Sirius Backstage is happy to announce that its scheduled chats return starting with one on January 15th at 9p EST. It will be a moderated Stiletto support chat, featuring Backstage staff and Stiletto experts to answer questions that you may have regarding general problems with the Stiletto, and take feature requests that you would like to see. Due to the likely large volume of people, we ask that questions you have be general use rather than individual troubleshooting, and we would like to remind you that not all questions may be answered. To get to the chat, click the ‘chat’ button at the top of any page on Sirius Backstage. Make sure you have the latest version of Java, which is available for Windows and Linux at this link and if you are an Apple user you can find it on this page.

See you on the fifteenth, and if you cannot make it, remember that the chatroom is open all the time for unscheduled, unmoderated chats.

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It appears XM released their 4th quarter subscriber numbers today, and it is not very pretty. The plus side is that XM has achieved positive cash flow. The down and dirty is that they only added 440,000 net new subscribers in Q4, and for a grand total of 7.625 million subscribers, missing guidance by 75k subs, which misses by 8k more than last year’s guidance miss. This puts Sirius only 1.6 million subscribers behind XM, which is pretty amazing considering that they peaked at about 3 million behind XM in October, 2005. Sirius nabbed 67.19% of new net subscribers, which is a new record for them. In terms of total subscribers now, Sirius has 44% of the market, with 6.02 million compared to XM’s 7.625 million.

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John Mellencamp’s 21st album, Freedom’s Road, will have its world premiere on Sirius Channel 18, The Spectrum. John Mellencamp will sit in to play and talk about each track, in order, from his first album of original material in five years.

First broadcast is Wednesday, January 17th at 7 pm ET. It will be re-broadcast on January 18 at 12 pm ET; January 20 at 8 am ET; January 21 at 5 pm ET; January 22 at 2 pm ET, and January 23 at 9 pm ET.

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Sirius Backstage is proud to announce two new members to our Top Dog program. The Top Dogs are personally selected by the moderators as a group of members who contribute an exceptional amount to our community, and generally have a wealth of knowledge about Sirius. Our two new members are:

-Soxnationonline, for organizing and hosting our Walk The Dog this past summer and fall. He stayed with it, and apparently something else is planned for January 8th.

-me_rubin, for his expertise with S50 and Stiletto radio support, including making the ‘3 Finger Salute: A Beginner’s Guide to Resetting the S50’

Congratulations, and thank you both for all your hard work.

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If you are still looking to pick up a radio for yourself or for someone else, it looks like Sirius has extended their holiday rebate! Purchase any of the radios below by January 6th, and get the $20-$100 rebate! Pair this with a $79.99 S50 from Best Buy(not available online) and assuming Sirius honors the rebate, that’s $20 back overall! As usual, you need to activate the radio, in this case by January 20th, and the rebate information postmarked by January 31st, 2007. Enjoy!

Eligible radios:

Radios from Walmart, Walmart.com, Sam’s Club, and Target(but not Target.com) are not eligible for the rebate.

$20 - Starmate Replay, Starmate 4, Streamer GT, Xact Replay

$30 - Conductor, Sportster 4, Streamer Replay

$50 - Tivoli, Alpine Tuner

$100 - S50

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Sirius announced today that it broke 6 million subscribers at the end of 2006, ending with approximately 6,024,000 subs, and it will be cash flow positive in Q4, the first quarter ever for a satellite radio company to be cash flow positive. This is a large milestone for Sirius. We’ll likely know within the next week or so whether XM will report cash flow positive in Q4.

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Sirius Backstage strives to provide the best support and answers to our 25,000+ members. Tonight, to ring in the New Year, we are adding the Sirius Backstage Knowledge Base. Also known as a wiki, the Knowledge Base allows us to better organize information and for our members to contribute even more to the site. Any registered member can edit the Knowledge Base pages, and anybody can view it.

Our KB lets everyone contribute to pages and correct out-of-date, or incorrect, information. If members put bad information in, there are tracking capabilities so we can lock out users who abuse the wiki.

We started the KB already by putting up some categories and creating the channel and hardware pages. The rest is now up to you! The Knowledge Base will not survive without your support, and we hope that all of our members use it to its fullest! The more information we put in, the more valuable it is to all of us, so jump in!

To get to the knowledge base directly, you can either go to http://www.siriusbackstage.com/kb, or click on the ‘Help’ button at the top. And yes, we will be changing the help button to a more appropriate ‘KB’ button in due time .

