CEO will pay higher royalties for programming.
Sirius Satellite Radio CEO Mel Karmazin said that he would be willing to pay record labels higher royalties—if they are willing to offer the satcaster programming that is not available to terrestrial broadcasters.
In his keynote speech at the Morgan Stanley Global Automotive Conference April 12 in New York, Karmazin said, "We have done great things for the music industry," including broader playlists and song IDs. "We are also paying them, which is something that terrestrial radio is not doing. I told them if they would really like to get a big increase for what they are doing, they should take music off of terrestrial radio."
Karmazin further projected that dramatic revenue growth in the future will provide labels with more money in future years. Sirius has forecast that it revenues will reach $1 billion in 2007 and $3 billion by 2010. He accused record labels of wanting to “double dip,” claiming, "Not only do they want to benefit from our dramatic revenue growth, but they want their percentage to also go up."
The CEO revealed that consumers may face price hikes over the current $12.95 monthly subscription. "Our 43-cents a day that we are charging is a steal," he said, but predicted additional fees for real-time traffic services and video initiatives.
On the product front, Sirius will launch a wearable device this summer, an advance over its current S50, which allows users to record streams while docked, and play those recordings on the go. XM has already released a wearable unit that captures streams directly from satellite.
Karmazin also discussed a system allowing listeners to tag and later download songs on their PCs. That would require an alliance with an online download partner, such as XM has with Napster.
“We are open to doing something with partners, and we are happy to allow them to share in the revenue, or be the principal basis of that revenue, as long as we get a taste of it," he said.