, 2007

TMF Assoiciates takes a look at the competitive landscape with regards to the proposed merger. I find his outlook into the sector to be in tune with the real landscape out there.

http://www.tmfassociates.com/SatRadio.pdf

What I find interesting is that those who seek a narrowly defined definition of competition need to find ways to 1) discount the status of what the various companies have on the market 2) Discount the capabilities of various devices, and 3) Discount consumer willingness to use new technology

4/10/2007 08:32:00 AM

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TMF Joins Others Who Take Issue With Carmel Report

April 10, 2007

NAB/Carmel Group White Paper Fundamentally Misinterprets the Competitive Environment for Satellite Radio, Satellite Consultant Claims

MENLO PARK, Calif., April 10 /PRNewswire/ -- The following is being issued by Telecom, Media and Finance Associates, Inc. (TMF Associates):

Telecom, Media and Finance Associates, Inc. (TMF Associates), the specialist Mobile Satellite Services (MSS) consulting firm, today released a research note on the competitive landscape for satellite radio in light of the proposed XM/Sirius merger.

This research analyzes the positions taken by Carmel Group in its recent white paper on behalf of the National Association of Broadcasters (NAB) and concludes that this white paper ludicrously overstates the case for opposing the merger of XM and Sirius and fundamentally misinterprets the competitive environment for satellite radio.

Tim Farrar, author of the note, commented, "Satellite radio is essentially a car-based audio service at