Sirius XM offered a few more details on its 2.0 satellite radios due at the end of 2011 for the aftermarket.
CEO Mel Karmazin said that 2.0 service will require new radios to get the full benefit of the new service, but it won’t obsolete the old radios.
Through new technology, Sirius XM will be able to expand its bandwidth by 25 percent to create a new 2.0 service. It will add more music and data services. Sirius may also add a suite of Spanish channels.
Karmazin also promised new and easy to use radio features centered around “convenience and personalization.” The company said it hopes the service will lead to more aftermarket sales.
Sirius XM is also now running a 2 minute TV commercial offering its new Snap car radio for $50 including one month of free service.
On a conference call with analysts, Karmazin also addressed the issue of competition with Internet radio.
In a nutshell he said that Internet Radio is another competitor, just like terrestrial radio.
“I don’t see wireless Internet Radio having more impact on us that terrestrial radio has had. If you think about it, how will Internet Radio generate revenue in the car…presumably it’s through subscription fees or advertising. I challenge anyone to show me any Internet company or collection of companies that provide the depth and breadth of content that we do at the same or better price point.”
Also if Internet Radio chooses to monetize through audio ads, then it will be no different than terrestrial radio, he said. And Internet Radio will face limitations now that wireless carriers are putting caps on data usage.
Currently Sirius XM has a 15 percent share of radio and Internet Radio has a 5 percent share. Terrestrial radio has an 80 percent share, Karmazin said.
Source: Sirius XM
Photo of Mel Karmazin via WSJ
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