Sirius XM Radio has reason to be excited about the success of the cash for clunkers program. The satellite radio operator, which posted quarterly results this morning, raised its income outlook for the year on a potential rebound in car sales.

Chief Executive Mel Karmazin said on the earnings call that he was cautiously optimistic that auto industry sales will pick up in the second half of this year.

After all, any increase in car sales translates into more subscribers for Sirius XM, which gets most of its new users from satellite radios built into cars.

Investors have been optimistic about Sirius’s stock all this week, given the launch of its iPhone software and the government’s Car Allowance Rebate System, which lets people trade in their old vehicles for rebates on new, fuel-efficient cars. Reuters’ Franklin Paul wrote on Tuesday:

The U.S. government’s popular “cash for clunkers” incentive program has added spark to the idea that auto sales may rebound after a four-year decline. By allowing people to trade in old vehicles, the program has lifted industry-wide sales back above 11 million units on an annualized basis.

What’s more, Barrington Research analyst James Goss told Paul that Sirius converts about half of its users who get trial accounts when they buy a car into paying customers.

Now, only time will tell whether the optimism lasts, both in the beleaguered U.S. car industry and among Sirius shareholders.

Keep an eye on:

• How Netflix gets your movies to your mailbox so fast. (Chicago Tribune)
• Falling terminal sales have prompted Bloomberg to make one-off payments to staff. (Financial Times)
• Thomson Reuters posts a better-than-expected quarterly profit. (Reuters)

Photo: Sirius XM CEO Mel Karmazin/Reuters

Sirius XM Radio has launched its long-awaited App for the iPhone to mixed reviews. That’s not surprising, really, since the legion of Sirius subscribers has never been sheepish about the pay radio service.

Many users like it, so they can get unique programming in a slick iPhone App. Now they can take Martha Stewart Radio, Road Dog Trucking and the Praise Channel with them anywhere. But you can’t listen to exclusive stuff like Howard Stern’s programming, or Major League Baseball games or the Nascar channel. Ouch.

It’s true that only a handful of channels are excluded (for rights reasons) versus the 120 channels one can listen to. But many Sirius XM subscribers are drawn to the service primarily for Stern, Baseball and the NFL, and they are not pleased. Of 421 user reviews on the iTunes App Store, 261 rate it 1 (out-of-5) stars, and its average is 2 stars. By contrast, online radio app Pandora scores an average 3.5 stars (from a much larger survey sample).

For every Sirius App comment that sounds like this from “Garfinkel”:

The app itself works pretty well. It’s been streaming without a glitch…” (3 Stars)

…there are three that read this way from “MXIKN”:

App shows great promise. Glad I didn’t renew my subscription cause there is no HOWARD. What are they thinking? I’m willing to renew if I can get Howard Stern. Many others will agree with me. Give us what we want. (1 Star)

Still others balked because the “free” App requires a Sirius subscription PLUS, in some cases, an additional $3 monthly fee for its online package.

Business insider’s Dan Frommer said the App may find an audience, but…

…we have a hard time seeing the app driving significant new subscribership to Sirius, as there’s simply too many other ways to listen to music on the iPhone already. (Which don’t cost $13/month.)

I would tell you how I feel about it, but the Sirius XM Radio App for the iPhone and iPod Touch does not run on 1st generation Touches — like the one I own.

UPDATE: I went back to the App store hours later and it downloaded easily on my first gen Touch. (earlier there was an error message that stopped the download.) Can’t give a full review yet, but as first impressions go, “Top Billin’” by Audio Two on the “Backspin” station is golden.

It’s the media! That’s what Sirius would have us believe.

On a post-earnings call on Thursday executives said the company’s precarious financial position during the last few months as it sought to resolve a looming debt debacle was exacerbated by the media’s interest in Sirius. Apparently, stories about companies going bust not only upset investors and creditors, but customers too.

Sirius XM President of Operations Jim Meyer told Wall Street analysts he’s excited to have completed the debt refinancing and merger between Sirius and XM so the company can assure customers it will be around for a while.

There certainly was headwind associated with both the confusion of putting the two companies together and the overall just unbelievable amount of news and press that we have seen really in the fourth quarter and continuing in January and February on the financial condition and refinancing of our balance sheet.

