Two stories surfaced on Reuters regarding the future of SiriusXM. One about distribution and the other a story we've seen before--Mel and Howard getting ready to do the contract dance. Hadn't seen these stories in the trade press yet--thought you might find them interesting.
Sirius, Liberty could do WorldSpace deal
NEW YORK (Reuters) - Sirius XM Radio Inc (SIRI.O: Quote, Profile, Research, Stock Buzz) could team up with Liberty Media Corp (LINTA.O: Quote, Profile, Research, Stock Buzz) to take its satellite radio offerings global through a partnership with WorldSpace Inc (WRSPQ.PK: Quote, Profile, Research, Stock Buzz), Chief Executive Mel Karmazin said on Monday.
"We understand that Liberty has expressed an interest in WorldSpace," Karmazin said at the Reuters Global Media Summit in New York.
But if a partnership with Liberty does come about, Sirius would not invest any money, he added.
"We would put our expertise and experience in the pot and Liberty would put their money in the pot," Karmazin said.
Liberty Media, controlled by cable pioneer John Malone, rescued Sirius from a possible bankruptcy filing earlier this year with a loan of $520 million. In return, Liberty secured a 40 percent equity stake in the company.
Through a subsidiary, Liberty Media has also bought up the debt of WorldSpace recently, leading to speculation that Malone would seek to combine Sirius and WorldSpace. Most of WorldSpace satellite radio's subscribers are in Asia and Africa.
"So one would think that if Liberty were to do something there that they would want as strategic partner somebody who has successfully done satellite radio in 5 percent of the world," Karmazin said.
Such a partnership could involve Sirius bringing its relationships with car makers and expertise in building satellite radio gear to WorldSpace's operations, he added.
It’s been five years since Sirius lured shock jock Howard Stern to satellite radio with a $500 million contract. Whether Stern can re-up with a similar deal when his contract expires at the end of next year is anyone’s guess, but it ought to be entertaining. Sirius XM CEO Mel Karmazin is preparing himself for negotiations with the self-proclaimed King of All Media. In a meeting with reporters at the Reuters Media Summit on Monday, Karmazin gave us a thumbnail sketch of his version of “The Art of the Deal.”
“I could tell you, it will start with Howard feeling that he is working too hard and doing too many shows and not making enough money. Our side would say, ‘We want you to do more, and get less money,’” Karmazin said.
“That would be how we would go into the room once the time came to go into the room. And the hope would be that we would come out with Howard staying with our service,” he said.
Karmazin praised Stern as “a talent like no other in radio,” but would not say whether such a talent was still worth a half billion dollars.
“You have to now assume that the negotiations are at a stage where everything is in print, so if I were to say, yes, we got every penny’s worth, Howard would come in with that piece of paper and say ‘See? I sold myself too cheap,’” he said.
Stern is one of the biggest draws of Sirius XM’s satellite radio service, which counts 18.5 million subscribers. His decision to exit FM radio for Sirius in 2004 is credited with establishing satellite radio as an established form of media, though some analysts have also noted that high-priced contracts like Stern’s contributed to financial woes that pushed Sirius to the brink of bankruptcy earlier this year.
Stern is not the only big personality whom Karmazin may face at the bargaining table; Oprah Winfrey’s contract for her Sirius talk show ends in 2011. While Karmazin said he has not yet had talks with Oprah, he said that satellite radio could become a more valuable promotional tool for Oprah once she quits her broadcast TV show.
Asked whether Oprah or Stern was the tougher negotiator, Karmazin said both previously got the best of him.
“I’ll tell you who was the worst negotiator: It was always Mel because they got all that money from me.”
Howard Stern has done what few radio talents have achieved during their careers--gotten super rich. So rich in fact that CNBC's High Net Worth show did a feature on Howard and soon-to-be wife Beth Ostrosky. (See the video below)
No sour grapes here. Just admiration for a guy who started out with a dream of being on the radio, worked really hard, had talent, had a vision, found his UNIQUE space, and had a good agent. A little good luck didn't hurt either.
You may be thinking, given the state of the radio industry today that achieving Stern level success is a fool's game. I think not. Despite the cuts, the all-music formats, and the gloomy outlook I believe the days of superstar radio talent are ahead of us. In the years to come as music becomes even more commoditized radio will be FORCED to look to talent to keep the medium alive and thriving. The specific delivery system won't matter.
Sure, some of this superstar radio talent may come from Hollywood--stars taking to the microphone and trying to make the difficult transition to radio. It's way different talking live for 3 or 4 hours than scripted TV talk shows, sitcoms, or movies. Casting will be key. Look at "failed" Whoopi Goldberg--she tried to make the move to radio and it didn't go so well. From the beginning I thought she was miscast. Whoopi's strengths did not mesh well with breakfast table happy talk; instead she should have been dishing strong opinions and politics mixed with her unique comedic skills. Now, we have a show!
Don't think for a minute that there are enough celebs to fill all of the hours with great entertaining radio. Tomorrow's star will be coming from many different places--including local talents who have a knack for comedy, conversation, information, and engagement. What's special about your personality? Can you write? Can you connect? How are you different from everyone else? Those with the answers might just get the big break.
Here's a hint: even if you are currently in a tightly regulated format take some initiative and start producing entertaining podcasts on your own. Start a personal blog. Share your podcasts on iTunes and other podcast distribution sites. Take your future into your own hands. See the forest through the trees as they say. (***before enbarking on a blog and podcasting endeavor make sure you are not violating your current employers rules***)
Robin Quivers is famous for saying the words-Oh Howard-when Howard Stern would veer off into questionable territory. This morning I'm saying "Oh Howard" for a different reason--I got to listen to some of his History of Howard show yesterday and today and it was superb--well produced, interesting, historical, topical, and at times side-splitting funny. I had tears streaming down my face from laughing so hard. I sat in the car unable to leave because I needed to hear how a bit would end. When was the last time that happened? Exactly!
Look, Howard isn't for everyone, but, love him or hate him he must be recognized for his long-time accomplishment of consistently entertaining his listeners show after show, year after year. As we approach 2008 his style and content has held up very well and has been emulated by scores of others.
When will the next renegade talent break through and captivate us to stare at the radio (or computer or smart phone)like it was a movie screen? And what will that person sound like? Maybe the larger question is will this talent be allowed to develop content that may not be in the center lane? Will they be given the lifeline for two or more years to "find their audience?" I ask these questions because I suspect it won't be easy.
With approximately 93% of all Americans still using the radio every week, we like no other entertainment vehicle, have the means to create stars. Are you doing something really unique and different? I would like to showcase your best work right here in this space. Email me with your story and some mp3 audio and I will pick (subjectively of course) some of the best entries and share them on this blog.
In a meeting with reporters at the Reuters Media Summit on Monday, Karmazin gave us a thumbnail sketch of his version of “The Art of the Deal.”
