Mel Karmazin, now CEO of Sirius Satellite Radio, started in the radio business at age 17 and rose to the top by being the glibbest and most persistent ad salesman. But his able patter hasn't served him as well in recent years. After leaving Viacom because he couldn't coexist with equally alpha Sumner Redstone, Karmazin had hoped to restore his reputation in the nascent but promising satellite-radio market. That market hasn't quite developed as he'd hope. His future, and the future of satellite radio, will be determined by consumer and government acceptance of the merger of the two satellite-radio companies — XM and his own Sirius. And Karmazin has turned to a Washington Times' op ed to use his legendary gladhanding skills to sell everyone on the merger's merits. Don't be fooled. Excerpts and translations, after the jump.
We built our industry by providing choice. Now we're ready to increase choice, raising it to the next level. This a la carte offering represents the first-ever in subscription media. Consumers will have two different a la carte packages to choose from, in addition to six other programming options.Please, please, please ... be too stupid to realize that this isn't a la carte. Your phone contract, with its minute tiers and additional fees for unlimited texting or web access, and your TV plan with its premium packages works exactly the same way. And, please, don't think about all those consumers lobbying the government for true a la carte cable, not tiered subscriptions. The only way the government will approve this merger is if we adopt the trendy phrase "a la carte," without really meaning it.
The new programming packages will be available through existing devices, with the exception of the a la carte packages. A la carte programming will require a new device, which will be priced in line with those currently on the market. So, after our merger, we will not only offer more choice but will make choice cheaper.Existing customers will not be offered more choice. For them, choice will be more expensive.
The audio entertainment market today is brimming with competition and will be even more competitive after our merger. MP3 players, iPods, HD radio, Internet radio, satellite radio and mobile phones are revolutionizing the listening experience. There has never been a better time to be a consumer.Satellite radio is such a weak offering that it can only compete by having a monopoly. There has never been a worse time to be in the satellite-radio business.
However, the efficiencies and cost savings we realize from the merger will allow us to compete more aggressively with terrestrial radio, the 800-pound gorilla that still dominates the industry. Terrestrial radio reaches 230 million weekly listeners who access terrestrial programming free of charge in virtually every home and vehicle in America.We are still obsessed with terrestrial radio, despite other modes revolutionizing the audio market, because we can't figure out how to make a profit from expensive subscriptions while they manage to do it by giving their broadcasts away.
As for passing the regulatory hurdle of demonstrating that the merger is in the public interest, this transaction is a slam-dunk ...I'm writing this op ed for a Washington daily precisely because I'm worried we won't be getting regulatory approval.