Who Comes First, The Customer or the Business Itself? 26 comments
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This gets down to the classic argument about whether a company should do what is right by the consumer first, or what is right by the company. In an article published by John Paczkowski of All Things Digital, he seems to be critical of the company for making moves that have alienated some subscribers because they have lost their favorite channel in a recent channel shuffle in satellite. The changes were brought about because of the merger.
Paczkowski is critical of this comment by Karmazin:
“We’ve gotten hundreds of people who hated it and claimed they were going to cancel. So we’ve analyzed all the cancellations since the rationalization…. If we took the most aggressive number of people who canceled and we take away the $120 a year they pay, it doesn’t get to a $1 million as compared to the significant amount of cost savings as a company that needs to make money…. You as a subscriber, though you may miss your channel, need to make sure we make money because you want us to be around so we can invest in programming and we can provide you with all these services.”
Certainly if you are a consumer, you will be irked by the comment. However, if you are an investor, such news would be welcomed with open arms. 8,000 cancellations at a cost of less than $1,000,000 to realize substantial savings in duplicate content, duplicate program directors, duplicate DJs, and duplicate supporting staff.
Given the numbers, I can’t blame the company for making the move. While fans of specific channels may be upset, there is a fine line between the types of programming a company such as Sirius (SIRI) and XM should put on the air vs. additional programming that acts like a “loss leader” (a program that costs the company money relative to the revenue they derive from it).
With Sirius’ music channels, there is no advertising revenue. This means in point of fact that each and every music channel actually costs the company money to broadcast. The hopes of the company are that enough subscribers will pay a monthly subscription fee that will at least offset the programming costs and hopefully deliver a profit. The problem is that the company has never made a profit. Thus, changes need to be made.
Paczkowski takes Mel’s comments to mean that the channels are gone forever, and that consumers should pony up the dollars to the company even though they do not have what that particular consumer wants. I disagree. Mel was being pragmatic. He was basically stating that he needs to get the company to profits before allowing for the luxury of more niche type programming that has a smaller audience. In other words, when the company is profitable, they will better be able to consider additional programming. A long term investor actually hopes for the day that a “wind chimes” channel exists.
This is not to say that Sirius and XM weren't budget conscious a few years ago with some of the high priced talent they brought on. Indeed, they were. Part of the reason was the competitive landscape, and another part was that they needed to bring in big names to spread the word. Rest assured, now that the bottom line is a bigger focal point, some of those big names will fall by the wayside. Maxim Radio is no longer a deal that costs money. There is no longer a Maxim channel. Instead, it is a show, and the dollars going out the door to Maxim no longer exist. XM made a similar move prior to the merger in their deal with Starbucks (SBUX). The branded channels cost the company money.
There are those that are critical of Mel for not saying anything, or saying things that frustrate one person or another. Get used to it. The days of trying to satisfy everyone all of the time are gone. The company needs to make money. Satellite radio is many things, but it simply can not be all things to all people and continue to exist. The growing pains need to happen. Investors have had to bear the burden, now some subscribers will as well. It simply needs to happen.
Sirius XM Radio needs to get leaner to get stronger, and that is what is happening. The survival of the medium is at stake, and even without your favorite channel, odds are that the service is still better than the alternatives. Like it or not, satellite radio has to have a better mass appeal before it can add back some of the less popular programs.
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This article has 26 comments:
All of the company's focus should now be on its most important issue; the debt refinancing
Sirius should be focusing on radio personalities, because they provide CONTENT on a regular basis, that is people who can do radio and bring in subscribers as a result of their shows. Clearly they should no longer be in such a rush to throw money at names, does anyone think that Oprah or Martha Stewart has earned their money? These contracts should not be renewed period.
What we have learned over the past few years is that sat radio provides content and that men have embraced it, and the male listeners have become loyal to the shows that they are into or the sport of the season. In addition we have also learned that Howard has brought millions of subscribers to sat radio and in the end his deal was justified to get this media out into the mainstream, but Howard is getting long in the tooth and at some time we will have to envision a world without Howard, at least on a full time basis; clearly Sirius isn't getting this point. They have done nothing to prepare for this, there is no one who can take his place...unless they start now.
1. Sign Bubba NOW and promote him and build around him. He is a proven radio host who can get ratings on his "free radio show" and he keeps adding markets. there is no one on free radio who is a winner like Bubba, and we have him uncensored and on the loose building fans everywhere for SiriusXM. This is a guy who can more than pay his own way and be a profit center within SiiriusXM
2. Sign Kid Chris out of Philly. He is young and aggressive and can build a large subscriber base. He also has talent.
3. give Chuck Zito a regular air shift. He has developed a cult following and he deserves a regular gig and his show is really good and then go promote it. Even more important he wants to work. And he can promote Sirius XM everywhere, especially in Vegas, California and Atlantic City.
