Sirius Founder: You’re 10 Years Too Late, Karmazin

Is it too late for Sirius XM? CEO Mel Karmazin and John Malone, whose Liberty Media (LINTA) just tossed the foundering satellite radio outfit a $530 million lifeline, clearly don’t believe so. So do the company’s long-suffering investors who continue to stand by it, though their faith has been sorely shaken.
But the same cannot be said for Martine Rothblatt, the entrepreneur who founded Sirius (SIRI) nearly 20 years ago. She feels Sirius’s chances for real success may have died years ago–dealt a mortal blow by the FCC, which delayed its launch, depriving it of the competitive advantage it might have had over MP3 players like the iPod and later free Internet radio services.
“There has been a huge growth in terrestrial alternatives,” Rothblatt told Fortune. “As we move from third-generation to fourth-generation cellular, there’s going to be ever more bandwidth available to distribute content totally via terrestrial cellular infrastructure. And that will leave fewer and fewer unique market attributes to satellite radio. Technologies have their ideal times and places, and in my opinion the better time for satellite radio was 10 years ago.”
So much for that first-mover advantage…
A grim assessment for Sirius, which had just seemed to be getting an edge on its daunting troubles. But Rothblatt has a point. Internet radio is gaining traction and once cellular networks evolve to the point where they can deliver it to cars and other devices, how can satellite compete? Howard Stern’s going to retire sooner or later…
PREVIOUSLY:
- Sirius to Shareholders: Put Down the Mylanta
- Call Me Mel “Save-My-Own-Keister” Karmazin
- Sirius-EchoStar-Liberty: Ménage-à-Blah
- Sirius: Give Me Liberty or Give Me Ergen
- A Bankruptcy Filing, Mel? Surely You Can’t Be Sirius…
- Sirius Rolls Out New 24 Hour Investor Keening Channel
- Sirius Debt Problems? Call EchoStar! No Upfront Fees!
- Sirius XM: The Beginning of the End or the End of the Beginning?
- Your Report Card Is Your Stock Price? Guess Sirius Is Making Straight $.13’s…
- Trade You 77 shares of SIRI for 1 Month of “Sirius Everything”





Comments
I am actually a huge SiriusXm fan. It only costs you the price of a cheap meal per month. I started mainly listening for Stern but love the music choices. I also advertise on the channels as well. http://www.rsafunding.com
Posted by Rob Shea at March 16th, 2009 at 2:58 pmI didnt know Howard Stern was the force behind the drive of Sirus radio. Or That not to mention that the stock has risen about 30% since last week. I get a big Laugh when I read Motley Fool on how they slam the stock
Posted by Jeff Johnson at March 16th, 2009 at 3:29 pmXM/Sirius owns the rights to a significant amount of content (i.e.Music as well as Howard Stern, NHL, NFL, NCAA and NASCAR). As a shareholder and subscriber, I hope they can enter into agreements to leverage these “rights” and stream their content over other platforms/mediums like iPhone, Blackberry, internet.
Posted by Jeff Cohen at March 16th, 2009 at 4:18 pmInternet Radio is DOA.
It took all of 2 minutes to type and find an article with the google search – internet radio royalty fee
AC station WBEB (B101)/Philadelphia has ceased streaming its signal online as of Sunday, March 15. The move comes in protest of online music royalty rates, which have nearly doubled in the last three years. Even under a new agreement with music rights group SoundExchange, the rates will continue to increase through 2015. B101 owner Jerry Lee says the rate increases are excessive and will ultimately limit the ability of listeners to receive music online. He estimates that by 2015, nearly half of all the revenue that WBEB would be able to generate from streaming music online would go to SoundExchange for royalty fees, making streaming an unviable business option.
Posted by Jeff Stevens at March 16th, 2009 at 5:31 pmI actually gasped at the torrential downpour of negative articles today, the moment Sirius showed signs of life and PPS increased. Terrestrial alternatives? This is a blatant lie. Stern’s former FM home, K-Rock, today confirmed the fact that he was irreplaceable, after pulling the plug on their last hope for Stern replacements and abandoning any hopes of being a rock station, selling out instead to become Top 40 ‘workplace radio’ in hopes of generating ad revenues, which have collapsed since Stern left. The censorship atmosphere of Terrestrial has only helped Sirius, the time has never been better for Sirius to succeed. In fact, it’s a FAR better time now than 10 years ago.
