Sirius XM Radio to offer the best of both services (sort of); Karmazin predicts success

UPDATED: Mel Karmazin, the former Sirius chief executive who now heads the merged company, was a busy man today, appearing not only with Opie & Anthony but with Howard Stern and on CNBC. He told the business news channel that "the prospects for the combined company are extraordinary," and predicted $400 million in cost savings and positive cash flow by 2009. According to Stern's website (look under "Wednesday's show"), Karmazin said the question now was not if satellite radio will make money, but how much. He also said the government approval process was "dreadful." Given that Stern's show, like the rest of satellite radio, is not subject to federal indecency standards, Karmazin could have used a lot of other words.

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There's been so much attention focused over the past 17 months about whether Sirius and XM satellite radio would be allowed to merge, that what exactly would happen once the companies merged got lost in the shuffle. (Not an iPod shuffle, but the general bureaucratic shuffle in Washington, although Sirius and XM helped secure their merger by successfully arguing that they competed with iPods and other devices.)

Now that the nation's only two satellite radio companies have completed their merger, people are wondering what exactly the newly christened Sirius XM Radio will sound like -- and who'll be making those sounds. Crunchgear, for example, asks if the company will renew the contract of XM shock jocks Opie & Anthony now that they're colleagues of Sirius' multi-million-dollar mouth, Howard Stern (pictured to the left). On that point, Mel Karmazin, the chief executive of Sirius XM Radio, had little to say when he went on the Opie & Anthony show today, according to Crunchgear, which nevertheless viewed the appearance as a move to reassure the duo's fans.

On the broader question of what the future holds for the new Sirius XM, the short answer is: It's complicated.

The new company was vague about its future programming lineups in the announcement yesterday of the deal's closure. It said:

As a result of the merger, SIRIUS XM Radio will also be able to offer consumers new packages in audio entertainment, including the first-ever a la carte programming option in subscription media. In addition to two a la carte options, the new packages will include: “Best of Both,” giving subscribers the option to access certain programming from the other network; discounted Family Friendly packages; and tailored packages including “Mostly Music” and “News, Talk and Sports.” The first of the new packages will be available in the early Fall.

But there's a lot more detail in documents filed at the Federal Communications Commission, which removed the last regulatory hurdle when it voted 3-2 to approve the deal last week.

One of the major concessions the FCC got from the companies was that they would not increase their existing $12.95 monthly subscription prices for at least three years, nor reduce the number of channels in those packages.

But Sirius and XM customers, who have gotten used to simplicity (both companies offered only one package at the identical $12.95 price) now will have a somewhat confusing array of other choices.

With three months, Sirius XM must ....

... allow customers to choose whatever channels they want -- the a la carte offering mentioned above -- and introduce a radio capable of allowing them to do that.

There will be two a la carte offerings.

One for $6.99 a month will allow you to choose 50 Sirius channels from a subset of 100 Sirius channels (Sirius has more than 130); or 50 XM channels from a subset of 100 XM channels (XM has more than 170).
The other, for $14.99 a month, will allow you to pick 100 channels, with Sirius customers able to select from a company-determined "best of" XM's channels, and XM customers allowed to select from the "best of" Sirius channels.

Those programming selections haven't been released, but it's a good bet they'll include some exclusive content, such as XM's Major League Baseball broadcasts and channels featuring Oprah Winfrey and Bob Dylan. They likely will also include Sirius' National Football League broadcasts, NASCAR coverage and Howard Stern channels (he's so popular, he has two).

But for those options you'll need to buy a new radio that is capable of receiving individualized channel packages.

For customers who don't want to buy a new radio, there will be several other packages available within three months.

For $9.99 a month, customers will be able to choose either a "mostly music" package or a "news sports and talk" package. For $16.99, Sirius customers will get all their existing channels, plus the best of XM, and vice versa for XM customers. And finally, in a concession to FCC Chairman Kevin J. Martin, the companies agreed to offer a family-friendly version of Sirius or XM channels (presumably without Stern or Opie & Anthony) for $11.95 a month. There will also be a family-friendly "best of" offering that will cost $14.99.

Phew!

The details of these packages are still up in the air. Plus, the company is looking for cost-savings from the merger, so it's likely that some duplicative channels, particularly music genres, eventually will be eliminated.

-- Jim Puzzanghera

Puzzanghera, a Times staff writer, covers tech and media policy from Washington, D.C.

Photo: Howard Stern during his Sirius debut in 2006. Credit: Richard Drew / Associated Press

Comments

[tryaluckystrike]

Is there going to be an option for just Opie & Anthony? Because it's the only station I bother listening to.

[Centurion_Rob]

I love the merger because I get to listen to Opie & Anthony, NCAA Football and now NASCAR, and NFL. It is great but if Opie & Anthony's (and Ron & Fez) contracts are not renewed, there is no point for me to own Sirius XM. I can hear all of the sports broadcasts on FM or watch them on TV.

