Sirius XM ‘Values’ Are ‘Much Different’ Than ‘Pure Radio’s, Liberty Says
Sirius XM pays a fair royalty rate based on a situation “entirely different” from that of “pure radio” that’s dependent on the SoundExchange performance rights group, Liberty Media CEO Greg Maffei said Wednesday at the company’s investor conference in New York.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Maffei, answering a question addressed to Sirius XM CEO Mel Karmazin, who left the room after his presentation, said Sirius XM negotiates “exclusive, unique content” deals much different from those secured by Pandora and others. Lawmakers in the House and Senate in September introduced the Internet Radio Fairness Act aimed at aligning different broadcast platform royalty payments under the same standard used to establish rates for cable and satellite radio services. Liberty Media owns 49.5 percent of Sirius XM. “Pure radio is entirely dependent on SoundExchange,” said Maffei, referring to the group Sirius XM filed an antitrust suit against earlier this year. “We have many other values and are much different."
Meanwhile, “virtually all” automakers offering the Sirius XM service have adopted its 2.0 platform starting with 2013 models, Karmazin said in his presentation. Sirius XM launched Sirius 2.0 in 2011 in standalone products, but moved this year to have it built into automobiles. As part of the new platform, Sirius XM On Demand was introduced in August initially for iPad, offering more than 200 shows and 2,000 hours of content. It also expected to launch the Personalized Radio Project late this year, details of which haven’t been disclosed.
The new platforms come amid a needed push by Sirius XM to secure more exclusive content bundles, Liberty Media Chairman John Malone said at the conference. “This would get Sirius XM ‘uniqueness’ without having to buy the product away from other distributors,” Maffei said. Sirius has been engaged in several high stakes negotiations for content, including a 2005 agreement with Howard Stern that carried $100 million in annual production and operating costs for the show.
While Liberty’s application remains pending at the FCC to gain de jure control of Sirius XM, the Sirius XM board might consider a “return of capital” to Liberty, Maffei said. Liberty has said it expects to pay $1.5 billion in additional funds for its open market purchases to get a full 50 percent ownership of Sirius XM. Liberty may seek to recoup the funds through a stock buyback or through dividend payments in the months ahead, analysts have said.
Meanwhile, Sirius XM raised its forecast for 2012 subscriber gains to 1.8 million from 1.6 million, helped by growth in auto sales. Sirius XM added 446,000 subscribers in Q3, up from 335,000 the previous quarter, the company said. It marked the best Q3 since the 2008 Sirius-XM merger, Karmazin said. Sirius XM added 1.7 million subscribers last year. The service is preinstalled in 68 percent of new cars, Karmazin said.