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Sirius and XM are, once again, going to merge. This time the source is slightly more credible: The New York Times. As much as Mel Karmazin and David Frear want it, it is very unlikely for many reasons. Some are posted here from the first time Mel started talking it up back in June, and while some has changed, most has remained the same, and there are even another reason or two not to right now. The current list is:

-First off, assuming a minimum price of $18/share for a buyout, it would mean a takeover cost of over $5 billion. Sirius cannot add that level of debt to its balance sheet at this point in time. To do so in the future would likely require a much higher share price since it seems XM’s stock price has bottomed out and is starting to rebound. If XM reaches profitability before Sirius, which is likely, their share price will rise up.

-A second possibility is a buyout with stock. To do that, Sirius would have to at least double the number of their shares out on the market, which many shareholders will not like. If there is a complete merger, with both companies forming a new combined company, you have to satisfy both companies shareholders. XM’s will want an equal 50% stake in the company, while Sirius will want a 55/45 split to be more in line with what each company is currently worth.

-The radios use two different audio codecs, which are as different as CD and a cassette tape; Sirius uses an evolved version of PAC, while XM uses aacPlus, meaning that they would have to roll out new radios in order for people to receive all channels, or keep one codec and lose the other, which bring us to the next point:

-Which company’s radios will be the working ones? They could go with XM’s, due to the lower cost of producing them and the larger number of subscribers out there, but then that will add confusion to 6 million Sirius subscribers, who suddenly have to buy a new radio, making it confusing when it is Sirius buying XM. It would be easy to switch out a Sportster 4 or a Stratus becuase they would just send the sub a new radio to place in the universal dock, but what about people with installed tuner boxes, or OEM radios? There are millions of them out there, and the majority would have no idea how to switch it out, and probably have no idea where it is located either.

-What will the satellite formation be? (See how the satellites move) If one system is turned off, you will have angry home/office subs who can no longer pick up that signal and cannot turn their antenna to get the other system’s. The most logical choice will be keep all the birds up there, at least for now, and scrap Sirius’ 4th satellite they are working on. Instead, turn off the two Sirius satellites that are not at the top of the figure 8 orbit and the XM birds running, but that will mean only a 50% increase in bandwidth because there are three satellites up there plus the repeater signal rather than only two satellites + repeater signal if they went with one system or the other.

-Can the current radios pick up a signal outside of the company’s current spectrum? An XM antenna works with a Sirius radio relatively fine and vice-versa, but right now we do not know if one company’s radio could pick up the frequency the other broadcasts with. If the radios cannot do that, then every radio would have to be replaced in order to maximize the benefits.

-When there is only one company out there, innovation is cut back. When you have a monopoly, doing the latest and greatest with your hardware and programming will take a back seat to simply remaining profitable.

-Will they officially become one service, or stay as two? By staying as two, it would solve the radio question, but then they are competing with themselves. They will either double most of their costs, such as programming, or they will duplicate channels and waste bandwidth. If they eventually replace one service’s radios, they could offer more features such as video on the spectrum, but with only 4.5 Mbps(likely even less) in bandwidth for the video, will they make enough off of the incremental revenue for it to be worthwhile?

-They might have to raise prices too much. IMO, if they go beyond $14.99/month in the near to mid-term, other emerging companies such as WiMax or EV-DO will destroy them. The low price for what you get is a huge draw to most, and many would cancel their subscription if it was $20/month.

-Finally, the biggest reason: How will they get this past the FCC? It is a tough sell, and in 2002 the FCC blocked a merger between Dish Network and DirecTV due to the lack of competition outweighing any benefits. That medium has the cable companies solidly entrenched offering a similar product. What will the FCC say about the only two companies who currently provide a national radio service merging?

In short, if they merge, it will be tough. With XM coming close to being cash flow breakeven either this quarter or next, the stock price could rise, making it more costly. Plus, once one company is profitable, the FCC will say no to it unless the other is in bankruptcy.

Just a couple channel notes for today:

NASCAR radio launched this morning at 7a on Sirius 128, with The Morning Drive, hosted by David Poole and Marty Snider. The show runs 7am-11am. From 11a-3p, John Kernan and a rotating co-host list of past and present drivers will talk NASCAR and take calls. And from 3-6p, the Sirius Speedway show on Sirius Sports Action has moved to NASCAR radio.

Also, as we said several days ago, The Who Channel is now on 98, The Bridge is on channel 10, and Rolling Stones Radio is off the air.

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