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First Mediaworks


Parsons: NAB Finds Combined XM-Sirius "Worrisome Competition"
LOS ANGELES -- September 19, 2007: Speaking about the proposed merger of XM Satellite Radio and Sirius Satellite Radio, XM Chairman Gary Parsons said he's been surprised at the "raw amount of dollars and the visceral nature of the opposition from the National Association of Broadcasters, given that they indicate that we're not a competitor, so they really shouldn't care."

At the Merrill Lynch Media & Entertainment Conference in Marina del Rey, CA, Parsons said the NAB's having "wrapped its headquarters" in an anti-merger banner -- the NAB in June hung a huge "XM + Sirius = Monopoly" banner on its Washington, D.C., office building -- shows that the NAB does indeed "have some interest." He said, "It is very clear that they view XM and Sirius as competition, and a combined XM-Sirius, they view as more significant, worrisome competition, and there's the visceral nature to try to stop it."

The NAB has said repeatedly that it opposes the merger because it would create a "government-sanctioned monopoly" that would ultimately be harmful to consumers.

Earlier in the presentation, Parsons noted XM's growth in factory installations by automakers, saying it will have about 30 percent penetration in new vehicles produced by its auto-industry partners by the end of this year and that he expects to see that figure grow by about 10 percent annually. He described the company's subscriber churn rate and its conversion rate -- a little over 50 percent -- for new-car buyers who have had a three-month free XM trial as "very stable."

On the topic of content, Parsons said, "We think we have the necessary programming that we want to have." He acknowledged that "name-brand talent" like Opie & Anthony is expensive but said XM is offsetting some of the costs by balancing the brand names with "much more inexpensive" homegrown talent and through syndication deals like those in place for Opie & Anthony and Bob Edwards.

Ad sales currently represent about 4 percent to 5 percent of XM's revenue, Parsons said, but the company hopes to ultimately move that up into the 10 percent range. He pointed out that most of the new channels XM is still adding are talk channels that include ads.

Later, in response to a question about what industries compete with satellite radio, Parsons called terrestrial radio an "able and capable competitor that is not going away." He said, "You will see the digital version of terrestrial radio will, five years out, have a fairly comprehensive availability. So that entire area will continue to be a very, very strong competitive area."


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