It’s pretty incomprehensible that until about two weeks ago, I had never used a piece of Sonos equipment. Heard about it, and read about it? Sure, but never used it. What MP3s did for personal audio enjoyment 5 years ago, Sonos does for your home, office, or wherever you want today, ingeniously creating a seamless and practically unlimited expandable system. Sonos is literally one of the coolest things I’ve seen in years; not because they reinvented the wheel (even though they kind of did in some places), but because it works. More →
A lot of of chatter was generated when the team behind StarPlayr announced it was dumping its project to bring Sirius XM content to the iPhone and iPod Touch. Naturally, is was presumed that one of the main reasons for Apple’s decision — though logic is seemingly not always a consideration when Apple rejects apps — was a Sirius XM streaming app already in the works from the Satellite Radio provider itself. Sure enough this morning’s earnings call was the forum the struggling company chose to announce a forthcoming app. Forgetting the company posted a Q4 loss of $245.8 million, Sirius XM’s radio streaming app for the iPhone and iPod Touch will be released sometime in Q2 and judging by recent changes in the company’s subscription options, expect it to cost money one way or another.
D-Day has arrived for the struggling satellite radio provider and for the time being, all is not lost. Liberty Media has indeed swooped in and pumped $530 million into Sirius XM in order to prevent the company from defaulting on $175 million in debt owed to Echostar today. Echostar’s Charlie Ergen had offered to take control of the company in an effort to “help” it avoid bankruptcy but the Sirius XM board seemingly wouldn’t even consider Ergen’s offer as a possibility. Instead, Sirius opted to work with Echostar’s biggest competitor – Liberty Media is the majority owner of DIRECTV while Echostar owns and operates the DISH Network fleet of satellites – giving Liberty 40 percent of the company and two seats on its board in exchange for the loan, $250 million of which will be funded today. Zing! Despite the fact that Ergen will get his $175 million in full today, something tells us he won’t be doing the happy dance.
This past week we gave you a brief glimpse into the nightmare that Sirius XM’s business has become and since then things have basically been a cluster… err, mess. Sirius did take a big step in restructuring some of its future debts – $172.5 million that was due in December is now due in June 2011, a move that cost the company 60 million shares of stock. Forget the fact that Sirius XM has $227.5 million of December debt remaining, it also still has $175 million that comes due to Dr. Claw Charlie Ergen and EchoStar this Tuesday and another $350 million due in May. For the time being, the only thing standing between Sirius XM and bankruptcy is Ergen’s willingness to take control of the company, a fate Sirius XM seems to adamantly oppose. But wait! What’s that? A hero emerges to save the day? John Malone and his company Liberty Media are rumored to be in negotiations with Sirius XM at this very moment and may gobble up a healthy chunk of the satellite radio provider’s debt in order to stave off bankruptcy filings or worse yet from the looks of things, Ergen. A quick look at Sirius XM’s near-future debt calendar:
- $175 million due this Tuesday (to EchoStar)
- $350 million due in May (to JPMorgan Chase and UBS AB, among others)
- $227.5 million due in December
- $172.5 million due in June 2011
That’s right folks, a shade under a billion. To make matters slightly worse, the aforementioned shift of $172.5 million that excited investors on Friday is contingent upon Sirius XM paying Ergen on Tuesday. If it doesn’t come up with the dough, no deal. In the end, Tuesday is basically D-Day for the struggling company and either Liberty or a mysterious third-party must swoop in and save the day. In either of those cases however, Sirius XM is merely looking at a band-aid until May when it will have to come up with another $350 million. We hope Mel and the gang have channel 35 programmed as a favorite – they’re going to need it.
