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The Bird Is Still The Word

Media technologies always take leaps. Sometimes it’s a leap into the stardust. Sometimes it’s off to the abyss. Satellite radio has been both places

MEL !!

Like all media technologies, satellite radio has its true believers. There are also those who wince at the thought. Slowly, and not without pain, satellite radio is getting a boost.

The pioneer of satellite radio is, arguably, WorldSpace founder Noah Samara. With proprietary technology and other people’s money he launched birds, assembled content and put satellite radio on the map. He also burned through a fortune, US$2.5 billion by one estimate. The WorldSpace service proved popular in Asia – largely India – and Africa. In October 2008 WorldSpace – by then renamed 1worldspace – was in US bankruptcy court. Buying up the debt was Liberty Media, owned by cable genius John Malone. According to several reports, the bankruptcy court will ‘clear’ the proceedings by Friday this week (March 5).

For a few years two satellite radio providers operated in the United States – Sirius Radio and XM Satellite Radio. Both burned through fortunes and, eventually, US regulators allowed a merger to prevent a complete collapse. The CEO of Sirius XM is Mel Karmazin, a highly respected US broadcast operator.

When Sirius XM was in the depths of its financial crisis Karmazin turned to the aforementioned John Malone for a US$520 million investment, in return for a 40% stake.

So it was this week that Liberty Media CEO Greg Maffei told financial analysts, reported by rapidtvnews.com (March 1), of intentions to “go global” with WorldSpace. In January WorldSpace operations in India and South Africa were effectively shut. Bird watchers continue to speculate on an eventual merger – probably not the correct term – of Sirius XM, Liberty Satellite Radio and various WorldSpace assets.

Europe could be the target. With very little difficulty orbits of one WorldSpace bird could be shifted to cover the continent. And, too, in some warehouse there’s a WorldSpace satellite still on earth.

The possibilities are intriguing. Sirius XM has receiver deals with all – repeat, all – automobile manufacturers. This is the singularly most important element, considering that original WorldSpace proprietary technology, now owned by Liberty Media and used by Sirius XM, is crucial for receiver development.

Add to all that Liberty Global’s European marketing footprint. Through three subsidiaries – UPC, Cablecom and Cellomedia – the company is the major cable TV operator in 10 European countries. 

To date, satellite radio for Europe has been oft discussed with little result. In 2005 Tèlèdiffusion de France (TDF) was in talks with SES Global and Alcatel about satellite radio. Ondas Media has taken steps toward a pay-radio satellite service but very tiny steps.

Sirius XM has a bit of an obstacle hanging over Mel Karmazin’s head. The company is publicly listed on the US NASDAQ exchange and, well, the share price has fallen below $1.00. After 10 days of this the exchange starts a process, which Karmazin can appeal, to de-list the stock. He has indicated some sort of reverse stock-split to take the price over the one buck threshold. The other possibility, now that we hear more from shareholder Liberty Media, might be a simple buy-out.

Believe me: Mel never loses.


See also...

Hot Topics - Satellite Radio


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