CEO Mel Karmazin agreed:

It’s particularly sensitive for us because people prepay their subscriptions in large part. So the idea of all of the noise in the market certainly when you are asking somebody to prepay and buy a year in advance or something like that, obviously has an impact.

That pesky media!

(Photo of Mel Karmazin/Reuters)

Ah the media, we love a ruckus. We really do. And when the two pugilists are characters as colorful and savvy as Dish Network’s founder Charlie Ergen (left) and Siriux XM Satellite Radio CEO Mel Karmazin (right) we do really get excited.

If you remember, Ergen was widely reported last month to have made a back door bid to take a stake in Sirius XM by quietly buying up some of the satellite radio company’s outstanding debt.  Analysts and experts came up with all kind of theories as to Ergen’s ambitions including taking complete control of Sirius on the cheap, combining various satellite assets, and kicking Mel out.

At the time Ergen ’s official channels at Dish and EchoStar declined to comment on the matter. So today’s Dish earning call was the first time we heard from the man himself on the matter. Well, it turns out the press was right on most things connected with the Sirius bid, according to Ergen. Except for one thing: he does not have bad blood with Sirius CEO Karmazin.

Here’s Ergen from the conference call:

I would take this opportunity to say one thing that clearly was not true is there wasn’t, at least I can speak for my end, there’s no annimosity toward Mel, Parsons [former XM chair] or anything like that.

I don’t know where they got that. Certainly not from our side.

Really?

Maybe the stories of an old feud were overplayed, but there might have something other than pure cold financial logic that influenced Mel’s final decision on this deal. Liberty Media beat Ergen in the bid for a stake in the beleaguered satellite radio business by offering to pay off Sirius’ due loans. In an interview with Reuters shortly after winning the Sirius bid last month, Liberty Media CEO Greg Maffei implied there may have been some… ahem, personality issues in its favor.

“There clearly is less enthusiasm for Charlie from some members of Sirius XM,” said Maffei.

We wonder which members those were?

So after two weeks of following all the twists and turns of Sirius XM’s attempts to avoid bankruptcy, CEO Mel Karmazin decided on John Malone, founder of Liberty Media, to come in as Sirius XM’s white knight with a $530 million loan . The loan will cover the satellite radio provider’s looming debt and help it avoid bankruptcy. As part of the deal Liberty will eventually take a 40 percent stake in Sirius’ equity.

But does this mean the big money deals that Karmazin signed with the likes of Howard Stern, Oprah Winfrey and Major League Baseball will get re-worked at a more favorable rate for the company now that there’s a new major stakeholder?

No, says Liberty Media CEO Greg Maffei in an interview with Reuters.

You can look and say some of these content deals were cut at a time when there were two guys (Sirius and XM) bidding against each other in a relative frenzy. Having said that, a lot of these content relationships like Howard Stern are very valuable to this company, have been important in building the company, and are likely to be important in sustaining it.

But Stern isn’t quite out of the woods.

I’ll rely on Mel and his team to think about how those content relationships look going forward and make the right decisions,” said Mafffei. “All those content (deals) have some term and they’ll get renegotiated or reset at that time for the value that they’re then creating.

With Sirius generating net operating losses which hit $217 million in the third quarter, it would make sense that Liberty might suggest that Karmazin looks at trimming one of its biggest outgoing cashflows: talent costs. But Mafffei seems not to agree.

I don’t think you look and say the way to build profitable business is to hammer the content deal here…as deals rooll-off you can appropriately look at those that are which are adding value and those that are not.

Sirius XM shareholders have seen a lot of dark days — face it, we’re talking about a stock that dropped to 15 cents a share. But today isn’t one of them. At least so far.

Indeed, shares of the satellite radio company jumped 100 percent after Liberty Media Corp agreed to lend it $530 million, allowing Sirius XM and its leader, Mel Karmazin, to sidestep a debt crisis.

The deal comes after a breathless week during which Sirius XM came under threat from EchoStar Corp and its top man Charles Ergen, a longtime rival of Karmazin, and looked very close to bankruptcy.

Now, Liberty Media Corp and yet another media mogul, John Malone, have come to the rescue. Here’s the deal, according to Reuters:

Under the agreement, Liberty would first provide a $280 million senior secured loan to Sirius XM, of which $250 million would be funded on Tuesday to help the satellite radio company repay $171.6 million in convertible notes maturing today.

