CONVERGENCE 2008

Satellite radio may reach 50% of U.S. 2009 vehicles

Mel Karmazin
UPDATED: 10/20/08 9:00 pm EDT DETROIT -- Mel Karmazin, CEO of Sirius XM Radio Inc., said Monday that Sirius XM radios are projected to be installed in 50 percent of all 2009 car models.

In 2008, 30 percent of new vehicles had Sirius or XM products. In 2007, the figure was 15 percent.

Karmazin made his first public appearance here since the merger of the Sirius and XM satellite radio companies was completed in July. He was the kickoff keynote speaker at the Convergence 2008 conference, hosted by Chrysler LLC. The conference focuses on vehicle electronics and customer needs.

During their rivalry in recent years, Sirius and XM signed exclusive contracts with different automakers and brands. Those contracts are not up for renegotiation, Karmazin said. But he said “Best of Both” programming allows the company’s 19 million subscribers to expand their choices to include popular programming from the other platform for just $4 a month more.

Unified technology not ready yet

While the company won U.S. Justice Department approval to merge, unified satellite radio networks and receivers are still in the distant future.

Merging XM and Sirius technology and installing it in new vehicles could take as long as 15 years because of the new chips required and automakers’ lead time.

But the company is offering other options that will distinguish one brand from another.

“Building on the success of our audio entertainment and technology infrastructure, we can bring the relationship to a strategic level by partnering with OEMs to position new-vehicle launches with differentiating Sirius XM features,” he said.

Those partnerships include Sirius Traffic with Chrysler, XM Traffic and real-time weather with Honda, Sirius Backseat TV with Chrysler and Sirius Travel Link with Ford,” Karmazin said.

Sirius XM is dependent on the auto industry for the lion’s share of its business. Over 75 percent of Sirius XM subscriptions come from automakers, Karmazin told Automotive News.

Laserlike focus

Karmazin, the former president of media giant Viacom Inc. and the former CEO of CBS Corp., focused his remarks on meeting customer wants and needs with the range of entertainment programming that Sirius XM offers.

“There’s all kind of content out there. At the end of the day, I think that the consumer is in a great position because people are going to listen to what it is that interests them,” he said.

“We are laserlike-focused on making sure that there is nobody out there that’s going to come close to having the content that we do.”

Karmazin, known for being a champion of shock jock Howard Stern, said satellite radio enables parents to block unwanted programming at a lower price with family-friendly packages.

Karmazin said Sirius XM will not expand into Europe and Asia. If another company wanted to use the Sirius XM model for content and delivery, he said, he hoped the company would be willing to pay cash for Sirius XM’s consulting and advice.

Sirius XM stock today traded for 38.6 cents a share, up 2.3 percent from Friday. Last week, the company proposed a reverse stock split so the shares would trade over the $1 threshold required by the Nasdaq National Market to continue being listed on the exchange.

You can reach Patricia Scott at pscott@crain.com

25

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters