Satellite audio service XM learned that an Federal Trade Commission inquiry into its marketing and customer service practices has been dropped with no action in the works. Meanwhile, the CEO of its prospective wedding partner, Sirius, is ready to sue the FCC if it fails to allow the nuptials to proceed. Sirius honcho made that revelation to the Chicago Tribune. He noted that the deal would be in the public interest since it would allow the combined entity to offer channel bundles to consumers are prices below the current 12.95/month subscription rate. He continued to insist that the satcasters compete with AM/FM radio and all other audio delivery media. Asked about Howard Stern, he said that his 80M per year salary requires 1M subs paying 120/year (at the 12.95 rate). When he signed Stern, the Sirius sub total was 700K; now it’s 7.7M. He said although Stern may claim credit for all 7M newcomers, he didn’t believe that to be the case, but he did bring in more than enough to justify his pricetag.
RBR/TVBR observation: Karmazin mentioned lowering prices, and indeed some of the packages the two companies have described are lower, for less content. Many of them are actually substantially MORE expensive than 12.95 a month, a fact he conveniently left out of his chat with the Trib.