It might not have happened exactly as terrestrial radio had planned while it was sitting in the shadows, stroking a hairless cat and plotting the downfall of satellite, but it looks like the delays it caused by lobbying against the Sirius XM merger may have ended up doing enough damage. According to a report from the New York Times, the only game in satellite radio town is preparing to file for bankruptcy. With over $5 billion in assets the company would surely be gobbled up one way or another, but its current debts of $3.25 billion – $175 million of which will be called in next week – are causing serious problems for the once-promising radio provider. As the company grasps at straws in an effort to avoid the filing, EchoStar mogul Charlie Ergen has kept his offer from last year on the table; an offer that would see Ergen gain control of the company after forking over several hundred million dollars into it. As much as we love Mel Karmazin, it could indeed be time for a changing of the guard as Ergen continues to push hard. On a related note, it appears Sirius XM may end up with the option to renegotiate or even terminate big contracts. It looks like remainder of Stern’s $6 gazillion contract will be among the first addressed which means he could finally get the out he’s been looking for. Come on, you know he’s been phoning it in for years. Oh well, he was gone in two years anyway.
Well, satellite radio lovers, we have good news and bad news. The good news is that the positive stipulations to the Sirius XM merger deal will finally begin to bear fruit and a variety of new programming packages will be available. The bad news is that many current subscribers will see their fees increased. First and foremost, the basic subscription fee for the current programming package will not budge – as the providers stated during the merger battle, the core subscription will stay fixed at $12.95 per month with lump sum discounts intact. The primary change is one that will affect subscribers with multiple radios, as additional subscriptions will jump from $6.99 per month to $8.99 per month. The variety of new packages and a la carte plans revealed during the merger deal will be available as well however, ranging in price from $6.99 per month to $16.99 per month. Let’s have a look at all of the offerings:
- Sirius Everything (basic subscription): $12.95
- Best of Both (Sirius Everything plus Best of XM): $16.99
- A La Carte (50 Sirius channels a la carte): $6.99
- A La Carte Gold (100 Sirius and/or XM channels a la carte): $14.99
- Mostly Music: $9.99
- News, Sports and Talk: $9.99
- Family-Friendly: $11.95
- Family-Friendly plus Best of XM: $14.99
Plans that combine Sirius and XM programming will of course require a new radio. The other big change is the removal of the free internet streaming option. Currently, paying subscribers can enjoy free low-quality streaming over the internet or pay $2.99 for a high-quality 128k stream. The former will now be removed and all subscribers must pay $2.99 to enjoy programming via the internet. Of course that’s not a bad deal at all; a year of streaming will run $35.88 which is comparable to both Pandora and Last.fm ($36 each), and 25% cheaper than Slacker. These changes will take place on March 11 and users are invited to prepay for service prior to that date in order to be locked in at the current pricing for up to three more years. What say you satellite radio subscribers – happy, sad or indifferent?
It seems like a lifetime ago that Sirius and XM first announced the intentions to merge and form a single satellite radio powerhouse. Subscribers were generally overjoyed by the possibilities; twice the content, a la carte options, the promise that current subscription rates would not increase, etc. It sounded like everyone would be a winner. There was just one problem though… Terrestrial radio and its “relationship” with the FCC. We won’t go into this mockery of government yet again, but suffice it to say that there were some pretty big hurdles that had to be ovecome. Here we are almost 18 months later however, and the merger has finally been approved! Of course there are some conditions to the $3.3 billion deal, first and foremost is the fact that the companies will have to cough up $20 million in fines to the FCC right out of the gate. These fines are a result of FCC claims that several radio models and signal-boosting towers violate FCC regulations. Ok fine, moving on. The other notable stipulation is one that we can’t say we disapprove of:
The companies must cap prices for three years after joining and allow consumers to choose the channels they want and pay less for packages of channels.
Work on a la carte-friendly radios is already underway although it sounds like despite claims made by several on-air personalities, current radio models may not be capable of receiving both Sirius and XM streams. As much of a shame as that would be, we’ll have to wait for some formal announcements before it can be confirmed or denied. Whatever the case may be, last night’s announcement was a big step forward and only time will tell how it plays out.
If you’ve been looking for a way to get your XM Radio fix while rockin’ your iPhone, we’ve got a bit of news that might make your day. Millard software has just released version .53 of uXM for the iPhone, which should bring most of the functionality of a standalone XM radio to your iPhone handset. For those of you with sharp eyes, you might notice that this is, in fact, the same company that brought us uSirius. They did a great job with their first iPhone satellite radio app, and this looks to be as good or better than their initial effort. An XM subscription is required, but if you’re not a satellite radio subscriber of some sort by now, we’re pretty sure there’s no hope left for you.