Sirius XM Radio

Sirius XM Radio Inc. (NASDAQ: SIRI) is an American broadcasting company that provides two satellite radio services (SDARS) operating in the United States, Sirius Satellite Radio and XM Satellite Radio. The company also owns interests in XM Canada and Sirius Canada, two satellite radio providers in Canada. The company in its current incarnation was formed following the acquisition of XM Satellite Radio, Inc. by Sirius Satellite Radio, Inc. on July 29, 2008.

On February 19, 2007, Sirius Satellite Radio and XM Satellite Radio announced a merger that would combine the two radio services and create a single satellite radio network in the United States. The merger brought the combined companies a total of more than 18.5 million subscribers based on current subscriber numbers on the date of merging.

The proposed merger was controversial because, in 1997, the U.S. Federal Communications Commission (FCC) granted only two licenses and, in order to ensure a state of competition, stipulated that one of the holders would not be permitted to acquire control of the other.
Each share of XM stock was replaced with 4.6 shares of Sirius. Each company's stockholders initially retain approximately 50% of the joined company. Sirius CEO Mel Karmazin became CEO of the new company, and XM chairman Gary Parsons was named chairman. XM CEO Hugh Panero stepped down in August 2007.


July 29, 2008 — Sirius CEO Mel Karmazin hosts a town-hall type meeting at XM Radio's Washington, D.C. headquarters which is broadcast companywide. Karmazin reveals that the management team would consist of him with a second tier of as many as 26 Executive Vice Presidents.

July 30, 2008 — Karmazin hosts a town-hall meeting with Sirius employees after appearing on several Sirius and XM shows, explaining the future of the new company. Karmazin also thanked the National Association of Broadcasters (NAB) for the strong opposition to the merger which, in his words, established that terrestrial radio and satellite radio were still competitors.

September 9, 2008 — Sirius XM announces new "Best of Both" content, and would be available to most satellite radio customers on October 6, 2008 at a monthly cost of $16.99. The Sirius programming included in Best of Both being aired on XM: Howard 100, Howard 101, Martha Stewart Living Radio, Sirius NFL and NASCAR Radio, and Playboy Radio. XM programming included in Best of Both being aired on Sirius: NBA, NHL Home Ice, Oprah & Friends, The Virus, Public Radio with Bob Edwards, College Sports, and the PGA Tour.

November 12, 2008 — Sirius XM begins broadcasting a new combined channel lineup across both the Sirius and XM platforms. (On January 15, 2009, some stations previously dropped were added back to the line-up, due to subscriber demand.)
February 10, 2009 — It is reported that Sirius XM has hired advisors to prepare for a possible Chapter 11 bankruptcy filing.

February 17, 2009 - Liberty Media (49%-owner of DirecTV) acquires 40% of Sirius XM, with rights to acquire another 11%.
March 11, 2009 — Subscriptions for multiple radios (i.e., 2nd–4th radios) increase from $6.99 per month to $8.99 per month. The base subscription rate did not increase. The online listening platform was upgraded to a higher quality digital audio and is no longer included as part of a base subscription (i.e., at no charge).

June 16, 2009 — Sirius XM announces that beginning July 29, 2009 (as accounts renew after that date) subscribers would have to pay an additional $1.98 per primary account radio and $0.97 for each additional radio for radios 2–5 on an account as a Music Royalty Fee per month.
November 12, 2009 — Gary Parsons resigned as chairman. He is replaced by Eddy W. Hartenstein, Los Angeles Times publisher and CEO, as non-executive chairman.

February 9, 2010 -- DirecTV removed all Sirius XM music channels and replaced them with offerings from Sonic Tap.
December 21, 2010 - Sirius XM receives approval from the FCC to begin adding service to Alaska and Hawaii; Sirius XM also announced on January 17, 2011 that it will place repeaters in those states and adjust three of its satellites to cover those areas. The move finally gives Sirius XM coverage in all 50 states.
January 12, 2011 - XM Satellite Radio, Inc. is dissolved and merged into Sirius XM Radio.

May 4, 2011 - Sirius XM announced that it will streamline its channel lineup with both Sirius and XM services sharing the same channel, with some exceptions.


