Sirius XM CEO Mel Karmazin: Contract Discussions With Howard Stern Continue
Satellite radio company eyes Spanish-language channel offers to target fast-growing Hispanic demo
NEW YORK - Satellite radio company Sirius XM continues discussions with Howard Stern about a potential extension of his contract, which expires at the end of the year, CEO Mel Karmazin said Thursday.
"We do not have any updates today," he said on his company's quarterly earnings call. He had previously said he was hoping to have more insight into Stern's future by the call.
Asked by an analyst about Stern's contribution to continued subscriber growth, Karmazin said Stern has been "a great partner" and helped drive a significant number of subscribers as a key part of the firms portfolio of channels, which taken together continue to attract new subscribers.
Karmazin at some point on the call also said given Sirius' strengthening financials, "we can buy whatever cotent we believe can drive listener satisfaction."
Karmazin on Thursday also expressed an interest in targeting Spanish-language consumers with its Sirius XM 2.0 product expected to be available in the fourth quarter of 2011. Using new technology that will boost the company's bandwidth by an estimated 25%, the product will allow Sirius to offer more content and more functionality, including more music and other audio, as well as data services, he explained. A bouquet of Spanish-language channels is one key opportunity, Karmazin highlighted.
"We have not done a good job at all" at reaching out to Hispanics, he told analysts on the call, pointing to satellite TV providers Dish and DirecTV as examples for companies that offer packages for that growing demo, while Sirius currently only offers Spanish-language versions of CNN and ESPN, as well as one Latin music channel. "This market is a huge upside opportunity for us," Karmazin said.
Sirius said Thursday it swung to a third-quarter profit as it continued to grow revenue, while controlling costs and didn't have a big loss for debt extinguishment as it did in the year-ago period.
The quarterly profit of $67.6 million compared to a year-ago loss of $151.5 million. Revenue rose 16% to $717.5 million from $618.7 million.
The company said its adjusted revenue set a record, and it raised its full-year financial expectations after previously boosting its subscriber guidance. Sirius now projects that adjusted revenue for 2010 will exceed $2.8 billion. It expects to end the year with approximately 20.1 million subscribers.
"Today we are stronger than ever," said Karmazin, reiterating that 2010 is the first taste of the kind of results that the company can bring in.
While he didn't comment before his earnings conference call on the state of contract talks with Stern, Karmazin also said in a statement: "We will continue to increase and diversify our content offerings with new shows, new celebrity hosts and specialty programming with fantastic appeal to new and existing subscribers."
Sirius ended the third quarter with 19,862,175 subscribers with net user additions of 334,727 in the latest period.