4. Get input from Bubba and Howard on some radio people and give a new guy a chance. Put him on at night at 8:00 and let the new guy rock.
5. Get Hogan to do a one hour show after Bubba. He wants to work and would love to be on SiriusXM
6. Give these guys their own channel and let them rip, just leave them alone
7. Move the virius channel so its closer to the two Howard stations and the Bubba channel, advise O/A that their free radio ratings aren't so hot (1.9) last book in New York and that their show on Sirius maybe their last stop. Then get them out there to promote their show and get subscribers.
8. get these channels all in a row and let them go and ad rates should go up and we will all be better off as stockholders and listeners too.
Now they want to water down the music channels with the classic Sirius repetitive airplay of the same songs on a more narrow channel selection and tell the consumer "Tough."
Ha!
How about giving up that company-back-breaking paycheck, Mel? How about dumping the book crushing burdens like Martha Stewart (I've never met a person that ever listened to her radio show) and Howard Stern (a half-a-billion dollars? Who is the idiot that offered Stern this golden deal?? - Oh.)
The MUSIC CHANNELS were THE DRAW for most subscribers... and Mel has ruined that, and in that, may have destroyed the company... because it will be awfully hard to rebuild that trust between company and consumer again... especially with the XM subscribers who feel they have been cheated the most. (Oh man, these Sirius DJs even talk over the intros of songs like common FM morning zoo Clear Channel clowns!)
GM, Ford & Chrysler thought they could crank out any product they wanted to and not care about what the consumer wanted... and they thought they consumer would HAVE to buy it. They found out wrong too, didn't they? If Sirius XM thinks they can do the same thing, then satellite radio will not survive what ever the next technology is that comes out. Satellite radio will join the Sony Beta VCR as a mismanaged technology. You MUST produce what the consumer will buy. THAT IS THE BOTTOM LINE TO A BOTTOM LINE.
Investors... look for the financial turmoil to deepen under this completely out-of-touch management. Subscriptions will have a small Christmas pop, but will spiral again after the 3 free months is over.
Tyler... don't take this too hard, but consider distancing yourself from the Mel brand... or you may not have any readers very soon either. Siriusly, dude.
I went ahead and canceled Sirius because the music programming was pathetic and repetitious. The XM programming was far superior to Sirius. It only took hearing the same song played 2 or 3 times in one day for 3 consecutive days (plus a bad radio unit) to figure out this was just Clear Channel pay-per-hear... and that is not worth anything.
I also have DISH Network, so I have access to Sirius, and if I want to see if my watch is correct... I turn it over there to synch it up with their stale, predictable and repetitious daily play list. Thankfully it's a very good watch from a company that is still in business because it cared about what the consumer wanted... so I don't have to check it very often.
Give a channel to Chuck Zito???!!! Are you joking? That show is as unlistenable as that "wiseguys" show on Raw Dog. Of course, he might kick my ass for not listening.....
If there is nothing worth listening to on satellite radio... then there is no reason to subscribe. There will be no difference between terrestrial radio and satellite radio if they both have the same stale musical programming. Think about it a moment. Why do you think XM subscribers are so upset?
I am glad you are so easily entertained with the same ol' songs, day after day, month after month, year after year. Good for you. Hope that works out for you in keeping your life dull, uneventful, predictable and mundane.
When Sirius XM turns to putting commercials on their dull, boring, lackluster music channels to supplement their failing policies and programming... I hope you enjoy those too.
You see, people like you quite obviously did not have XM, and do not understand how good it was to the music listeners. Sure, they played songs we didn't like from time to time... but it might be a long time before they played it again. In stark contrast, Sirius would force that same song upon you several times a day, and sometimes even on several channels. They are doing it right now.
Now, one statement you make is awfully suspicious... you say who is right... you and the experts (pause for the laughter)... who made the decisions. Either one of two things... (1) You are delusional if you are a subscriber and think you make any of the decisions, or (2) You are a Sirius plant just making slams against subscribers... which wouldn't surprise me since Sirius is not worried about what subscribers like me (actually a soon-to-be former MULTI-subscriber) think... they instead are more worried about themselves.
Incredible.
Maybe they can take their unemployment money and pay the bill since they don't want my cash.
Sirius XM is in deep trouble and upsetting customers to the point they will cancel is not very good leadership from the execs. And... it's very, very bad business in today's economic climate.
