Sirius Discloses Talks With Apple on iPod With Satellite Radio

Karmazin said little about the substance of his talks with Jobs: “I spoke with Steve Jobs. That’s about as far as I'm willing to go.” But Apple’s iPod has 5,000 songs in its arsenal, Karmazin said: “They don’t need to put satellite radio in that device.”

Given that XM had a year’s head start on Sirius and already has introduced “wearable” portable receiver devices, “you can assume that in 2005, before the holiday season, we will have a wearable device,” Karmazin said. In the 80 days since becoming Sirius CEO, Karmazin said he has conversations with “all the logical people” that represent potential partners. “My opinion is that some future generation of MP3 players would have a satellite radio built in.”

Besides Sirius’s long-term programming deal with the NFL, Karmazin said the signing of Howard Stern was the “single biggest factor” that convinced him to accept the Sirius CEO post in Dec.: “It was huge.” Karmazin said he had a close personal and professional relationship with Stern, having signed him to his current Infinity Bcstg. contract. “But I don’t hang with him,” Karmazin said, adding that he last spoke with Stern just before Christmas. Karmazin said he had no hand in drafting Stern’s Sirius contract, but he had studied it since becoming CEO and concluded “I would have done it.” To critics who say Sirius overpaid for Stern’s services, Karmazin said in his career he repeatedly has been slapped with charges he has paid too much for on-air talent.

On the recurring question whether Stern would make his Sirius debut before the planned Jan. 2006 date, Karmazin said releasing Stern from his contract would be Viacom’s decision to make. As for reports Sirius was trying to lure personalities such as Oprah Winfrey and Bill and Hillary Clinton, Karmazin didn’t comment on those names but said, “You can assume we are very aggressive toward getting talent because all it’s about is the content.”

On other issues, Karmazin: (1) Said that “as an American citizen, I'm really troubled by what Congress is doing” to enforce decency. “They are way off base on what they're doing because they're forcing people to abandon anything that’s edgy. Anybody who’s close to the edge of the envelope isn’t going to want to risk falling off.” Sirius, as a subscription-based service with channel- blocking capability, isn’t in the same boat as terrestrial broadcasters when it comes to indecency enforcement, he said: “We can be on the edge of the envelope, and God forbid we fall off every once in a while.” (2) Joked that the biggest lesson he learned from serving as 2nd in command to Sumner Redstone at Viacom was: “I'm a bad number two. I need to be a number one.”

(3) Said it’s “good news” that “every single automotive company has committed to putting satellite radio in the car.” If any car maker was “on the fence” regarding satellite radio, the category’s performance during the recent holiday selling season “blew them away,” Karmazin said. Automakers take a “relatively small” portion of Sirius’s $12.95 monthly subscription fee as their cut, but the potential total dollars are “enough to make it material,” he said.

(4) Confirmed Sirius has leased retail space in the lobby of its N.Y.C. hq building. But he quashed rumors that Sirius planned to use it as a street-level studio for Howard Stern. “Howard tends not to like working with people around,” Karmazin said. Stern’s studio will be built on the building’s 36th floor, he said. Sirius plans to use the space as a retail showcase and a venue for demonstrating product and a venue for displaying car installations, he said. (5) Sirius’s battle with XM is more like a Coke-Pepsi race than a VHS-Betamax battle, Karmazin said.