[Rorison Meadows]

Opie and Anthony blow, Mel is a smart guy and will most likely dump them because they aren't funny

[Anon]

I can wait to see the scenario for those of us who paid for a lifelong subscription on sirius. I imagine XM had the same option. I hope the FCC took this into account...but somehow I'm sure I'm about to get screwed ...let's hope not!!

[co2]

Drop Opie & Anthony because they are hacks anyway, and make the entire thing all Howard all the time... most of the rest of both options is just crap anyway

[Chuck]

"Opie and Anthony blow, Mel is a smart guy and will most likely dump them because they aren't funny"

Mel IS a smart guy and doesn't care if O&A are funny or not (same as with Stern). All he cares about is if they bring more than they cost. He said as much this morning on O&A. They are MUCH more affordable than Howard. If they only have half the audience (very much low balling), they are a good investment.

It will be interesting to see if Howard can pull $100 million/year in 2010 when his contract is up. Sirius NEEDED him to survive. If he went to XM (or stayed on FM), Sirius was toast. This was pre-Mel remember. Howard will be too embarrassed to take less, so look for him to retire then. This also weighs in on S/XM's decisions.

There is a long time to go, so the next 3 months should be fun to watch.

[tryaluckystrike]

co2: Enlighten me how Opie & Anthony are "hacks". Please. I know they can't interview the same midget every day, or talk about "rear entry sex" for hours, but I'd love to know.

Intelligent answers please. Save your zombie babble for your inane Stern message boards.

[Johnny B]

I think it's great that Xm and Sirius finally got the okay to merge.It will be nice to have the best of both companies. Can't wait till everything is finalized.

[jamon hands]

look, tryalucky, its not zombie babble. It's just that some of us in the audience as well as xm's are very fond and partial to Howards' style of humor. The only reason I would call O&A hacks would be out of loyalty to Stern (who is my brand of funny-man), but that doesnt mean they are really hacks....it just means I could never sit through one of their shows- so I wont.

[David Menapace]

I tried to listen 2 Opie & Anthony once and was not able to last 20 mins. I'm not sure what a hack is,but if it has anything to do with being uninteresting. They're that!!

[Dan D]

I listened to Howard Stern from 1993 to 2004 but quit listening to him because he was no longer funny and washed up.(he went downhill when he started to film his movie in mid 96) His move to the left was the final straw in 2004. I could only stand to listen to him about 15 minutes a day from 1999 and beyond and would screen his shows through Markfriggin to see if anything interesting happened.

I listened to O and A since 2000 and beyond(when available). There entire show is interesting to me. They are definitely in their prime and the only reason I subscribe to XM.

[Stern IS Radio]

The simple fact that there are actually normal everyday human beings walking our streets who put Opie & Anthony in the same breath as Howard Stern scares me. Howard is an icon in radio. He IS radio. Howard has owned the media's championship belt for over 20 years now. Opie & Anthony came along god knows when, were actually XM's second choice as well (if you forgot, XM and Sirius were in a bidding war of sorts for Howard's services) It's only after XM lost the war did they then turn to Opie & Anthony - which again was a dumb mistake (in my opinion of course) with the likes of Bubba the Love Sponge out there. So what did Howard do? Went out and grabbed him an afternoon guy, arguably the #2 rated shock jock out there. And they have Ferrall, THE best sports show on television or radio. Howard is a genius.

Don't get me wrong, I am ecstatic over the merger going through because I want baseball. That's it though from XM. Maybe the Led Zeppelin channel as well. I'm more excited for the millions of XM subscribers that we all know will be tuning into Howard live the very next morning they are allowed to do so. Just like EVERYONE who is posting on this page will be doing the very same thing. Who are we kidding here?

[whatever]

why can't we just pick whatever stations we want from each?

[yycken]

I listened to the O&A interview with Mel today and it was what you'd expect from the boys. Serious when they needed to be with a handy dose of humor thrown in (just thank god Vos was booted out of the studio so he couldn't molest Mel with his midget hands) and did a hell of a job! No they're not going to get booted since simply put they're the anchor act for the die hard XM subscribers (the same way hoohoo is for the Sirius base) and they're revenue positive. Ya, Stern brings in more revenue but his cost base for channel 100 & 101 are HUGE compared to O&A. His revenue has to cover all the other hack acts like Bubba, etc. XM Virus doesn't have that issue. And if one thing was abundantly clear from the CNBC, O&A and Stern interviews is that Mel is a businessman first.

[ARIESHEART]

Keep the Clear Channel operated channels.I enjoy KISS and MIX.I would love for them to add some more of their syndicated shows(including Ryan Seacrest).

[Bryan]

Dan D, you are wrong.

O&A signed with XM about a year before Howard announced his move to satellite. Of course XM wanted Howard but didn't NEED him to stay afloat. So your whole idea that XM settled for O&A since they could't get HooHoo is not correct.