Then Liberty would provide another $150 million loan to XM Satellite Radio, Sirius XM’s wholly owned subsidiary, and also purchase up to $100 million of XM’s credit facilities.

Once the loans are completed, Sirius XM would issue Liberty 12.5 million shares of preferred stock convertible into 40 percent of common stock.

While the markets are sorting through what all this means, you may want to check out a piece that ran in the Wall Street Journal this morning. It takes an interesting look at how Karmazin got himself into this crazy spot in the first place…

Last summer, after the long-awaited merger of Sirius with rival XM was finally completed, Mr. Karmazin needed to refinance more than $1 billion in debt that the combined company needed to pay off in 2009. But the 65-year-old chairman decided to hold off. The refinancing terms available, he said during an interview in early September, were “ugly” and he was under “no pressure” to get it done immediately.

But the looming deadline provided an opportunity for Charles Ergen….

As of this morning, it looks like he may have wiggled out of Ergen’s grasp. The question is, how does this play out long term?

Keep an eye on:

• Facebooks chief executive is trying to reassure users they they control their information, not the website (NY Times)
• Agency fees are the latest casualty in Anheuser-Busch InBev’s quest to trim $1.5 billion in costs out of the world’s largest brewer (AdAge.com)

(Photo: Reuters)

When media moguls duke it out, what’s their battleground? Newspapers, evidently.

For the past week, EchoStar boss Charlie Ergen and Sirius XM radio’s CEO Mel Karmazin have been doing battle on the pages of two venerable dailies, The Wall Street Journal and The New York Times. The Journal had a head start on the story, reporting how Ergen had started buying up Sirius debt in an attempt to force the satellite radio company into a deal. Then, it revealed how Ergen had actually made an offer to buy Sirius, which Karmazin rejected.

While the rest of the media was digesting all this, out came the Times with a story that said Sirius was preparing for a Chapter 11 bankruptcy filing, which could come within days. It had even hired bankruptcy experts, the Times wrote. The Journal quickly swatted that idea down, saying:

“The hiring of bankruptcy and restructuring advisers, while not surprising given the company’s financial predicament, doesn’t mean a filing is imminent.”

It refined that idea in a story Wednesday night, taking a direct swipe at the Times’ reporting:

“This week, Sirius representatives responded to Mr. Ergen’s move by spreading word that the company was preparing to file for bankruptcy and had hired bankruptcy and restructuring advisers. Company officials also privately told investors that Sirius has entered a “zone of insolvency” and that a bankruptcy filing would be preferable to cutting a deal with Mr. Ergen, according to people who participated in the discussions.”

The New York Post has since gotten into the game, and all three papers reported on Wednesday the appearance of a “white knight” in the form of Liberty Media’s John Malone, who controls DirecTV.

With these papers probably taking turns to report the latest developments on this story, we’re all in danger of getting whiplash.

Keep an eye on:

• The Federal Communications Commission approved the spin-off of Time Warner Cable from Time Warner Inc. That can only be good news for Jeff Bewkes, who can now focus all his attention on selling off AOL. (Reuters)
• The merger of Live Nation and Ticketmaster has raised political hackles, but the groups are out to defend. (Financial Times)
• The media’s love affair with Twitter, or at least writing about it, continues, with yet another takeout on the microblogging site. (The New York Times)

(P.S. A subscription may be required to access The Wall Street Journal stories.)

(Photo: Reuters)

Will it survive? That’s the main question looming over today’s official news that Live Nation will indeed buy Tickemaster Entertainment, a deal that has been much in the news this week.

Already, Sen. Charles Schumer, a member of the Judiciary Committee and Democrat from New York, has called for a federal probe into Ticketmaster’s relationship with resale subsidiary TicketsNow (a relationship that was roundly criticized recently when fans tried to buy Bruce Springsteen tickets) and said a merger with Live Nation “must be viewed skeptically).

As the New York Times recently pointed out, the deal will mark “an early test of the Obama administration’s views on concentrated corporate power, particularly in an area with potentially stark implications for consumers.”

“The combination of the two companies would place under one corporate umbrella dominant players in all sides of the live concert business: the sale of tickets, the representation of artists and the control of concert halls. Of particular issue to regulators, say lawyers with expertise in antitrust law, would be Live Nation’s recent entry into the ticket-selling business — essentially a challenge to Ticketmaster on its own turf,” the story noted.