February 19, 2007, the merger was officially announced to shareholders of the company. This came after many months of speculation by industry watchers. On February 20, an open conference call was organized between the top executives of both companies.
March 20, 2007, the two companies filed a "Consolidated Application for Authority to Transfer Control" at the FCC.

June 8, 2007, the FCC's Mass Media Bureau gave "Public Notice" that it had accepted the application for filing and started its informal six-month merger review clock. The notice also set a pleading cycle requiring comments or petitions be filed by July 9, 2007, and responses or oppositions be filed by July 24, 2007.
October 4, 2007, Sirius and XM satellite radio announced that both companies will conduct a shareholder vote. Sirius scheduled its meeting for Tuesday November 13, 2007, for shareholders to vote on the proposed merger. XM scheduled a similar shareholder vote in Washington, D.C., on the same date.
November 13, 2007, Shareholders of Sirius Satellite Radio Inc. approved the company's $5 billion acquisition of rival XM Satellite Radio Holdings Inc. 96% of Sirius Satellite Radio shareholder's votes cast approved the acquisition.

January 15, 2008, it was reported that the FCC expects to come to a decision in Q1 2008.

March 24, 2008, the United States Department of Justice Antitrust Division announced it closed its investigation of the merger of the two companies, citing no harm to consumers or competition.
May 23, 2008, FCC Chairman Kevin Martin said at a press conference that "the Commission could act by the end of the second quarter", which ends June 30, 2008. Earlier that week senators called upon the FCC to enact strict requirements on the merger such as returning some of the radio spectrum to competitors and open its service to all manufacturers of satellite radio players.


Because both companies will operate as one, this may reduce the cost of licensing the broadcast material. It will also almost certainly reduce the staff required to run the company. Also, programming can be spread out among the companies' combined satellite constellations.

If all of the non-duplicate channels are kept, this will result in more programming being made available to subscribers of both services.
New development
With only one company to develop products for, the new company can afford to spend more money to develop new products. So far, services have been developed which were not even conceived of when satellite radio was launched. XM and Sirius now carry satellite weather and traffic, and Sirius launched television programming in 2007. Likewise, it is expected that new technologies and products will continue to be developed and integrated in to the combined infrastructure of XM and Sirius Rad

Both companies were losing money before the merger, and were rumored to be facing bankruptcy. The company argued that merger was the way to avoid bankruptcy, and that bankruptcy would result in diminished competition for existing terrestrial radio and streaming services like Pandora.


Sirius and XM have both used star power to attract consumers. Howard Stern, Opie and Anthony, Bubba the Love Sponge, Scott Ferrall, Bob Dylan, Tom Petty, Ron & Fez, Broadminded, Bam Margera, Tony Hawk, Jason Ellis, Martha Stewart and Oprah Winfrey are among the stars that have signed contracts with one of the two companies. Exclusive sports programming (The National Football League, Barclays Premier League, Canadian Football League and NASCAR on Sirius and Major League Baseball, National Basketball Association, National Hockey League, PGA Tour, and Indy Racing League on XM) also drives consumers to one network or the other. Sirius and XM executives hope to lower the cost of this programming by merging; critics argue that the lowered cost will result in less total programming being made available. In particular, marquee sports and talk shows could be offered a la carte, similar to premium digital/satellite television tiers and out-of-market sports packages.


In Canada, Sirius Canada and XM Canada are partially owned by Sirius XM (20% and 23.3% respectively)  in joint ventures with Canadian companies. The two Canadian ventures have not yet agreed to a merger.Complicating matters is that Sirius Canada has nearly 80% of the total satellite radio subscribers in that country, and feels they deserve greater than a 50/50 split of the new company, whereas XM Canada feels that their deal with the NHL warrants a significant amount of value in the new company.

Even if the two Canadian systems combined, they still would not be able to provide the same channel line-up as Sirius XM in the US because of Canadian Content laws. The Canadian Radio-television and Telecommunications Commission (CRTC) and the Canadian Competition Bureau would have to approve any merger between XM Canada and Sirius Canada.