[Joe]

These new subscription offerings might make me finally sign up. Mostly music + Howard for $9.99 sounds like exactly what I'd want.

I will never understand why people have such loyalty to someone who has done nothing to personally benefit them. Stern and OA both have their moments as well as loyal fans, however the shows are not mutally exclusive. The issue is not whether you care to listen to them or not, but rather are they good for business. I personally dont care for rush limbaugh, but he is a profitable radio show host because people do. Let the market decide who is on this thing, and please dont be a sheep and express outright hatred over radio personalities who have no bearing on your life. Its really sad.

[Jerrdan]

I don't really care whose camp ypou are in. I have had XM since O&A came on the air. I got it just for that reason. However Howard is just as much fun to listen to. This is great for everyone who wants to actually be honest with themselves. O&A by their own admission loved Howard before he dissed them. I'm pretty sure that since the guys have done pretty well despite Hoo Hoo's efforts, they will get past it. The truth is now our boys will get the opportunity to reach more sets of ears and eventually sign bigger contracts. I don't think they would argue that...

[I_hate_fanboys]

First let me say that "Stern Is Radio" is dillusional. Bubba the Love Sponge the #2 jock in america? And I don't know of a bigger hack then Ferrall. I don't need your sanctimonious crap defense of Howard. I listened to Howard for several years and always watched his E! show. Then he became boring and predictable. The same way Bob & Tom did when they were the only show in the market I lived in. I will defend the guys on here that support O&A. I do listen to their show and find they have a much fresher show. I got a rental car a couple months ago with Sirius in it so I thought I would check out Howard since I hadn't listened to him since going to satellite. I think I made it 30 mins. Guess what....SAME CRAP!. Was this new Howard or 1998 Howard? Must have been new since I heard real profanity without a censor but other than that I couldn't tell. My biggest concern with the merger is Sirius will use my XM sub to prop up Howard's insane contract. Do you really think Howard, who makes $100k per show hour, cares to craps about you? Just try and approach him on the street and say hello to your iconic hero saint.

[Ray]

"I tried to listen 2 Opie & Anthony once and was not able to last 20 mins. I'm not sure what a hack is,but if it has anything to do with being uninteresting. They're that!!" -David Menapace

And yet you managed to still listen for 20 minutes stupid. Frrrrruuuuuunnnkis!

[lg sheldon]

When will I be able to put my sirius channels on my xm and will someone let me know? Thank You Very Much.

[Bill Berry]

There's nothing more aggravating than the word "exclusive". It will be very nice indeed to have NASCAR, NFL, NCAA, MLB, PGA, Indy Car, who'd I leave out? all back under one umbrella. For those of us who all NPR listeners, we get that too. Frankly all the music genres, how many rock stations will that be; 24? I look forward to finally having this settled and we can move on. The day country radio stopped playing Dixie Chicks for their stance with the POTUS is the day I came over to XM and will never go back. There is something fundamentally wrong when I as a listener have to be subjected to a bunch of hypocritical dumbassess in corporate america who decide what is best for me and I'm not given a choice. I can't stand Howard Stern, doesn't imply I think those who do are stupid, no more different than I listening to NPR and CNN. What I care about is we have a choice, so I will be following this for some time to come, though I don't look forward in 3 years what all this is really going to cost. $12.95? Yeah, right!

[Bill Berry]

Don't want to shock anybody, but I don't listen to either O&A or Howard. Everything mentioned in this article is now available on both satellite services with an array of options with the exception of the $6.99 50 channels from a subset of 100 channels of either XM or Sirius. If you have Echostar's Dish Network and XM in your cars and online, you're exposed to both services music; I expect that to merge and redundant channels eliminated. I can't wait for both services to both integrated into the other and I personally look forward to having NPR and XM Public Radio and NFL and MLB and NASCAR and NHL all under one roof. Whatever future the merged companies will hold it has to integrate its product into the iPod universe or some variation of it to survive long term. It also has to borrow a page from Muzak (DMX). No commericals and no promos means just that NO COMMERCIALS and NO PROMOS. I can listen to Muzak via Dish Network and pipe it to my computer or DVR and I kid you not; it all music and I mean ALL MUSIC!

[Bill Rowsome]

Well yesterday woke to find that in the middle of the night and without any notice to customers XM decided to condense the musical lineup into where the Bean Counters probably could save the most money never mind what long term customers enjoyed or why they bought their subscriptions for those of us whom chose at that point to cancel,we are now being held hostage for the duration of contract even though the music lineup is not what we signed up for and are threatened with cancellation fee's of more than we paid for the package so much for customer rights in this merger and promises made!!! Thankfully there is new technology IPODS and such that we can hear the music of our choice not the BEAN COUNTERS with any luck maybe that will be the one satelitte to fall from the sky and hopefully land on some Bean Counter!