Muzak Files for Bankruptcy

**Scott Greczkowski** · #1 (**permalink**) 02-11-2009, 07:15 AM

As I reported this weekend and in my MultiChannel News article on Monday, I was heaing a strong rumor that MUZAK was about to file for bankruptcy.

I believe this is part of the puzzle in the Echostar / Sirius XM deal. Remember Echostar uplinks many of the MUZAK channels. If Charlie buys out MUZAK and Sirius XM he is the largest commercial provider of music in the United States...

Here is a link to the MUZAK filing news...

Bankruptcy proves a sour note for Muzak | Business | Chron.com - Houston Chronicle

riffjim4069 · #2 (**permalink**) 02-11-2009, 08:26 AM

I need some pleasant Muzak to calm my nerves...

Muzak should fine in the long-run, but I wouldn't invest my money in the service. Satellite Radio is a great idea, but there is no way I am going to pay subscription fees when I can listen to over-the-air AM/FM and HD radio at no charge.

skottey · #3 (**permalink**) 02-11-2009, 09:37 AM

Quote:

Originally Posted by riffjim4069

I need some pleasant Muzak to calm my nerves...

Muzak should fine in the long-run, but I wouldn't invest my money in the service. Satellite Radio is a great idea, but there is no way I am going to pay subscription fees when I can listen to over-the-air AM/FM and HD radio at no charge.

Do you have cable or satellite TV?

Why pay for cable or satellite when you can get free OTA channels at no charge?

At the dawn of cable TV there were holdouts that said they would never pay for TV wired to their house. Most eventually did.

I agree with you that satellite radio has certainly lost its value lately and will get even worse as they populate the music stations with advertising, but there is a certain segment that will continue to pay, even with ads. The real question is will the retain enough subscribers and balance out with advertising dollars and make a profit.

Foxbat · #4 (**permalink**) 02-11-2009, 10:20 AM

Muzak was OTA back in the 1960s and 1970s. They used a subcarrier on a local FM station that required a special receiver to decode. Satellite offered more security and a larger range of music genres. When Echostar started DishNetwork, Charlie signed a deal with Muzak where E* would provide hardware and Dish customers would get Muzak channels.

Another good reason that Echostar and DishNetwork went their "separate" ways. Looks like Charlie is getting ready to become a Media Mogul with Muzak and Sirius/XM... Hmmm....

bhelms · #5 (**permalink**) 02-11-2009, 10:29 AM

"The day the Muzak died..." (Didn't someone already do a song about that...??

)

topcats69 · #6 (**permalink**) 02-11-2009, 01:27 PM

Quote:

Originally Posted by skottey

Do you have cable or satellite TV?

Why pay for cable or satellite when you can get free OTA channels at no charge?

At the dawn of cable TV there were holdouts that said they would never pay for TV wired to their house. Most eventually did.

I agree with you that satellite radio has certainly lost its value lately and will get even worse as they populate the music stations with advertising, but there is a certain segment that will continue to pay, even with ads. The real question is will the retain enough subscribers and balance out with advertising dollars and make a profit.

that why I switched to slacker

JosephB · #7 (**permalink**) 02-11-2009, 01:55 PM

Quote:

Originally Posted by Foxbat

Another good reason that Echostar and DishNetwork went their "separate" ways. Looks like Charlie is getting ready to become a Media Mogul with Muzak and Sirius/XM... Hmmm....

I wouldn't exactly call him a media mogul even with both muzak and sirius xm. He's always pretty much had muzak, and while sirius xm will be a significant addition, he will need to show that he can effectively integrate all of these holdings he now has. He's getting a good start with Sling Media (though it appears he's run off the founders). He will need to take all of these assets, along with the 700mhz stuff he owns, and show that he can pull off an integrated, coherent strategy.

Albie2 · #8 (**permalink**) 02-11-2009, 05:57 PM

Quote:

Originally Posted by JosephB

I wouldn't exactly call him a media mogul even with both muzak and sirius xm. He's always pretty much had muzak, and while sirius xm will be a significant addition, he will need to show that he can effectively integrate all of these holdings he now has. He's getting a good start with Sling Media (though it appears he's run off the founders). He will need to take all of these assets, along with the 700mhz stuff he owns, and show that he can pull off an integrated, coherent strategy.

Who says he needs an integrated strategy with regards to sat radio? If he can get control of Sirius/XM and get the balance sheet cleaned up (Debt) Sat Radio can be quite profitable especially now there would be no head to head competition for content (think Howard, NFL, MLB, etc). Remember Sat radio brings in about $2Billion a year in sub fees.

JosephB · #9 (**permalink**) 02-11-2009, 09:56 PM

Quote:

Originally Posted by Albie2

Who says he needs an integrated strategy with regards to sat radio? If he can get control of Sirius/XM and get the balance sheet cleaned up (Debt) Sat Radio can be quite profitable especially now there would be no head to head competition for content (think Howard, NFL, MLB, etc). Remember Sat radio brings in about $2Billion a year in sub fees.

I agree he is a shrewd business man, but I don't think he has a lick of media sense.

riffjim4069 · #10 (**permalink**) 02-11-2009, 11:11 PM

Quote:

Originally Posted by skottey

Do you have cable or satellite TV?

Why pay for cable or satellite when you can get free OTA channels at no charge?

At the dawn of cable TV there were holdouts that said they would never pay for TV wired to their house. Most eventually did.

I agree with you that satellite radio has certainly lost its value lately and will get even worse as they populate the music stations with advertising, but there is a certain segment that will continue to pay, even with ads. The real question is will the retain enough subscribers and balance out with advertising dollars and make a profit.

Over the past 5-years we've had Cable, VOOM, Dish Network, StarChoice and now FiOS TV. 60-70% of our TV viewing is OTA, but we just gotta pay for 250+ channels in order to get the dozen cable channels we do watch. I lived without any TV for almost 8-years and we would probably be fine with OTA...but we can afford it so I don't worry about it.

While I have always been a gadget and electronics nut, satellite radio has never interested me in the least. However, my mother (who can't operate a DVR) has had satellite radio in all her vehicles for years, and my wife (who is perfectly happy in front of a 19" B&W TV) keeps asking for Sirius or XM radio. Go figure! I just don't get it...I could always find outstanding news, sports, weather and talk on local radio and on nationally syndicated radio. Additionally, I listened to the best music compilations imaginable when I used to commute 58-miles each way to work for more than seven years into DC...I made my own CDs and MP3 collections.

I certainly don't have anything against satellite radio but, like you pointed out, satellite radio is expensive and I just don't think they can attract enough customers to keep things in orbit. I personally don't feel they do enough to differentiate their service from FM/HD Radio and their are plenty of other ways to download or subscribe to quality music services.