Many good points, but as you know I still think this median has great potential.... The real advertising for the service, highlighting features will probably occur when they have a truly interoperable device, with ala-carte programming available, and the kinks worked out on their content moving forward. I totally agree most of their moves in subscriber growth has been "event driven".
to the article:
The problem with using the number 8,000 subs as an acceptable loss of less than $1 M, is that the dispersion or “scatter effect” of the loss has not been considered. The unintended consequences of a decision that says 8,000 subs is OK doesn’t take into account who they tell about their negative experience. They tell two friends…. and so on.
I agree that “niche” programming is at a cost, or a loss leader, but maintaining the “Content is King” reputation is important also. Trimming marketing cost to save money is already apparent, leaving word of mouth as an important subscriber growth component to the future. This company already is behind on the “Cool” effect, with its limited portable player lines, giving a wide birth to the Ipod.
A perfect example of cult media bringing in subs is Howard, so pissing off the loyal faithful is just not a good idea. Even the small vocal minority can cause a very loud disparaging noise. If the company marketed better they could easily overcome the scatter effect of a few, but marketing of their product nationally is almost completely absent.
What are your the S. Alpha poster cop..... detective of all those Sirius plants wasting their time responding to your BS, whining, blah blah.... Get real........
Damn... you turn this into a common Yahoo chat room.
Suggesting that Mel should work for nothing is also outrageous.... he makes 1.25M per year plus options and bonus. The options are worthless and no bonus has been paid for 2008. Your simply a basher of the service....
And being a STOCKHOLDER AND... A MULTI-SUBSCRIBER... I HAVE EVERY RIGHT TO MAKE A COMMENT ABOUT ALL OF THOSE POINTS.
I don't care if you don't like it... and I don't care what you think.
I suggested Mel take a paycut just like the CEO of Ford offered to do (if you happened to ever pull your head out of Mel's ass and watch the news). If saving the company is so important to Mel... it is the least he could do. And after what he has allowed to happen to the programming... it would be the best thing he could do.
You don't understand, just like Mel doesn't understand... why would a customer pay for something that he isn't satisfied with? If satellite radio isn't any better than terrestrial radio... why subscribe? If the play lists are the same... why subscribe? If you hear the same songs every single day... why subscribe? If there is nothing exciting or exclusive about satellite radio... why the hell subscribe?
I'm not asking a mental midget like you to try to wrap your narrow mind around such an outrageous concept. You are the poster child for cattle people... those with no mind to think other than to eat what ever crap you are fed.
Whether you like hearing it or not, this merged company is as bad as terrestrial radio because it is being run like a terrestrial radio company by a guy who is steeped in terrestrial radio. If management does not change, you can count on commercials coming to Sirius XM music channels, because that is the terrestrial radio way of revenue. Watch subscribers fly out of there when that happens.
I find it very peculiar that you and Mel don't understand that if the consumer isn't getting what he is paying for then he is going to quit paying for it and spend his dollars somewhere else to get it... which means your company is losing even more revenue and diving even deeper into peril. And it is downright dumbfounding when all you got to do is play a greater variety of songs, by what... pressing a button?? You and Mel are the only people that want to hear the same songs every day for the rest of your life. The rest of us do not. Why do you think we subscribed and kept our subscriptions current for so long with XM?
Use this link to find out how many times a day or week or any period of time that Sirius XM plays the same song over and over on any channel with any artist.
dogstarradio.com/searc...
Type in anybody you can think of... and you will see the repetition in the play list. Click on any channel to see their play list... you will see the repetition. It's the same songs all the time every day! You can just about set your watch by when they are going to play a certain song every day! Sirius XM is programming for the lowest common denominator, just like terrestrial radio... and that way is just dull, boring and outright lame.
It just wasn't that way with XM. And THAT... is what you cannot understand.
You should just go back to the Yahoo chat rooms... it suits your understanding and temper better. It was you who bashed me first and didn't even make a comment about satellite radio when you did it... and that is classic text book Yahoo chat room learning. Please, and I mean this in the kindest way I can say it... buzz off. Thank you.
You said:
If management does not change, you can count on commercials coming to Sirius XM music channels, because that is the terrestrial radio way of revenue. Watch subscribers fly out of there when that happens.
Did you figure that out all by yourself?? If and when, the revenue model changes to a terrestrial model, advertising revenue driven by commercials, subscribers (a subscription model) will leave. I can't disagree with you there, but it doesn't have to be all or nothing. The "commercial model" might be a good "Teaser" model for all of those deactivated radios out there. It doesn't have to be one or the other. Listeners could be tortured with commercials on "Free" sat rad on deactivated units, while some of the commercials they hear tell them about the "commercial free" option that they can have for $6.50 a month. This "Bridge" offering can generate additional revenue with the advertising sold, and also offers a low cost (SAC) way to generate new subscribers to the premium subscription services.