Sirius XM has been developing a software application for use on the Apple iPhone and Apple iPod Touch devices that will allow its subscribers and users of those devices to listen to its programming. An email from Sirius XM customer service began circulating the internet that said the application would be available in the Apple iTunes store on June 18, 2009
“ Thank you for contacting SIRIUS regarding whether or not there is a SIRIUS iPhone application available. We are here to help! We appreciate the time you have taken to contact us in regards to this matter! We are happy to inform you that beginning June 18th a SIRIUS Internet Radio application will be available at the Apple iTunes App-Store for the iPhone and the iPod Touch! All Premium SIRIUS Internet Radio subscribers will be able to download the application from the Apple iTunes App-Store for free on their device and access the service at no additional cost! Subscribers who are listening to the Basic Online Service for free must first upgrade to the Premium Online Service for $2.99 per month to access the application on the iPhone or iPod Touch.

Sirius XM has also developed an application for use on certain 3G enabled Rim BlackBerry smartphones. Much like its iPhone and iPod Touch counterpart, it features a restricted 120 channel lineup featuring most of the music channels and selected talk programming. As with the iPhone app, some select programming, including MLB® Play-by-Play, and SIRIUS NASCAR® Radio, are not available at this time on the Blackberry. However, NFL Play-by-play was added in late 2010, as before you could only hear the talk-oriented daily programming. due to licensing and exclusivity deals, some play-by-play is not avalible, such is the case for both MLB and NASCAR, both online rights being owned by Turner Sports Interactive.


On May 28, 2010, Sirius XM released an application for mobile devices using the Android operating system. It features the same 120 channels of commercial-free music, news, talk radio, sports talk, and entertainment channels as found on the iPhone/iPod Touch and Blackberry applications. In August 2010, the Froyo release of Android broke the Sirius XM application. Sirius XM has since released an updated client that works with Froyo.
Receivers
Currently, XM and Sirius use different compression and conditional access systems, currently making their receivers incompatible with each other's service, though both companies have guaranteed that existing receivers will be able to receive content from both services after the merger.

Executives from both companies have stated that XM and Sirius will continue to operate as separate services. Buying another radio to receive programming from the other service will be optional. However, a unified receiver that can receive programming from both networks would allow subscribers to listen to the entire range of channels. Interoperable Technologies, a joint venture of both companies, was formed in 2003 and announced such a receiver in 2006. Mel Karmazin has confirmed the existence and operation of the radio, "We have one. It's in my office." Karmazin's dual system radio can expect competitors—according to tech-site Gizmodo, Onkyo is entering the interoperable radio arena.
Subscriber growth is expected to slow significantly as consumers wait for interoperable receivers.

Currently, there are 9 satellites in orbit; 5 XM and 4 Sirius satellites. Each company also has a ground spare, of identical construction to its first generation of satellite. The most recent satellite is XM-5, which was launched by Proton on October 14, 2010.
There are no publicly available facts concerning the cross-compatibility of the satellites themselves. If it is possible to use XM satellites to propagate Sirius's signal, this would give Sirius immediate access to a second geostationary satellite, which would improve reception for stationary receivers, such as those at businesses and homes. In the long term, consolidating transponders on to fewer satellites will reduce infrastructure costs significantly: to build and launch one satellite can cost more than US$300 million, with a lifetime of approximately 15 years. Once the next generation of satellites is constructed and operating, combining satellite networks could result in a savings of US$40 million a year.

Sirius XM radio content is also available over the Internet, competing for listeners of Internet radio stations and other online music services. The Internet-only option is offered for US$12.95 a month and does not require a stand alone radio receiver or additional computer hardware.


Executive compensation
Executives who are not offered jobs in the new combined company are assured generous golden parachutes due to severance agreements approved in 2007.
Former XM Radio Chief Executive Officer Nate Davis had a severance package worth $10 million.
Gary Parsons, the former Chairman of Sirius XM Radio, received $9 million.
Erik Toppenberg, Executive Vice President of Programming for XM Radio, has a severance package worth $5.34 million.
Joseph Euteneuer, Chief Financial Officer for XM Radio, has a severance package worth $4.9 million.
Vernon Irvin, Chief Marketing Officer, has a severance package worth $4.5 million.