Posted by Jim Smith at March 16th, 2009 at 11:25 pmWhy is XM/SIRIUS being blasted the way it is?? It’s not hard to see. The terrestial media is terrified at the idea of losing most of their advertising dollars, its that simple!! 20 million subscribers?? If I am advertising my business, and want to get to that many people at once, i’m NOT going to terrestial radio, im NOT going to the Washington Post, New york Times, or the L.A.Times, and im NOT going to television and all the markets it will take to reach that many people. Since all three media types either own eachother, or are owned by each other, I can see why all three are so worried. Now, 95% of all people are lazy, don’t go out and look for the facts, and only get their information from these three media outlets. So do you, or anyone you know, actually think your gonna hear a single positive “ANYTHING” from these three? In my trucking company, every truck is equipped with XM/sirius, and every driver is totally satisfied. there is NO terrestial outlet… internet-HD radio-ipod-mp3 players or whatever you want, that gives the value, choices, and wide range of coverage that XM/SIRIUS can offer…for the cost of an extra cup of coffee every two days. All I ask is an outlet that will give fair and untainted information with no bias or outside influence. PLEASE
Posted by randy newkirk at March 17th, 2009 at 9:44 am> Terrestrial alternatives? This is a blatant lie.
Terrestrial means OF THE EARTH. So AM/FM, WiFi, cell phone data streaming – it’s all terrestrial.
> Stern’s former FM home, K-Rock, today confirmed the fact that he was irreplaceable
Uhhh, K-Rock had already flipped to another format and then back to Rock. It’s not 1989, it’s 2009 – radio has changed even if Stern were to come back. Since you attribute FM radio’s failings to Howard Stern leaving and not simply to incompetent management to what do you attribute “SiriusXM” narrowly avoiding bankruptcy? Is it not Stern’s (admittedly Sirius’s “flagship” property) fault Sirius did not accumulate the number of subs it had originally envisioned? Or is that simply “incompetent management”?
Posted by Steve Webber at March 17th, 2009 at 7:56 pmGeez. I can’t believe no one is looking at the basic problem that both XM and Sirius have always faced and continue to face: they have managed to devolve into the worst kind of terrestrial radio with loads of talking DJs from another century who take every opportunity to interrupt the music to luxuriate in their own voices. Then there’s the constant stream of self-promotional spots and commentary.
Both of these companies managed to take wonderful new technology and dumb it down to the point that I’d rather listen to FM radio where they at least don’t pretend to be commercial-free and all about the music. I often listen to the blues channel where constantly throughout every hour the completely unnecessary and incredibly dull and annoying DJs – all rejects from terrestrial radio – state “OK, let’s get back to the blues.” Why do they ever have to *get back* to the music? The music should speak for itself when the listener has paid for the privilege of listening to their favorite genres of music commercial-free? I’ve been paying for a subscription (2 when I had my car) for years now but the next invoice that arrives will go directly into the trash.
Posted by Mark Lipsky at March 18th, 2009 at 8:44 amthis is such a bogus article. If you had been fair you would have mentioned the part where martine said that she still thinks theres tremendous potential for sat rad.
but apparently youre connected with all the siriux xm hater club somehow.
Posted by trevor jordet at March 19th, 2009 at 7:58 pmI was looking at your credentials…just to be fair… and You come up short.
from what I can see, you are an opionionated journalist, not an expert in technology. have you ever written a line of code? have you ever built a server?
what gives you the right to speak as an authority on technology? I love how people can assume the identity of a technology expert when their experience consists of a “mojave experiment” with new technology products an then they move on to the next item. I prefer to hear from someone who uses the technology day in and day out. someone who actually taxes it to the limit in real world scenarios.
Do you have a Sirius or XM subscription? if not, you have NO RIGHT to comment on the technology. If you don’t, your articles about it are nothing more than opinionated fluff backed by hot air.
Posted by trevor jordet at March 20th, 2009 at 6:25 am“Do you have a Sirius or XM subscription? if not, you have NO RIGHT to comment on the technology.”
Ahh. An absurd statement which harkens back to Mussolini’s Trincerocrazia. For that matter, I guess you can’t comment on education unless you’re a teacher? Can’t comment on law enforcement matters unless you’re a cop. Not to mention the absurd notion that one can’t support a war unless their a soldier. Nevermind that, by that logic, one can’t oppose a war either.
I’ve never had a sub to XM because it wouldn’t be practical for me with a short commute. However, I’ve used it many times before in rental cars. Does that mean I only have a partial “RIGHT” to comment?
Get over yourself, Trevor. We’re smarter than you think you are.
Posted by Rob Schellinger at March 23rd, 2009 at 3:33 pm