Of course, even if the deal does survive, and even if it gets approval from antitrust regulators, the process could take some time. Months. A year. Maybe more. Such a time lapse could causes problems of its own — the economic landscape can change, strategy can shift, relationships can fray — and you end up, in some ways, far worse than when you began the whole darned thing.

Just ask XM and Sirius.

(Photo: Reuters)

Reuters and others are reporting that Amazon.com is expected to unveil a new version of the Kindle electronic reader on Monday.

While the Kindle is a tiny part of Amazon’s web retail business, it gets a ton of buzz, and a new version has been much speculated about on the web.  The question is whether mainstream consumers are really ready to buy it, particularly in the current economic environment.

“We think Kindle will be an interesting product which the high-end consumers love, particularly investment bankers traveling in from Connecticut,” Bernstein Research’s Jeffrey Lindsay says in the Reuters story. ”We don’t think it will be a large penetration object any time soon.”

To help with mainstreamers, the Wall Street Journal writes,  Amazon is also expected to say it has acquired a new work by best-selling novelist Stephen King that will be available exclusively, at least for a time, on Kindle.

“Many publishers have long feared that Amazon would persuade a major author to write for its Kindle on an exclusive basis. Although retailers such as Barnes & Noble Inc. have long published their own books, they have struggled to find distribution outside their own stores. But Amazon has already proven that it can sell as many Kindles as it can manufacture. Indeed, Amazon is working to overcome the supply problems that have plagued the device,” says the Journal.

We won’t know all the details until later today, so stay tuned. For now, engadget has what appear to be some early images of the new version.

Meanwhile, the New York Times has a piece today on Plastic Logic, which also makes an electronic book device. The article says that Plastic Logic will “announce partnership deals on Monday that it says will bring a number of major publications to its planned device.”

Keep an eye on:

• Satellite mogul Charles Ergen made an unsolicited offer late last year to take control of Sirius XM Radio Inc and was rebuffed, according to people familiar with the situation to the Wall Street Journal (WSJ.com)
• Most media companies are cutting back on investments but Comcast’s SportsNet is putting money into studio improvements and new programming and revamping its Web sites to bring in more national advertising dollars (NY Times)
• Former Led Zeppelin singer Robert Plant received a “whole lotta love” at the Grammy Awards Sunday, winning five prizes including album of the year for an acclaimed collaboration with bluegrass queen Alison Krauss (Reuters)

(Photo: Reuters)

Because of a big upcoming debt payment — and a stock price of about 14 cents a share — Sirius XM Satellite Radio finds itself in quite a predicament.

This, apparently, hasn’t been lost on EchoStar’s Charles Ergen, who may be getting ready to take over the company.

According to the Wall Street Journal, Ergen has recently acquired part of a $300 million tranche of Sirius debt that matures on Feb. 17: “Sirius recently converted part of the debt to equity, reducing the total debt outstanding to about $175 million. It isn’t clear whether Mr. Ergen participated in the exchange, however. Mr. Ergen could also be buying up senior bank debt, due in May, which trades thinly on the over-the-counter market.”

Given all this, we now offer some food for thought:

1. How does Sirius XM’s Mel Karmazin feel about all this? After all, he is a well-known dealmaker. Is he ready to sell? Ergen could be doing him a favor.
2. If this does pave the way for an EchoStar takeover, would such a deal even make sense? Is there any business wisdom in combining satellite radio and satellite TV?
3. And where would such a deal leave Karmazin? Satellite radio has been his baby, would he leave the game altogether? If not, then how could he work with Ergen? Remember, Karmazin and Sumner Redstone? Not exactly a match made in Heaven.

Keep an eye on:

• Hollywood may at last be having its Napster moment — struggling against the video version of the digital looting that capsized the music business (NY Times)
• Warner Music Group posted better-than-expected results on Thursday, despite falling CD sales and slower growth in digital revenue (Reuters)
• Online DVD company Netflix Incon said one million Microsoft Xbox 360 video game console users have activated Netflix’s movie streaming service in the three months since the two companies formed a partnership (Reuters)

(Photo: Sirius XM Chief Executive Mel Karmazin/Reuters)