We’re not entirely sure if the current round of leaks will lift Sirius XM out of its $1.40 per share doldrums, but screenshots of a new iPhone application in development that will let users stream Sirius XM radio stations could put a new shine on the company.
The shots, leaked to Orbitcast, show a login screen that would appear to imply that the service would likely only be available to existing Sirius or XM subscribers or subscribers to the mobile service. We’ve seen various mobile applications that do just that over the years for Windows Mobile phones. But this is the first to offer a common platform for both services — and months ahead of the company’s own timeline for an interoperable receiver.
Citigroup’s Tony Wible thinks the link to Apple “highlight that SIRI’s value lies in its content and not its hardware or infrastructure.” And such applications could help it gain share in the audio entertainment market. “SIRI bears argue that AAPL’s products will take share from SIRI, but we disagree as both MP3 players and satellite radio have unique advantages that leads us to believe both will co-exist. New satellite radio plans create a greater opportunity for synergies between the two,” Wible writes.
We think it could potentially create an ancillary income stream and soften its reliance on automotive contracts at a time when U.S. car sales limp along. Perhaps more importantly, such applications makes Apple, and its ubiquitous devices, a partner rather than a direct rival.
The application, called StarPlayr, developed by GeeksToolBox, could nudge Sirius XM away from Apple’s line of fire.
The marathon satellite merger for Sirius and XM is finallycomplete. (Check out the new “Sirius XM Radio” logo, above, provided by Sirius.)
That means new channel options, new pricing options, new radios — eventually.
We want to know if you care. Does the prospect of having Oprah and Howard Stern on your radio make you want to sign up for satellite radio? Will you start paying for the service once the free subscription in your new car runs out? Does the thought of the upcoming professional football season mean it’s time to pick up a satellite radio?
Hear that? It’s the sound of sighs. Sirius Satellite Radio has finally completed the purchase of rival XM Satellite Radio.
“The completion comes after a marathon period of government scrutiny that ended late last week when the U.S. Federal Communications Commission approved the deal, which was first announced 17 months ago,” Reuters reports.
Now that the deal is done, it’ll be interesting to see whether it was worth the wait. Neither company has posted a profit on its own, and, in fact, they have posted huge losses along the way as they’ve paid to build up subscribers.
RBC analyst David Bank put it this way in a note to clients: “While merger is beneficial for Sirius, we remain cautious as significant execution risk exists implementing synergies and recognition of synergies is probably already priced into stock.”
While they will no longer be fighting one another, they will still have to convince audiences to pick satellite radio over traditional radio, digital audio players and iPods. That’s no easy task, particularly when people are worried about gas prices, food costs, a lousy housing market and a fragile job picture. Do people really want to be spending their extra cash on satellite radio?
Keep an eye on:
Martha Stewart Living Omnimedia reported a quarterly profit, buoyed by higher magazine advertising sales and revenue from deals to label various products with its brand (Reuters)
AMC’s “Mad Men,” coming off 16 Emmy nominations, scored record ratings in its second-season premiere, drawing nearly 2 million viewers (LA Times)
The Los Angeles Times new monthly Sunday magazine, LA, will debut on September 7 (Folio)
Sony Corp posted a bigger-than-expected 47 percent fall in quarterly profit and cut its outlook, hurt by its struggling mobile phone joint venture with Sweden’s Ericsson, while rival Matsushita nearly doubled its profit on rising flat TV sales (Reuters)
Federal regulators have cleared the last remaining hurdle for Sirius Satellite Radio’s proposed acquisition of XM Satellite Radio Holdings, a deal that will combine rivals in the nascent U.S. pay-radio market.
The U.S. Federal Communications Commission reached an agreement to conditionally approve the deal on Thursday, four months after the Department of Justice gave its blessing, and 18 months after XM and Sirius agreed to combine. Experts say that new services from a combined company could come in a few months, but suggest their holiday subscription growth may be hurt by the delayed deal closing.
Here are are some important dates in the history of the satellite radio industry.
* Jan 2006 - Sirius starts broadcasts of Howard Stern.
* Feb 2007 - Sirius and XM propose merger; Deal requires approval of their respective shareholders, the U.S. Federal Communications Commission and the U.S. Justice Department. Sirius CEO Mel Karmazin to be CEO of new company, XM Chairman Gary Parson to become Chairman.
* July 2007 - CEO Hugh Panero says he is stepping down in August; COO Nate Davis to become Interim CEO.
* Mar 2008 - The Justice Department approves the deal.
* June 16, 2008 - FCC Chairman Kevin Martin announced his recommendation to approve the merger with conditions.
* June 30, 2008 - Sirius ends the second quarter with 8.9 million subscribers, up 25 percent from a year earlier. XM had 9.65 million subscribers at the end of June, up 17 percent from a year earlier.
* July 25, 2008 - FCC Commissioners approve the deal with conditions, clearing the way for a deal that will leave just one U.S. satellite radio service. Analysts expect the deal to close within days or weeks of the regulatory approval.
(Sources: XM, Sirius, Hoover’s, Reuters)
(Top picture: A Russian Proton with a satellite for Sirius Satellite Radio is lifted into place at its launching pad at the Baikonur Cosmodrome, Kazakhstan, on September 1, 2000, while (L to R) Bob Prevaux, Program Director for Space Systems Loral talks with Rob Briskman, Executive Vice President for Sirius Satellite Radio and Ted Sitek, Mission Manager for International Launch Services. (Reuters/Karl Ronstrom))
It seems that the head of U.S. Federal Communications Commission Kevin Martin will support Sirius Satellite Radio’s proposed purchase of rival XM Satellite Radio.
The Washington Post and others are reporting that Martin decided to support the deal after the companies agreed to concessions intended to prevent the new company from raising prices or stifling competition among radio makers.
A decision has been a long time coming. Seventeen months ago the two companies announced they would merge, bringing entertainers such as Oprah Winfrey and shock jock Howard Stern under the same banner. The Justice Department approved the deal in March, but the companies are still waiting for the FCC.
The question is, have the delays made the whole issue mute? Have iPhones and every other sort of portable music/phone/camera/microwave oven gadget made concern over the XM/Sirius combination seem… well… dated?
Keep an eye on:
Carl Icahn, who launched a proxy battle in May to replace the board of Yahoo says the deal Yahoo forged with Google “might have some merit” (Reuters)
A bigger, meaner “The Incredible Hulk” crushed the competition at North American weekend box office with a $54.5 million take, but still fell short of its predecessor (Reuters)
Time Warner hopes to move swiftly to find a buyer for AOL’s dial-up business after the company completes its separation from the Platform A advertising division in the next month, unnamed sources told the (NY Post).
Canada’s Nortel Networks is challenging larger rival Cisco Systems with a negative advertising campaign, saying that Cisco’s equipment uses twice as much energy as that of Nortel’s (WSJ).
The Associated Press will attempt to set standards on how much of its articles and broadcasts bloggers and Web sites can excerpt without infringing on its copyright (New York Times).
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 announcedback 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)
We’re not entirely sure if the current round of leaks will lift Sirius XM out of its $1.40 per share doldrums, but screenshots of a new iPhone application in development that will let users stream Sirius XM radio stations could put a new shine on the company.