From what I can understand, never having been an XM subscriber, but being an avid Sirius subscriber with 4 units on a family plan, there is more dissatisfaction with previous XM subscribers than with Sirius. I really can't blame them, now having to pay extra for what Sirius subscribers get with their base subscriptions. Howard, NFL, and Nascar are included for 12.95 as a Sirius Sub but are $4.00 more as an XM sub. In addition as a Sirius Subscriber, MLB wasn't initially included in the B of B, and that's the only reason I personally would want anything extra from XM. You say the music programming was better on XM and I say that is a matter of opinion, of which I have none. I can't fairly compare and I can't miss what I didn't have.
Your over dramatic writings of the merged companies demise, with the new merged programming and prophecies of commercial programming, is over the top. You see commercials and the new programming as the end and I see commercials as a way to generate revenue while providing non subscribers with a taste of what they are missing. Throw in some commercial free weeks and weekends, and I see increased revenue at a reduced acquisition cost.
The company is in a restructuring period of which, as an investor, I have more concerns than as a consumer of its product. The final "Brand" will have many offerings to satisfy as many consumer tiers as possible, but might fall short of satisfying someone who just cannot be pleased.
---------If you hear the same songs every single day... why subscribe? If there is nothing exciting or exclusive about satellite radio... why the hell subscribe?
I'm not asking a mental midget like you to try to wrap your narrow mind around such an outrageous concept. You are the poster child for cattle people... those with no mind to think other than to eat what ever crap you are fed.-----------
The only crap being fed here is what you are trying to state as fact. Terrestrial Radio = Satellite Radio. Even if the play lists were the same, and they are not, it would take satellite radio about 2.5 hours to play 8 hours of Terrestrial Radio's play list. Guess what you would be listening to the 5.5 hours? You are an investor and a subscriber and yet you are this dissatisfied and still subscribe. Why??
You talk about the Yahoo boards and you come with their same retaliations... mental midget, narrow mind, poster child for cattle people, ( I prefer Sheeple myself, but again that's just a matter of taste).
You say that Mel and I, ( I'm flattered to be included in such company), want to hear the same songs every day for the rest of our lives. That assessment is just sooo wrong. As a subscriber to Satellite Radio, I have discerning tastes and seek variety in my music choices, which is why I subscribe. The range of music spectrum available (genres), and the depth (titles & artists) available within each channel's programming, is available on satellite radio and nowhere else. So continue with your Yahoo board nonsense if you like, or give me something that is concrete to support your complaints other than a song count, that suggests Sat Rad = Terrestrial, or STFU.
The ONLY reason I initially subscribed to XM (and Sirius for a short time) was due to the commercial-free music. Coming from your commercial-leaning background, you can't begin to understand how much I abhor and loathe commercials. Nothing changes the channel faster than commercials... and I point to the success of the DVR & Tivo to prove my point.
Your model of free satellite radio chocked full of commercials advertising for commercial free radio is full of advertising hypocrisy. It makes no sense. Why? Because even if they did... if the paying subscribers had to listen to the same repetitive play lists... why pay for it? If you are a not a discerning listener... there is no incentive to pay for the same programming you are getting for free. And if you are a discerning listener (as myself), you are not going to pay to hear the same song every day.
XM was a far superior programming outfit compared to Sirius. At least we do agree on that... as based on the acknowledgement by both of us that XM subscribers are very upset, and demonstrate via the Sirius play list at dogstarradio.com just how repetitive Sirius is.
dogstarradio.com/searc...
You must recognize that there must be some subsistence to the complaints if so many are saying the same thing I am saying.
Consider this... I have had DirecTV, and I have had DISHNetwork. If I switch between the two, I notice very little difference since they offer nearly identical programming (which is also what cable offers... the point is... they really are identical in essence). But let's say one of them offered ESPN, HBO and the local network channels... and the other provider offered only Fox Sports, Encore and local public access channels. Continue that they merged and now only offer Fox Sports, Encore and public access, and ESPN, HBO & local networks virtually were thrown out. How upset do you think the subscribers (re: me & many more) of the former ESPN, HBO & network provider would be? The Fox Sports, Encore & access channel people (re: you & Mel) are standing there saying, "I don't see the difference".
