Sirius Satellite Radio CEO Mel Karmazin shot down ideas Wednesday afternoon that he would sell satellite-radio channels on a per-channel or a la carte basis if Sirius is allowed to merge with XM Satellite Radio.
Testifying before the House Judiciary Committee antitrust task force on the $13 billion merger, announced last week, Karmazin said a la carte wasn’t feasible for technical and financial reasons.
Asked if he would sell programming on a per-channel basis by Rep. Chris Cannon (R-Utah), who wants to see cable companies go a la carte, Karmazin ruled it out.
“We do not believe so, for lot of technical reasons,” Karmazin said. “There is no set-top box in your vehicle that has a radio in it, so the idea of having a back channel to be able to tell that radio exactly which channels are there becomes problematic.”
Karmazin’s answer could hurt his effort to get the merger passed the Federal Communications Commission under chairman Kevin Martin, who has pushed the cable industry on a la carte in an effort to help consumers lower their monthly bills and exclude indecent content without having to pay for it.
Sirius is the pay-radio home of shock jock Howard Stern, whom the FCC heavily fined for violating indecency rules while working in free radio.
Karmazin moved in Martin's direction some by indicating that he would be willing to provide multiple programming tiers, with each one priced below the $12.95 monthly price that XM and Sirius subscribers currently pay for access to all channels. Doing so, he noted, would cost the newly created company revenue.
“We have the technology,” he added. “We have the ability to do ... a tier. We have the ability of offering a number of bundles.”
Karmazin seemed reluctant to wander from his industry’s simple pricing and packaging structure.
“We know that you have heard from your constituents on the high cost of that cable-TV bill or that satellite bill,” he added. “We haven’t found one person who is saying that $12.95, or 43 cents per day, is too high a price. But you know what we are saying? We’ll make it lower.”
Sirius announced Tuesday that it added 2.7 million new subscribers in 2006, bringing its total customer base to 6.02 million.
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