Radio Currents Online - Feb 19 - Feb 25 2007

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Radio Currents Online - Feb 19 - Feb 25 2007

Feb 19, 2007 9:00 AM


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Sirius and XM Plan to Merge
Washington and New York - Feb 19, 2007 - The rumors are coming true; XM Satellite Radio and Sirius Satellite Radio have entered into an agreement to combine the companies in an all-stock merger of equals. The combined value of the merged company will approximately $13 billion, which includes net debt of approximately $1.6 billion.

XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM they own. XM and Sirius shareholders will each own approximately 50 percent of the combined company.

Mel Karmazin, currently chief executive officer of Sirius, will become chief executive officer of the combined company. Gary Parsons, currently chairman of XM, will become chairman of the combined company. The new company's board of directors will consist of 12 directors, including Karmazin and Parsons, four independent members designated by each company, as well as one representative from each of General Motors and American Honda. Hugh Panero, the chief executive officer of XM, will continue in his current role until the anticipated close of the merger.

The jointly issued press release touts that the merged company will be able to provide additional choices in program offerings, develop and introduce a wider range of lower-cost listening devices, and in general create a more competitive audio entertainment outlet. In addition, the companies state that the merger will "enhance the long-term financial success of satellite radio by allowing the combined company to better manage its costs through sales and marketing and subscriber acquisition efficiencies, satellite fleet synergies, combined R&D and other benefits from economies of scale."

Terrestrial broadcasters will find comfort in this statement from the press release: "In addition to existing competition from free, over-the-air AM and FM radio as well as Ipods and mobile phone streaming, satellite radio will face new challenges from the rapid growth of HD Radio, Internet radio and next generation wireless technologies." While terrestrial radio stations are concerned about satellite radio stealing their audiences, satellite radio has the same concern.

Karmazin has been open about the possible merger and calls the merger "the next logical step in the evolution of audio entertainment."

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. If approved, the companies expect the transaction to be completed by the end of 2007.

Editor's insight
By Chriss Scherer, editor
Since the introduction of satellite radio, Radio magazine has predicted that the market will not likely support two satellite radio providers, and that a merger or buy-out attempt would not be unexpected. As the companies have announced, there are regulatory hurdles that must be crossed with the SEC, FCC and probably others. FCC Chairman Kevin Martin has already said that he would not allow the two companies to merge, although Martin has defied FCC procedures on other matters, so it's anyone's guess what he will really do.

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AES Calls for Papers for Fall Convention
New York - Feb 21, 2007 - AES Broadcast Sessions Chair David Bialik has issued an early call for suggestions on program, paper and special events for the 123rd AES Convention scheduled for Oct. 5 to Oct. 8, 2007, at the Jacob Javits Center in New York. The group seeks ideas on historic, technological and educational programs.

Brief proposals can be sent to


Sales Call Through its system integrator Telesto Broadcast Solutions, Klotz Digital Asia installed a Vadis system for Gulf News Broadcasting, the new communication venture of Al Nisr Publishing. The audio system includes Aeon consoles and the Vadis 888 router. Gulf News Broadcasting is based in Dubai, United Arab Emirates. International Datacasting (IDC) was awarded a new European satellite distribution network contract in Spain. The contract was awarded through IDC's subsidiary Profline.Profline will work with Iberica de Componente in Madrid to distribute audio encoding, RDS, receivers and satellite transmission subsystems to remote FM broadcast stations.


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Fairlight Forms U.S. Distributor
Pasadena, CA - Feb 20, 2007 - Fairlight has formed Fairlight US as the new independent distributor of Fairlight in the United States and Canada. Effective immediately, Fairlight US assumes ownership of Media Gear, the previous Fairlight distributor in North America. All sales and support staff in California and New York have been retained.

The Fairlight US team includes Steve Rance, president; Phillipe Guichard, national sales manager; Michael Haprov, national technical support manager and Michael Mueller, East Coast sales manager. Rance and Mueller are based in the New York Metro Area and Guichard and Haprov will head the West Coast operation from company headquarters in Pasadena, CA.

Rance, who holds multiple patents in audio systems design and was an original developer of the Fairlight CMI, leaves Fairlight AU after 25 years at the company's Sydney headquarters. Guichard, Mueller and Haprov all share longtime associations with Fairlight in the U. S. market, having previously served with Media Gear and other distribution entities.

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Marcher Appointed Sales Director of Klotz Asia
Kuala Lumpur - Feb 23, 2007 - Thomas Marcher has been appointed the new sales director of Klotz Digital Asia. Marcher joins Klotz from DIS Thailand where he was the area sales manager responsible for the Asia-Pacific markets. Prior to DIS, he worked for TC Electronic, and was a key part of setting up the TC China office.

