Wednesday, July 04, 2007

Satcasters Point To HD Radio As Competition

Sirius CEO Mel Karmazin has to love newspaper articles about the arrival and growth of HD Radio and how such retail monsters as Best Buy, Circuit City and Wal-Mart are now selling HD Radio receivers. That's because Sirius and XM Satellite Radio have already taken that route: They've gotten into the retail stores and been through the hype that goes with that, and with each new media blast about HD Radio comes the realization that it is, in fact, a competitor.

And Karmazin needs audio competitors to make his case to the FCC that the satcasters not only compete for terrestrial radio's audience, but also with all the new stuff -- Internet radio, iPods, HD Radio -- that has come to market in the decade since Sirius and XM were awarded their $80 million-plus licenses to build their mega-billion-dollar companies. Neither of which has made a dime since the first tune bounced to earth from their iron birds.

In an article in Tuesday's (July 3) Washington Post, Karmazin acknowledged that increased rivalry from newer technologies could threaten the future of satellite radio.

"It's not news to us that HD Radio is a competitor," Karmazin told the Post. "It may be news to regulators because they don't follow this as much as we do, but this is the market we saw when we announced our merger."

But HD Digital Radio Alliance president/CEO Peter Ferrara acknowledged what many in the terrestrial radio business have been complaining about recently: There are too few HD Radio receivers in automobiles, where most Americans listen to radio. Ferrara says it will be hard for broadcasters to wrestle carmakers' attention from the satcasters until there is more mainstream demand for HD receivers in cars.

And, for the first time this year, reports the Post, subscriptions for XM and Sirius are growing, through their partnerships with automakers including Chrysler, Ford, General Motors, Toyota and Honda. Ferrara sees that as more of a threat to the widespread adoption of HD Radio. "If they [merge], they can control the dashboard," Ferrara tells the Post about the satellite companies. "They already have the partnerships. They could block us out."

By Jeffrey Yorke -

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