Focus on: Proposed Sirius-XM merger - part three

Perhaps we at Lit Between the Ears are addled with too much Korbel Brut and Bushmills Irish Whiskey. (Original, of course.) Both of which are excellent New Year’s Eve libations.

But even a potential fog from such superb liquors cannot override the sketchy logic of a Sirius-XM merger as espoused in Eric A. Taub’s “Loaded With Personalities, Now Satellite Radio May Try a Merger” (New York Times; January 1, 2007).

Quoting Mr. David Frear, chief financial officer of Sirius, in Taub’s article, “When you have two companies in the same industry, we have a similar cost structure. Clearly, a merger makes sense from an investor’s point of view to reduce costs, and to have a better return.”

Clearly makes sense? For whom? Mr. Frear, please accept this as an introduction to Mr. Nate Davis, president of XM, whose thoughts on satellite radio’s slowing growth, in the same article, are as follows: “We did not stimulate the market with new products.”

In the realm of understatements, Mr. Davis has just secured a Nobel or Pulitzer.

Mr. Taub writes: “Yet the vast majority of programming remains duplicative.” Your award is next to that of Mr. Davis.

However, our skepticism does not end there. Cue up Mr. Craig Moffett, senior cable analyst at Sanford C. Bernstein and quoted in the same article. What is your assessment of Sirius and XM, Mr. Moffett?

“There is a tendency to view satellite radio as if the glass is half empty, and that it is a failure or disappointment. In fact, nothing could be further from the truth. Satellite radio is growing faster than any consumer product except for the iPod.”

How about a couple of data points Messrs. Taub and Moffet. What’s your baseline? What’s your time sequence? Furthermore, what are your data sources?

From our New Year’s Eve perspective of radio drama and the possible outlets to support the same, a proposed Sirius-XM merger has all the allure of room temperature, flat champagne.

Radio fans and radio drama professionals deserve better.

Kind regards,

William Spear
Publisher and Editor
Lit Between the Ears
http://TwoPlusPlus.wordpress.com/

President
Two Plus Plus Productions LLC
http://twoplusplus.com/

PS - Please note Mr. Frear’s thoughts on satellite radio: “Every year, satellite radio just sinks deeper and deeper into the public consciousness.” We think he could have put a period after the second “deeper.”

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Focus on: Proposed Sirius-XM merger - part two

Included in the article titled “Post-modernism is the new black - How the shape of modern retailing was both predicted and influenced by some unlikely seers,” (The Economist; December 19, 2006) mass-market retailing is discussed in an era of endless market fragments.

The article presents London retailer Selfridges & Co. as a survivor and embodiment of the chaotic and interwoven nature of modern retailing. For a century, the company offered “… order, formality and stillness …” in its stores and nearly went out of business in the process. Selfridges, and others successfully navigating new markets, have tossed out their formality of the past and are building “new huge empires based around one niche”.

Perhaps that is another part of the message for Sirius and XM. In “Focus on: Proposed Sirius-XM merger,” (Lit Between the Ears; December 27, 2006) Sirius and XM were encouraged to develop compelling and differentiating portfolios of programming before merging the two firms. As markets continue their fragmenting into smaller and smaller niches, there is an audience of existing literate and economically empowered patrons to support radio drama on Sirius and XM.

Quoting The Economist:

’In “The Long Tail”, an analysis of the impact of the internet on the music industry, with wider ramifications, Chris Anderson describes the “shattering of the mainstream into a zillion different cultural shards”. The post-modern “fragment” becomes a “niche” and the mass market is “turning into a mass of niches”. “When mass culture breaks apart,” he writes, “it doesn’t re-form into a different mass. Instead, it turns into millions of microcultures which coexist and interact in a baffling array of ways.”’

Long live The Long Tail. Long live radio drama.

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Focus on: Proposed Sirius-XM merger

Satellite radio operators Sirius and XM have been generating press for their theoretical and analytical musings of a potential merger between the companies. Subscriber growth is slowing for both firms and neither firm is currently profitable.