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Garrison Joins BE as NW Sales Manager
Quincy, IL - Feb 21, 2007 - Broadcast Electronics (BE) has opened a sales office in Portland, OR, and appointed Lyle Garrison as the northwest regional sales manager. Garrison will handle sales support for BE studio and RF products in the six-state territory of Washington, Montana, Oregon, Idaho, Wyoming and Alaska.

Garrison was previously a district sales manager for Harris. He comes to BE with a technical background in broadcasting and computer networking, including 20 years' military RF communications experience and several years representing computer and telecom networking for Fujitsu.

Garrison is taking over sales support for the region from Ellis Terry, who will remain BE's regional sales manager for the Western United States. Terry will continue to provide studio and RF support to broadcasters in California, Nevada, Utah, Arizona and Hawaii.

Garrison can be reached at 503-922-0562 or

RCS Restructures Development Team
White Plains, NY - Feb 23, 2007 - Broadcast software developer RCS has restructured after the recent merger with its sister software company Prophet Systems Innovations of Ogallala, NE. The new company is called RCS and headquartered in White Plains, NY.

As previously announced, the CEO of the new RCS is Philippe Generali, and the executive vice president of technology and development is Chip Jellison. Also tapped to lead the new team are John Fulbright, Bill Webber, Kenny Lee and Tony Williams.

Fulbright was promoted to director, studio application development. Webber moves into director, scheduling products. Lee moves from Selector XV to product manager, GSelector. While Williams takes over product manager, Selector XV and Master Control XV product lines.

Eye on IBOC

DRE, TCL Ally to Manufacture FM Extra Receivers
San Jose, CA - Feb 1, 2007 - Chinese consumer electronic products manufacturer TCL and Digital Radio Express (DRE) have formed a strategic alliance. The first effort of this alliance is a joint product development and cooperation agreement to use DRE's FM Extra technology. The agreement covers the design, development, manufacture and marketing of a range of consumer digital appliances. As part of this plan, TCL will implement FM Extra in several Chinese radio stations to demonstrate and test the capabilities of the FM Extra digital wireless broadcast system.

The first products from the cooperative agreement are expected mid-2007 and will be marketed under the available brands of TCL Group in the United States. TCL operates several business divisions, and in 2004 it acquired the Thomson Color TV and Alcatel Mobile phone business.

Ibiquity Unveils New Licensing Incentive Program
Columbia, MD - Feb 21, 2007 - Ibiquity Digital has announced a new incentive program for broadcast groups installing HD Radio technology that extends current discounts on license fees for groups meeting certain conversion commitments. The program also allows participating groups to lock in discounts on future station acquisitions, making it particularly advantageous to smaller groups and independent station owners.

Per the terms of the program, any radio broadcast group not currently licensed under a previous Ibiquity Digital station conversion incentive program will have its primary audio license fees capped at $10K per station (HD Radio license fees are scheduled to increase to $15K per station in July 2007 and then to $25K in July 2008).

"The top 20 radio broadcast groups own just 20% of the AM and FM stations in the U.S., which means the overwhelming majority of the nation's radio stations are owned by small groups and independents," said Ron Davis, chairman of the Small Market Operators Caucus. "This new program is an especially good fit for small, independent broadcasters, as it will help us accelerate our transitions to digital."

Qualifying groups will commit to license and convert stations under the following terms:

  • All group stations currently licensed with Ibiquity Digital must be converted under the existing license terms;
  • At least one group station not already converted must be converted by Dec. 31, 2007;
  • 50 percent of all group stations with revenues in excess of $300,000 must be converted by Dec. 31, 2010, based on a schedule outlined in the license commitment agreement (LCA);
  • $2,000 of the $10,000 license fee for each station committed under the incentive is due by Sept. 30, 2007. The remaining $8,000 for each station is due at the time the station is licensed.

The discount applies to all group stations, pending the execution of a 2007 LCA between the group owner and Ibiquity Digital by Sept. 30, 2007. The LCA is available online at

Radio magazine observation: The licensing fees for HD Radio have been a point of contention for many broadcasters, particularly the smaller and independent owners. This program does not eliminate the fees, but it does reduce the cost. Because of the licensing fees, some have viewed HD Radio as an interest only for the large owners. Ibiquity has an obvious financial interest in the development of its technology and wants to recoup those costs, but it also wants to encourage more stations to adopt the technology. Incentive programs such as this will help that effort.