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Sirius Eyes Web Radio, Claims Gains At Retail

New York — Sirius Satellite Radio’s CEO Mel Karmazin told analysts last week that the company continues to examine new platforms to leverage its content, including Internet radio.

Karmazin, speaking at the Goldman Sachs Communacopia Conference, held here, said Sirius is examining partnering with an Internet provider and that it had been approached by AOL about 10 months ago. AOL since partnered with XM to offer an “AOL Radio featuring XM” service this summer.

Karmazin noted, “There are other competitors with AOL that are
interested in having content,” and added that Sirius’ new deal with Sprint,
rendering it the first satellite radio company to provide content to a cellular carrier, is “smart” and an “experiment.”

“It’s not costing us anything. It’s just a smart thing to do. I don’t see companies like [Sprint] getting into creating content. I don’t see them trying to get Howard Stern away from us. So if we have this content, we should, in my opinion, experiment with what we can do with it on the Internet and in cellphones,” he said. Earlier this month Sprint began offering 20 Sirius channels to the users of its PCS Vision service.

Another new area of focus for Sirius is rear-seat video. Karmazin previous mentioned that DaimlerChrysler will offer a Sirius’ video service for the car in 2007. The service is expected to debut mid-2006 for the car stereo aftermarket.

And Karmazin claimed Sirius is gaining in retail market share against competitor XM Satellite Radio based on a report by The NPD Group for the month of August, which placed Sirius at 45 percent of the market, he claimed.

A week earlier, at the Merrill Lynch Media and Entertainment Conference in Pasadena, Calif., Karmazin claimed Sirius’ plug-and-play receivers won the first and second slots in market share at retail during the second quarter, according to NPD, which confirmed the findings.

NPD placed the Sirius STARMATE and Sportster, both supplied by Directed Electronics, as the No. 1- and 2-ranked receivers in unit share, followed by the XM MyFi and the XM Roady2 receiver.

XM’s product marketing and distribution senior VP Dan Murphy disputed the findings. He told TWICE that XM had over 64 percent market share in the second quarter and a 56 percent market share at retail, or 71,000 more subscribers from retail sales, according to published figures by both companies. He noted that NPD data does not capture the entire retail market, excluding Wal-Mart, among other retailers. “Wal-Mart for us is a top five retailer,” said Murphy. He further claimed that NPD numbers did not capture XM’s two-for-one promotion on the Roady. “Our two-for-one promotion was so successful … that any statement other than that the Roady was the No. 1-selling satellite radio model in the second quarter would be incorrect.”