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Karmazin Speaks on iRadio, CES, RIAA

1/10/2006 11:50:00 AM Eastern

Phoenix — Sirius Satellite Radio CEO Mel Karmazin addressed a number of industry topics at a Citigroup conference being held here.

Karmazin told analysts that the new Motorola iRadio service launched at International CES last week should not be significant threat to satellite radio, at least over the next few years.

“I saw how there was AM radio and then TV came along, and it was supposed to hurt radio,” as was 8-track, CB, cassette and CD players,” Karmazin said, adding, “Our principal strength is that we are a content company and we want our content to follow you, whether you are in your office or walking along the street.”

Karmazin also noted that there are already thousands of radio stations available on the Internet.

The Motorola iRadio service uses broadband Internet and Bluetooth to deliver 435 commercial free music “radio stations” to cellphones. Users can also create “channels” using music in their personal collection, all for a $7 per month fee. The first iRadio phones are due in the second quarter.

Karmazin also explained the low-key presence on the part of Sirius at CES. “We spent $3 million less on CES than last year. The reason is we’re not looking for more retail outlets — we have 25,000 already. We learned with the S50 [portable Sirius/MP3 player], it’s probably better not to show a new product before it goes into the store.”

On the subject of satellite video for the car, Karmazin noted that Sirius met with Chrysler at CES and remains “committed to providing them with video in the rear seat of the car, something you’ll see in vehicles in 2007.” Sirius had previously announced a target launch date of mid-2006 for video service.

Finally, Karmazin said that negotiations with the Recording Industry Association of America on the fee Sirius pays for digital media will begin in the first quarter.

“Based on my conversations with people in the music industry, we will come to an agreement and they will get significantly more revenue than they are currently getting because our revenue is growing,” he said.

Karmazin’s statements were made during a keynote Q&A session at the Citigroup Entertainment, Media and Telecommunications Conference.