As if Sirius XM Radio didn’t have enough to worry about (like trying to figure out how to pay its debt and cope with the U.S. auto industry’s flameout) now its got to deal with customers grumbling about its radio stations. Some are threatening to quit the service.

That’s right, subscribers are ticked off about what they are hearing on their radios. Not the radios themselves or the quality of the signal or any of that techniclal stuff — we are talking about the actual radio content that subscribers pay $13 or more to hear each month.

Sirius this week unveiled a new channel lineup that combines XM and Sirius’ rock, pop, talk, punk, hip-hop, classical, country, jazz and sports stations. Together, it’s a robust offering of audio content, which may impress new customers. Long time listeners, familiar to particular channels playlists and on-air talent, are speaking up on blogs after the surprise shift.

Tech blogger Dave Zatz said this on his blog, Zatz Not Funny!:

“See ya, XM. I was on the fence and you pushed. Our time together has been mostly positive, but the massive lineup modifications yesterday without any advance notification isn’t the proper way to treat your customers. So I’m walking. “

The chatter is even hotter over at Ryan Saghir’s Orbitcast and the XMFan bulletin board, where thousands have weighed in. Some, for example, are pleased that the XM system that came installed in their new car now gives them access to Sirius channels they had heard before. Most of the comments however, sound like the Hatfields moved in with the McCoys and, as you would expect with rivals, hate each others taste in music.

A taste:

* “Last night, in the car, I did something I had not done in a long time…I listened to a cd. I will not keep my subscriptions if the formats remain “Sirius” ized. I’ve already purchased a car adapter for my ipod.”

* “My wife and daughter are peeved. They liked Kid Stuff on Sirius.” 

* “Mel Karmazin is determined to boost iPod sales.”

I know how they feel: most of the preset stations on my satellite radio were shifted, and two of my favorite channels — a contemporary R&B and an old school hip hop station — are gone. But it’s still mostly commercial free, and I can still get my fill of funk on “70s on 7″.

What is your take on the programming changes on Satellite Radio? Are you happy? Or maybe thinking of playing your iPod in the car from now on?

Keep an eye on:

• Advertising group Havas kept its 2008 operating margin goal on Friday although its sales growth slowed in the third quarter amid a global economic crisis (Reuters)
• Have media shares hit rock bottom? (Reuters)
• Retailers have increased fourth-quarter cinema advertising spending by triple digits on a year-over-year basis – for a variety of reasons (AdAge)

(Photo: Reuters)

Everyone seems to have accepted (like it or not) that advertising spending will be in bad shape in the fourth quarter and well into next year. But just how bad is a matter of debate — every new piece of research marks another downward revision to the advertising outlook.

Case in point is Citi’s Catriona Fallon, who issued a new report saying that U.S. advertising spending would drop by 1.8 percent in 2008 and 3.6 percent in 2009. So what? Well, consider this: that would mark the first back-to-back annual declines since at the 1950s. The 1950s! We’re talking The Cold War, Fats Domino, Gidget, Cadillac Eldorado — you get the picture.

Here’s a bit from Fallon’s research report, where she discussed the thought behind cutting the 2008 outlook from growth of 0.2 percent to a decline of 1.8 percent :

Essentially, we made a dramatic reduction in our Internet advertising growth expectations and also see steeper declines in local ad-focused media categories, including newspapers, radio, and yellow pages. Internet advertising had been one of the few shining lights coming into 2008, but overall economic softness has lowered 2009 expected growth rates in this medium to the single digits. Meanwhile, Q3 results for publicly-traded newspaper, magazine and yellow pages companies, and CIR forecasts for the radio industry show that the ad revenue declines in these businesses have
sharpened over the course of the year.

Anyone seen my Elvis Presley albums?

Keep an eye on:

• More bad new for Sirius XM Radio — as if trading at 27 cents a share isn’t bad enough. The company posted a $4.8 billion write-down and made some more ominous comments about the auto industry (Reuters)
• A nine-car NASCAR pileup may have wrecked a vehicle sponsored by the Federal Communications Commission, but it gave the agency more mileage in advertising the imminent switch to digital TV signals (Reuters)
• Blu-ray backers are banking on falling prices, summer blockbusters and an ad blitz to get consumers to make the leap to high-definition (NY Post)
• Time Inc has asked for volunteers to get bought out from People, Time, Sports Illustrated, Fortune and Money, as it goes into job cutting mode (AdAge.com)

(Photo: Reuters)

Sirius Satellite Radio and XM Satelite Radio want the FCC to know that they are ready.