Now, just because you never had XM, err... ESPN, HBO & networks... does that make you right to say there is no difference? No. You can try to argue that well, you've got a sports channel, movie channel and local programming... but you are arguing from ignorance. They are not the same. One is superior and the other is inferior. And that is what we have with this new satrad merger.
I can cut you some slack that you don't know the difference, but only to the point that you must stand by why the rest of us discuss it from experience. These are the true, honest and factual feedbacks from those of us who know. This is how we feel about the programming demise. And yes... it does matter to the health of this company if I am unsatisfied and discontinue my subs. If you mock and attack that feedback, you are doing so from ignorance.
As far as Howard and NASCAR... big deal. Who cares? I'd say there are some, but not me. NASCAR is just like commercials... I steer clear. And Howard just doesn't have the same feel since there are no FCC battles to fight. He won... he's off the public air. They won... he's off the public air. And this comes from an avid listener of Howard for about 15-20 years, right up till they day he left terrestrial and right on thru for several weeks after he appeared on Sirius. I found myself changing the channel out of boredom of his Sirius show.
The NFL is the only thing that might interest me... but only in the slightest.
So yes... I do see commercials over content as an end to satellite radio. If you couple it to the high level dissatisfaction of repetitive airplay... it will be buried when the 'next big thing' comes out... like Wi-Fi radio, for example.
I am amazed that as a stockholder you are against the consumer who drives the sales and subscriptions which in turn controls the value of the stock, especially when the solution is as easy as pressing a button to play a wider variety of songs.
Please, name an artist... name a song... name a channel... I challenge you. I will show you either how narrow, or how repetitive, or how narrow AND repetitive Sirius is in their play list with any artist, song or channel. Do it.
Also, if you are referring to me, or millions of other XM subscribers as someone who can't be pleased... then again, you are wrong, as we were very pleased before the programming change and never considered canceling, because we know from experience.
dogstarradio.com/searc...
From the Sirius 23 Hair Nation that replaced XM 41 Boneyard
Band: Quiet Riot
Quiet Riot's "Metal Health" Sold 6 million copies and Sirius only plays 3 songs from that album?
"Condition Critical" went Platinum. Sirius plays only 1 song?
Dec 1st
Metal Health 12/1/2008 8:51:26 PM
Cum on Feel the Noize 12/1/2008 5:42:16 PM
Mama Weer All Crazee Now 12/1/2008 1:30:46 PM
Slick Black Cadillac 12/1/2008 11:36:08 AM
Cum on Feel the Noize 12/1/2008 4:54:26 AM
Dec 2nd
Cum on Feel the Noize 12/2/2008 11:07:48 PM
Mama Weer All Crazee Now 12/2/2008 9:00:21 PM
Cum on Feel the Noize 12/2/2008 9:16:58 AM
Dec 3rd
Metal Health 12/3/2008 3:18:21 PM
Slick Black Cadillac 12/3/2008 3:20:45 AM
Metal Health 12/3/2008 1:01:13 AM
Dec 4th
Metal Health 12/4/2008 10:56:22 PM
Cum on Feel the Noize 12/4/2008 8:21:32 PM
Slick Black Cadillac 12/4/2008 6:31:27 PM
Metal Health 12/4/2008 5:15:24 AM
Cum on Feel the Noize 12/4/2008 2:22:41 AM
Dec 5th
Metal Health 12/5/2008 10:39:57 AM
Cum on Feel the Noize 12/5/2008 8:53:55 AM
Mama Weer All Crazee Now 12/5/2008 3:17:51 AM
Dec 6th
Slick Black Cadillac 12/6/2008 11:15:45 PM
Cum on Feel the Noize 12/6/2008 9:23:22 PM
Metal Health 12/6/2008 1:24:08 PM
Mama Weer All Crazee Now 12/6/2008 7:44:18 AM
Cum on Feel the Noize 12/6/2008 6:00:21 AM
Dec 7th
Metal Health 12/7/2008 4:58:41 PM
Mama Weer All Crazee Now 12/7/2008 2:59:45 PM
Cum on Feel the Noize 12/7/2008 11:31:38 AM
Dec 8th
Mama Weer All Crazee Now 12/8/2008 7:11:18 PM
Metal Health 12/8/2008 7:12:32 AM
Cum on Feel the Noize 12/8/2008 3:43:36 AM
Dec 9th
Mama Weer All Crazee Now 12/9/2008 10:08:04 PM
Cum on Feel the Noize 12/9/2008 1:13:50 PM
Slick Black Cadillac 12/9/2008 6:31:04 AM
Metal Health 12/9/2008 3:06:59 AM
This is just one artist from one genre... you can do this with any.
Try it yourself.