Sirius XM Chief Financial Officer David Frear said he’s proud...
Sirius XM Chief Financial Officer David Frear said he’s proud of his company’s 2012 performance and its 2013 performance “is reason to take another hard look at the stock.” The new year will be “relentlessly focused on improving performance,” he…
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said this week during a webcast from the Citi Conference in Las Vegas. Sirius has gained new subscribers through introductory offers like its “freemium” promotions, he said. But more than half the people aren’t taking the service “and we keep driving at ways to make the performance better,” he said. Sirius has a competitive advantage in the car, Frear said. Sirius is working to expand its content lineup and eventually “provide a fully featured service to people that you've already hooked,” he said. The company is discussing programming deals with Fox News Channel, he said. Frear said the company is well-positioned to compete with radio over IP. “We believe in an IP-connected world,” he said. “We need to understand the technology and how our product works on that platform.” Sirius cares about the brand and content, not how people get it, he added. Dashboard integration has changed over the years and it will evolve into a better user interface in cars, Frear said. “We do expect there to be an awful lot of new apps to come into the car.” Frear also said he disagrees with the Copyright Royalty Board’s decision to raise Sirius’s royalty rates to SoundExchange. The CRB imposed an increase from 8 percent of annual revenue to 9 percent of gross revenue in 2013 (CD Dec 18 p8). The rates are too high, he said: “We're the smallest user of music in the marketplace and paying the largest amount of royalties.” As a result, Sirius will increase its music recovery fee, he added. In a separate webcast at the conference, Liberty Media CEO Greg Maffei said Sirius could be an independent company, but it won’t happen soon. “We've had this SIRI stake for quite a while,” he said. Liberty Chairman John Malone has “said someday SIRI will be an independent company,” he said. “I think he’s right in pointing out that doesn’t necessarily mean that’s going to happen in 2013 or [20]14 … Somewhere down the road, that'll be the way it is.” Maffei said he thinks Liberty will look harder at expanding internationally, he said. Sirius has done more in Canada and Mexico, he said: “It’s not an easy path everywhere, but where you have existing satellites and existing orbiting structure, [that] makes it a lot easier for sure.”