More puzzling is the lack of a compelling or differentiating programming portfolio between the two or even with over-the-air broadcasters.

We support more outlets for a greater variety of radio offerings. A similar approach in television has propelled the programming of HBO and other cable companies into the top echelon of entertainment companies in the U.S.

However, the proposed Sirius-XM merger would be the combination of two firms which have yet to recognize the full and unique strengths and capabilities of radio versus other entertainment media.

To the Managements of Sirius and XM, pause before merging and assess what radio does, how it may entertain and inform, and recognize that every listener is an audience of one.

Then, maximize shareholder value by maximizing the listening experiences of all your audiences of one.

Respectfully,

William Spear
President
Two Plus Plus Productions LLC
http://www.twoplusplus.com/

Editor and Publisher
Lit Between the Ears - Celebrating the Power and People of Radio Drama
http://twoplusplus.wordpress.com
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Focus on: XM Radio

XM Satellite Radio Holdings narrowed its losses when it announced smaller than expected third-quarter losses. As Seth Sutel reports (The Associated Press; Monday, November 6, 2006), the US$85.5 million loss of 32 cents a share was better than the expected 46 cents per share. Further, revenues also beat analysts’ expectations, rising 57 percent to $240.4 million, compared with estimates of $235.3 million.

 

Lit Between the Ears extends its congratulations to XM and its financial performance.

 

However, and of particular note, is Sutel’s reference to XM’s “fierce competition for listeners with Sirius Satellite Radio.” Indeed, Sirius is a potent competitor with a formidable lineup. Music and celebrities are only two of Sirius’ strengths.

 

Perhaps XM might derive a unique competitive advantage over its rival by elevating the prominence of its Sonic Theater offerings.

 

As Steve Karesh, Executive Producer, points out in his bio, “Sonic Theater - XM 163 is the coolest channel ‘because it combines the immediacy of radio, with the power of a story.’” As Karesh writes, “Radio dramas allow people to connect with stories unlike any other medium.”

 

We’d be hard-pressed to put it any better.

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Focus On: News Corporation

The following excerpted press release from News Corporation adds to the heightened general interest of wireless entertainment offerings and suggests the possibilities for radio drama.

…

News Corporation And VeriSign Announce Joint Venture To Create Leading Global Mobile Entertainment Company

News Corporation to Acquire Controlling Interest in Jamba World’s Largest Mobile Entertainment Company

LOS ANGELES, CA, and Mountain View, CA - September 12, 2006 - News Corporation (NYSE: NWS, NWS.A) and VeriSign (NASDAQ: VRSN) today announced a joint venture to form the world’s largest provider of mobile entertainment. News Corp. will pay approximately $188 million for a controlling interest in VeriSign’s wholly-owned Jamba subsidiary and will combine it with Fox Mobile Entertainment assets.

The new company will merge the most technologically advanced platform in the category with market-leading mobile content production and delivery capabilities and will serve 30 territories with a potential reach of more than a billion mobile subscribers. The new company intends to retain the Jamster brand in the U.S. and the Jamba brand worldwide.

Lucy Hood, formerly President of Fox Mobile Entertainment, will become CEO of the joint venture. With key centers in Los Angeles and Berlin, the new entity will be the industry’s only vertically integrated mobile entertainment company with unique capabilities to produce, market, sell and distribute mobile content.

“This is an important step in News Corp.’s strategy of becoming the world’s leading digital media company,” said Peter Chernin, News Corp. President and Chief Operating Officer. “We’re the most powerful media company on the web with Fox Interactive Media, our aggressive digital content deals have given consumers access to News Corp. programming on every conceivable platform and we have already demonstrated innovation in this emerging space with the Mobisode” and Mobizzo.

“Wireless technology gives us an enormous opportunity to reach billions of mobile phone users with our content. With this new venture we’re looking forward to inventing new and compelling ways to engage this exciting new audience.”

…

To the folks at News Corporation, radio drama can engage your new audience.

To colleagues within the radio drama world, engage the News Corporation. They have audiences looking for great programs.

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