Sirius CEO Mel Karmazin was on Howard Stern today talking about the proposed Sirius/XM merger. Some interesting snippets:

- Mel felt the odds were good — “better than 50%” — that the justice department and FCC would approve the merger
- They met with all five FCC chairpersons by 1pm the day that they met with the media to discuss the merger (the day after President’s day).
- Mel said looking at the financial condition of both companies today he didn’t think either company was on the verge of going bankrupt
- 10 million satellite radio customers/listeners vs. 300 million terrestrial radio listeners
- the NAB was originally against cell phones in the car
- this is a proposed 50/50 deal and the big sticking point over the merger originally was who would have 55% and who would have 45%. XM felt they should get 55% because they were more established had more subscribers (7+ million vs. 6+ million for Sirius) and had more deals with car makers. Sirius contended that over the last couple years they’ve added more subscribers, have better content (NFL, Howard Stern, NASCAR) and better brand recognition than XM. Ultimately they both decided 50/50 was the way to go.
- the name of the combined company will be announced later if/when the merger is approved or closer to the process if it looks like the merger will be approved
- Howard had the Wack Pack come up with creative names for the merger which included: Jessica (really, lol!), Howard (Blue Iris), “I don’t give a ___ what they call it” (from Jeff the Drunk), Sirium (the spacey Riley Martin).
- you will not need to buy a new radio to get channels from the other station (e.g. you own a Sirius radio and want to get MLB content from XM on Sirius OR you own XM and want to get NFL content on your Sirius) — sweet!

Mel Karmazin allayed my main concern that prices would be increased although he did make a statement about having the ability to add/remove channels to adjust pricing. His concern was that satellite radio is competing with ‘free’ so they would go very carefully at pricing. They would also be willing to make concessions to get the deal done.

Davis Freeberg stopped by and doesn’t think the merger will happen:

There is no way this merger gets regulatory approval. Both SIRI and XMSR were granted exclusive licenses to use satellites for radio, combining the companies would make a government certified monopoly.

Mel Karmazin’s response to this made sense. He said that when these licenses were approved 10 years ago there was a different radio climate than there is today. It’s true that internet radio wasn’t really a viable competitive option in 1997 but with EVDO and free WiFi it is becoming a bigger threat (and IMO that will be the future of radio). I think the NAB should be more concerned about internet radio than satellite radio.

The satelitte radio pitch focuses on them not competing so much against each other but against internet radio, terrestrial radio and to quote “iPods.” That’s a good strategy to get this deal done. I’m not as optimistic about regulatory approval as Mel Karmazin, but I’d put the chances somewhere around 30-40%.

Some might wonder why pay for satellite radio when you can get it for free? A few people have asked me why I like satellite radio when the internet has it for free. Well, the truth is legitimately you can’t get the content for free. Let’s face it, there are a lot of people in the world who are willing to pay for really good audio, music and video content.

I can’t listen to every MLB game for free. I’ve paid for that through the internet in the past. I can’t get every NFL broadcast for free. I can’t listen to Howard Stern for free either. To me this is all about content. Whomever has the premium content — whether it be internet, satellite or terrestrial — I’m going to be interested and willing to reach for my wallet.

If you don’t like radio then this might all seem like a non-event but for the 300+ million who do listen to radio, and those who enjoy it like me, it is an important part of entertainment and information in our lives.

Do I think the satellite and terrestrial radio are both doomed on some level to the internet? Yes, but that won’t happen until internet is almost everywhere (and affordable) and content like I mentioned above is also available everywhere on the internet, legally. Bittorrent doesn’t count.

As a Sirius customer I’m more confident after listening to a 60+ minute commercial free discussion (complete with the occasional F-bomb, but not by Mr. Karmazin) that this merger has a fighting chance. I’ve been on red, black and green on the roulette wheel and when you put in the green 0 and 00 that puts the odds about the same.

We’ll find out within the next year.

• Sirius and XM kissing in a tree, now waiting for regulatory approval
• SIRIus continues to narrow the gap with XM
• Terrestrial radio internet opportunities still exist, if they go all the way
• Joined the satellite radio movement, finally
• Find a clear channel at Sirius
• $82.9 million bonus for Sirius subscriber growth awarded to Howard Stern