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The Lefsetz Letter

Is Mel Sirius?

by Bob Lefsetz

Sirius is turning into a scary place.

Actually, I've got a problem with the outlet's basic PHILOSOPHY!

Sirius thinks satellite radio is just TERRESTRIAL radio with a lot more niches. Yup, there are a zillion STATIONS on Sirius, but they all have VERY limited playlists. Sure, maybe more broad than your average Clear Channel station, but they're FAR from the satellite ideal, as presently executed by XM.

Scott Greenstein told me this was all about LISTENABILITY!

He told me that that's the difference between Sirius and XM. On XM they play so much you hear something you don't like and switch the channel. Sirius only throws in the occasional curve ball. They've streamlined it for listenability. SO THERE!

Only one problem. This is a different game. The satellite outlet owns ALL the channels! What fucking difference does it make if you switch from current rock to oldies. You're still LISTENING! Hell, forget listening, you're still SUBSCRIBING! That's all that matters!

Well, that's all that USED to matter. Until Mel Karmazin moved to Sirius and announced he was ramping up ADVERTISING!

I guess you've got to be listening in order for advertisers to agree to pay. High prices at that.

So the game changes once again. Or, as Pete Townshend once wrote, MEET THE NEW BOSS, SAME AS THE OLD BOSS!

I don't WANT the boss to be the ADVERTISER! What's great about satellite radio is the boss is the LISTENER!!! I mean WHO is the company beholden to?

I mean if you want to give me the service for free, the paradigm shifts. But that's not the paradigm you're EMPLOYING! You want to fuck me in the ass and then have me PAY for it??

And WHAT the hell is up with the deal with Jimmy Iovine.

I can see it now. A programmer doesn't want to play an Interscope track.

Oops, it will never happen. It's not like you can work for Sirius and not know Jimmy's involved. So, unless the Interscope track positively SUCKS and no one else is playing it and it's not selling you're not even going to THINK about making any noise. You're just gonna spin it.

Not that it will even get THAT far. Under the aegis of doing his job, Jimmy's gonna call you up in ADVANCE! And hype you on his new stuff. And get you to play it. By giving you access to his stars. Wining and dining you. JUST LIKE IN THE OLD DAYS! But, now it's WORSE! Because the evil enemy WORKS FOR THE MAN!

And do you think Jimmy's gonna call up the programmer and tell him to add a SONY track??

Hell, even if Jimmy plays by the rules, which he's FAMOUS FOR (wink wink), how does this LOOK???

Once again, you're an indie label, and you're not on an equal footing with the majors. Once again, the customer, the LISTENER in this case, gets FUCKED!!

And then we've got Mel, who DECRIED satellite radio, going into the sphere and not LEARNING anything, but just trying to imprint the little he knows about a dead format on to the NEW format!!

God, makes you hope that WiMax hits in the next two years and WIPES OUT Sirius. Let karma bite them in the ass. They can't make it by serving the CUSTOMER better, so they're gonna use tried and true terrestrial radio policies to try and make their numbers. MAKES ME WANT TO PUKE!

Not that XM is princely. You might not remember, but XM HAD commercials on some music stations. They only removed them when Sirius looked like it wasn't going to go out of business. They had to COMPETE! Sirius's music channels were commercial free, there's had to be too. But, if Sirius adds more commercials, which KILLED terrestrial radio, could XM be far behind? Hey MEL! You did such a good job at Infinity, how come the whole fucking BUSINESS is dying? You milked it DRY! By NARROWING THE PLAYLIST AND ADDING TOO MANY COMMERCIALS! Now you want to kill a NASCENT BUSINESS? That doesn't even have any SIGNIFICANT INCOME??

The promise of satellite radio, the reason I love XM, is the broad PLAYLIST! They play stuff I know, stuff I don't know by BANDS I know and stuff I've NEVER HEARD OF!

God, the add list at the Loft on XM is longer than the COMPLETE ADD LIST AT SIRIUS!!

