This excerpt taken from the SIRI 8-K filed Mar 21, 2007.
6. CD Players
Compact discs have provided competition for satellite radio since the Commission first authorized this service. The Commission identified CD players as an analog to satellite radio
109 Bridge Ratings, Music on Cell Phones, Jan. 25, 2007, at http://www.bridgeratings.com/press_01.25.2007 -MusicCellphones.htm (last visited Mar. 13, 2007).
110 For example, Sprint Nextel announced in August 2006 plans to develop a fourth-generation nationwide mobile broadband network, which will use the WiMAX standard, and deploy it in some markets during 2007 with a national rollout in 2008. Press Release, Sprint Nextel Corp., Sprint Nextel Announces 4G Wireless Broadband Initiative with Intel, Motorola, and Samsung, Aug. 8, 2006, at http://www2.sprint.com/mr/news_dtl.do?id=12960 (last visited Mar. 18, 2007). A number of companies are developing inexpensive Internet radio receivers than can pick up the signal from WiFi networks. For example, Torian, an Australian company, is marketing a device called inFusion, which operates as an FM radio, MP3 player, and Internet radio in any WiFi hotspot. Matthew Ingram, WiFi Radio Stations to Join Battle for Air Supremacy, SESAC INDUSTRY NEWS, Dec. 14, 2006, at http://www.sesac.com/ind_news_detail.aspx?news_ID=26 (last visited Mar. 18, 2007). Clearwire Corp., which builds and operates wireless broadband networks using WiMAX, recently raised $600 million with an initial public offering. Yung Kim, UPDATE 2 - Clearwire IPO raises $600 mln, top of range, REUTERS, Mar. 7, 2007, at http://today.reuters.com/news/articleinvesting.aspx?view=CN&WTmodLOC=C3-News-4&symbol=INTC.O&storyID=2007-03-08T030708Z_01_N07317552_RTRIDST_0_CLEARWIRE-IPO-UPDATE-2.XML&type=qcna (last visited Mar. 18, 2007).
from the very beginning, comparing the services in an effort to determine the rate at which satellite radio would impact terrestrial radio listenership.111 When satellite radio licenses were awarded in 1997, CD players were included in only 3.2 percent of new cars,112 yet in 2006 the overwhelming preponderance of new cars included CD players as part of their factory-installed equipment. In 2005, sales of CDs were at $11.2 billion, in contrast to $770 million in sales for digital music downloads that same year.113 Moreover, users can record music on CDs, further broadening the range of potential consumer listening experiences. For example, a podcast subscriber can download a podcast and burn it onto a CD rather than transferring it to an MP3 player. And a CD owner can upload songs onto a personal computer for playback through a service such as iTunes or for transfer to an MP3 player. Thus, compact discs are another of the many audio entertainment options available to customers.
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It is clear that all of the above providers view themselves as being in direct competition with each other. In public filings and statements, various members of the radio broadcasting industry have emphatically stated that they compete directly with satellite radio and other forms of audio entertainmenta view that is underscored by the fervent opposition they expressed toward the proposed transaction before the ink on the merger agreement was even dry.114 For
113 Jupiter Research, US Music Forecast, 2006 to 2011, Jan. 4, 2007 (Executive Summary), at http://www.jupiterresearch.com/bin/item.pl/events:jupitertel/jup/id=98643/ (last visited Mar. 13, 2007).
114 See Press Release, National Association of Broadcasters, NAB Statement in Response to Proposed Sirius/XM Merger, Feb. 19, 2007, at http://www.nab.org/AM/Template.cfm?Section=Press_Releases1&TEMPLATE= /CM/ContentDisplay.cfm&CONTENTID=8258 (last visited Mar. 18, 2007).
example, as NAB has described, local radio stations compete for listeners with other forms of audio delivery offering an almost unlimited array of content. IPods and other MP3 players, music [subscription] services, podcasting and the Internet streaming of U.S. and foreign radio stations literally provide content from around the world to listeners in each local radio market in America.115 Clear Channel has noted that terrestrial radio faces competition from [s]atellite radio . . . [and] portable audio devices, including MP3 players (such as iPods), subscription music services offered via cable television and direct broadcast satellite (DBS), [and] Internet music services.116 These and other parties have made similar representations in their certified securities filings.117 Such statements remove any doubt concerning the diversity and multiplicity of options available in the audio entertainment services market today.
116 Clear Channel Comments, 2006 Quadrennial Regulatory Review, at 13 (citation omitted).
117 See, e.g., Citadel Broadcasting Corp., 2006 Form 10-K Annual Report, at 26 (filed Mar. 16, 2007), at http://www.sec.gov/Archives/edgar/data/1174527/000119312507056656/d10k.htm (last visited Mar. 19, 2007) (We operate in a highly competitive industry. Our radio stations compete for audiences, creative and performing talent, broadcast rights, market share and advertiser support with other radio stations and station groups, as well as with other media such as broadcast television, newspapers, magazines, cable television, satellite television, satellite radio, outdoor advertising, the Internet, hand held programmable devices, such as iPods and cellular phones, and direct mail.); Cox Radio, Inc., 2006 Form 10-K Annual Report, at 16 (filed Mar. 13, 2007), at http://www.sec.gov/Archives/edgar/data/1018522/000119312507053326/d10k.htm (last visited Mar. 19, 2007) (The radio broadcasting industry is a highly competitive business. Our radio stations compete against other radio stations and other media (including new technologies and services that are being developed or introduced) for audience share and advertising revenue. . . . New technologies (such as satellite-delivered and portable digital audio players and hand-held programmable devices including iPods and cellular telephones) allow listeners to avoid traditional commercial advertisements and offer superior sound quality as compared to terrestrial