Like REALLY REALLY READY.

Sure, combined they racked up $230 million in losses in the first quarter. And they added 600,000 net subscribers, to make a combined total of over 17 million.

So what?

What everyone wants to know is when their proposed merger — you know the one announced back in the 1990s in February 2007 will finally close. After 15-months, the individual performance of each company, while important, takes a backseat to knowing when they can combine their efforts. Or,  should the deal fall apart, when they can go back to scratching and clawing for the next hot media property (like the “Dr. Phil Channel” or “The 24-hour World Series of Poker Channel.”)

Each company hosted 45-minutes-short conference calls and sent their respective CEOs up to the microphone to say, “We are Ready“, like the Father at a holiday feast proclaiming that the time has come to stop horsing around –he is about to carve the roast beast.

XM’s Nate Davis seemed to say, “You are great, but I hope this is goodbye.”

Let me just say while the process has clearly been a protracted one, we remain hopeful that we are nearing the end of the process and that this will be the last stand-alone quarterly earnings call we will have.

Sirius’ Mel Karmazin comments were a little more, shall we say, pointed.

This is our fifth quarterly conference call since we announced the merger and…

I share the sentiment I hear from many of you regarding the length of time it is taking to complete our transaction. It is almost 350 days on the FCC clock from when it was put on public notice. (Mediafile: He said the FCC usual mulling time is 180 days). We also share the outrage that some have expressed to me regarding press reports of opportunistic parties trying to take advantage of the process and extract value for themselves that properly belongs to Sirius subscribers and shareholders.

I am optimistic that we are getting close to the finish line and will be able to close the deal.

The only problem is, noone knows how close “close” is.

According to Cowen and Co. analyst Tom Watts, that could be, any day now… or not.

The next step toward an FCC approval will be an Order for Circulation issued by FCC Chairman Martin where he will circulate his recommendation and proposal to fellow Commissioners. While timing of this Order is uncertain, its importance implies that an FCC meeting is not necessary to approve the merger.

(Photo: XM CEO Nate Davis, XMRadio.com; Sirius CEO Karmazin, Reuters file)

Who needs competition when you have a nice big merger to complete? After 13 months of Congressional haggling that would have put John McCain to shame, Sirius chief Mel Karmazin won U.S. Department of Justice approval for his $5 billion marriage with XM Satellite Radio.
    
Sure they’re the only two subscription radio operators, but with all those iTunes downloads and Web radio personalities, there’s no need to think anyone will suffer with Howard Stern and Oprah Winfrey in their exclusive hands.   
    
Most expect the FCC will come through with the final green-light for XM and Sirius to close the deal, and then the real work on actually making money from satellite will begin.
    
We’re still a little stuck on the regulatory landscape that seems to err on the side of bigness, from Verizon and AT&T’s billion-dollar wireless spectrum wins, to a push from underdogs like Microsoft and Google to use the blank spaces of TV spectrum for mobile Internet and the ability to even contemplate a scenario in which Rupert Murdoch buys Newsday.
    
Let the games begin.

Reuters, Deal Journal, Silicon Alley Insider

Keep an eye on:

• Google unveiled plans for a new generation of wireless devices to operate on soon-to-be-vacant television airwaves, and sought to alleviate fears that this might interfere with TV broadcasts or wireless microphones.  (Reuters)
• Fox Broadcasting asked U.S. regulators to reconsider indecency fines the government imposed last month on 13 Fox television stations for airing episodes of a reality TV show in 2003.  (Reuters)
• Hulu video site looks great, but in terms of consistently good service, not so much. (Silicon Alley Insider)
• The CEO of Sony BMG Music Entertainment tells the Frankfurter Allgemeine Zeitung (in German!) that the company is developing an online music subscription service that would give users unlimited access to its music and be compatible with a host of digital music players.
  (Associated Press)

(Photo: Reuters / Mel Karmazin)