What the fuck is up with THAT??

You want to make the station so somnambulant that I fall asleep and am UNABLE to change the channel?

SURE I hear stuff on XM I don't like. But that doesn't mean they should stop playing stuff on EVERY station I don't like. They call that TERRESTRIAL RADIO!

God, it's as if Apple made an iPod that only held ten tracks. Nobody would want it.

Oops, almost nobody wanted the original MP3 players, which held fifteen tracks.

But THOUSANDS OF TRACKS? THAT'S a different situation.

I'm all about the music baby. I'm all about expanding the horizons. I'm all about using the technology to ENRICH LIFE, not line the pockets of fat cats.

And the way to line your pockets IS NOT to listen to Wall Street, as Karmazin does, trying to placate the financial community in some circle jerk, but to focus on the CUSTOMER! The person who BUYS the service.

Steve Jobs announced the iPod Shuffle and Apple's stock went DOWN! Did he then go and REDESIGN the fucking thing? No, he waited for Wall Street to catch up with HIM! Which only took a few days, after the street caught up with the REAL street, and then Apple's stock WENT UP! Higher than it had been ALL YEAR!

Hell, let's talk about Apple's stock going from the twenties to over seventy in a matter of months. Yup, Steve Jobs was an insular asshole and now he's a GOD in the eyes of the financial community? STEVE didn't change, THE STREET DID!

Steve Jobs is a visionary. Mel Karmazin is an incredibly hard-driving advertising salesman who used his skill to make money in the EIGHTIES!

But the eighties are history. It's a new century.

Hell, satellite radio would have FAILED in the eighties. Because terrestrial radio was still LISTENABLE! But times change. The public now demands something different.

Only a prick like Mel Karmazin, who intimidates people to perform instead of fostering an environment where they can THINK and CREATE, can miss the point so badly and single-handedly set about ruining a format before it even truly takes hold.

Sirius acquired an incredible amount of good will by adding Howard.

Unfortunately, they added Mel and he fucked it all up.

Bob Lefsetz, Santa Monica-based industry legend, is the author of the e-mail newsletter, "The Lefsetz Letter". Famous for being beholden to no one, and speaking the truth, Lefsetz addresses the issues that are at the core of the music business: downloading, copy protection, pricing and the music itself. His intense brilliance captivates readers from Steven Tyler to Rick Nielsen to Bryan Adams to Quincy Jones to EVERYBODY who's in the music business. Never boring, always entertaining, Mr. Lefsetz's insights are fueled by his stint as an entertainment business attorney, majordomo of Sanctuary Music's American division and consultancies to major labels.

While Rhino may occasionally disagree with some of Bob's opinions, we certainly agree with his right to state them. At the bottom of each column we give you, the reader, the opportunity to respond and we encourage you to do so. We will post select comments.


LET US KNOW WHAT YOU THINK.

A word about submissions: We post what you give us, so please don't include your email address or any personal info. Your comments reach Rhino, not necessarily the writer, so don't expect a reply from them (or us, see our help section for contact info). We gather and post your submissions in batches, so do expect a short delay. And don't get bent if we edit your comments. We probably won't, but we reserve that right.


Comments:

i bought sirius-radio and stock-because of howard. the music is pretty good as an added benefit. but, if they fuck it up with commericals and narrowing play lists, i will switch it off after howard, just like i do now with k-rock.
after one week listening i am enjoying the playlists, esp. garage-blues-first wave-and classic stuff.
i am a 54 year old married male.

I agree with you about XM's playlists. I love the depth and the fact that I'll hear songs I never heard before, and I can deal with the songs I don't like by going to another station. I think XM's challenge is to keep it fresh and not be sucked in by market research that might tell them they have to play Stairway to Heaven five times a day.

One of the best things about hearing songs you love on XM is that you don't hear them so often that they become stale. Familiarity breeds contempt and all that.

