XM-Sirius A La Carte Would Start By 2008 Holiday Season, Karmazin Says
A combined XM-Sirius could begin offering newly announced programming packages to owners of existing radios within six months after a merger is consummated, senior Sirius executives told analysts in a Q2 earnings call Tuesday. If the merger is approved this year, as XM and Sirius still predict it will be, the combined company could begin offering the packages by Father’s Day 2008, CEO Mel Karmazin said. XM-Sirius a la carte programming options, and the new radios needed to receive them, would become available in time for the 2008 holiday selling season, Karmazin said.
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Those predictions are important, since many commenters told the FCC they would support a merger only if the a la carte tiers and programming options would be required and introduced to the market quickly. The packages available by Father’s Day could be received by “virtually all the products that are in the field,” Jim Meyer, president of operations and sales, replied to a question. “So there’s not a risk of obsolescence for any of those.” A la carte “will take more work and will require a new radio, which will be in the market to support the Christmas selling season of next year,” Meyer said. “That said, if the merger goes through, I'm very positive that we will very, very aggressively go after an integrated chipset” that would at long last make possible the first interoperable XM-Sirius receivers, Meyer said. It would take one to 2-1/2 years after the merger to develop such a chipset, depending on “what features we decided to put in it,” he said. “We won’t be able to begin that work until it’s clear that the merger’s approved,” Meyer said.
The Justice Department’s second request for documents on the proposed merger sought “substantial amounts of information” from XM and Sirius, Karmazin said. “I can’t tell you how many gigabytes of data that we sent. Since most of our stuff was electronic, I think we paid a little bit over a million dollars just for photocopying.” The department’s two main areas of interest were defining the market for satellite radio and determining how the “efficiencies” of a merger would serve the public good, Karmazin said. XM and Sirius hope to complete their document submissions before fall, he said.
Other disclosures: (1) Sirius is on track to surpass 8 million subscribers by year-end, despite “seasonally slow” sales expected in Q3, the company said. (2) The company is on pace to record $1 billion in revenue for the year.