One reason I listen to XM much more than my iPod is discovering entire new genres of music. For example, I never heard bluegrass in my life before XM and I'd never know what bluegrass tracks to buy on iTunes. But I've become a huge fan of XM's bluegrass station and love their Sunday morning program "Gospell Grass" (and I'm not even Christian -- it's just great music).

Here's hoping XM never changes, or if it does change, that it EXPANDS its playlists more and more to keep radio a medium of DISCOVERY rather than of repetition. If I want repetition, I'll listen to FM radio or my iPod.

bravo bravo. hat is the insight i have been waiting to hear

I subscribe to XM and Sirius and had them both for over a year, and I agree with XM's programming strategy. Too many of Sirius' channels are simply too narrow to sustain a long-term listener base. Listen to the decades channels on Sirius. I guarantee that after a month, you will be pulling your hair out out of frustration of repetition. Thankfully, there are still some channels that don't do this, but not enough to keep me listening more than 10% of the time. The other 90%, I listen to XM. While the sports coverage is nice, it is not enough to garner a lot of subscriptions. Most folks buy satellite radio for the commercial-free music. The day that either satellite company adds commercials to their music, is the day I drop the service, and the stock.

Completely agree with the comments below regarding Stern. I tought it was such a huge coup to get himt to Sirius, but after awhile I came to the conclusion that his best days are long gone. His schtick is really tired now.

I'd like to be all about the music, but there will never be a medium that isn't ruined by people trying to make money. For the latest example, look at Napster, ruined. So, I'm wondering if Sirius can make me money. I hear alot of bad press, but I can't help but think that with Howard and Mel, it will be successful. Successful people remain successful and don't get successful for nothing. I guess I can buy a few shares and wait and see.

Sirius Disorder Channel 24. Plenty of variety for you

DOES CORPRATE ROCK STILL SUCK?!

I believe in many of the points Bob brought up. Sirius is going to HAVE to ad tons more advertising to pay for its "white elephant" deals (think NFL and NHL). They also overpaid dearly for Stern....he's simply past his prime. As for the guy who thinks Sirius's Blues and Jazz channels are better on Sirius, I think its the complete opposite. The only genres that Sirius does better in is "traditional" classic rock and hip-hop (I'm not a fan of hip-hop, but my kids are) , other than those I think XM kicks Sirius's ass in the music department any day of the week.

XM is also doing the smart thing, and nobody at the stock market is paying attention: They are getting all the technology/manufacturer deals that will integrate XM into just about every audio device. It's called connect-and-play, and it is the next big thing for satellite radio.

K.M.

Fuck Sirius, long live XM! Unfortunately, I love Howard Stern, but there's no way that I'm going over to that bullshit company just to hear him.

Rock on!

the sweet sound and words of clear success...........can we all just hope for format free radio with character...and open playlist flavor..........fido1

Bob's bottom line: keep advertising off satellite radio. I'm an XM guy and the lack of ads is what brought me in. Adding ads will drive me away. And yes, there are weird songs that pop out of "the Loft," "XM Cafe," and "Deep Tracks," but I find myself wandering over to the receiver to find out what I'm listening to a lot more than I go over to change the channel. Sirius got Howard Stern, XM got major league baseball. As a big baseball fan, I'm now an even bigger XM fan. Both services need to realize that, as paying subscribers, we are a lot more "invested" in what is going over the air. Advertising will ruin the pact between listeners and programmers. Don't piss in the punchbowl guys.
Morgan from DC

Plate of shrimp, Bob!

I was just reading in my local conglomerate-owned "local" newspaper in DURHAM, NORTH CAROLINA about how radio is tanking in the Profits Dept. Ha! ha! ha!

You're right, everyday, another person I knows gets so fed up, he/she buys a satellite radio reciever.

It's all because radio stopped serving our NEEDS and catered to solely the needs of advertisers. You know what? Even advertisers used to know better.

Me? I listen on-line to wfmu.org but it's hard driving around with a cable stuck to your car.
thanks
Tony Madejczyk

Sirius is still better, and you need to lay off the codine..

I think you're paranoid. There are no current plans to have advertising on Sirius' music stations. I'm not saying it's never gonna happen, but definitely not in the near future. The advertising that's been talked about is for the Talk stations, like Stern's upcoming new show. And I think each of the satellite services has to hit at least 10 million users before advertising becomes viable. Remember that if 10 million users are divided by the 100 channels equally, that's only 100,000 average listeners per channel. If each listener listens 5% of the week (and that's a lot), that's only 5,000 average listeners per channel at any one time. That's not enough to sustain an advertising sales force - those are public radio numbers.

Also, I have Sirius at home and when I rent cars, they usually come with XM. I grew up in the era of free form progressive rock radio and that's still my favorite radio format. Having said that, I find Sirius far superior to XM, but it definitely depends upon which station you're listening to.

Certainly their Vinyl channel does concentrate on the hits and that's a disappointment. But IMHO, the Blues, Sirius Disorder, and Jazz channels are far superior to anything found on XM. In fact, Sirius' Matt Abramovitz, who programs the Jazz stations, is considered to be one of the top 25 most important people in Jazz today.

I know a few people at Sirius and from what they tell me, Karmazin has had no involvement so far in the day-to-day programming. He's working on big strategic deals, licensing, Howard, marketing ventures, OEMs, etc.

While I hate what Karmazin did to terrestrial radio, I think even he's smart enough to realize that if he recreates terrestrial radio on satellite, it will fail miserably.

You think Sirius acquired an "incredible amount of good will by adding Howard". I'm not so sure that was a great move, in spite of the publicity it has received. Considering the size of Howard's contract, it's hard to believe that even a substantial increase in listeners will even come close to paying for his show. Howard, while garnering good ratings when compared with competitive radio stations, still only gets about 5% of the market. And his career certainly peaked a long time ago.

My fear is that by hiring Howard, Sirius might decide it has to address the lowest common denominator in the market. Targeting that market is what has destroyed quality terrestrial radio. If that's what satellite radio decides to go after, it will destroy itself as well. My hope, is that with upwards of 100 stations on each service, they'll always be room for five quality channels. That's all I need.

very interesting

fuck, shit, and oh yeah, hell with it!

sirius rules, howard rules, radio totally blows donkeys. especially in small markets where i live. howard will continue to be successfull, and the rest of you will be jealous. fuck all you haters!!!! i hope terrestrial radio dies. think of sirius for radio as direct tv is for free t.v. they all can coexist. i'm a 32 year old stern fan. bababooey to you all!!!!!

Disregard the Siriot post up above. He/she compares Sirius to XM based on listening he did when he rented a few cars...B.S. He later goes on to reveal he knows a few people at Sirius. Can you say biased? Let me guess your buddies are also handling Ad Sales.

this is the worst write up ive ever read. Sirius' playlist is fine the way it is! i like tuning to 1 channel and not having to change it every other song. xm plays a lot of b-side crap that noone wants to hear.

i got xm in 2001 when they first launched and cancelled after 6 months. their rock channels suck ass. when i listened to sirius for the first time it was a breath of fresh air. ive been a sirius sub since 8-02.

in 11-05 i purchased a new gmc. it came with xm free for 3 months. so i gave xm another listen. 4 years later and they still suck. they advertise on every single music channel and it gets annoying. i got tired of the 1 minute "XM commercials" in between every other song. plus i found myself constantly changing the channel.

if you want great music you grew up listening to and can jam along with it while driving, pick up sirius. if you like to hear crap you've never heard before with plenty of "XM commercials" to make you crazy, get xm. by the way xm has no exclusive content. you can get xm for free on aol, directv, and now orphan and anal are free on free fm. not to mention the 4 channels on xm that clear channel owns that get syndicated on fm for free.




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