DAK
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XM and Sirius to merge
Press Release Source: SIRIUS Satellite Radio; XM Satellite Radio
SIRIUS and XM to Combine in $13 Billion Merger of Equals
Monday February 19, 2:47 pm ET
Provides Consumers with Enhanced Content, Greater Choices and Accelerated Technological Innovation
Enables Satellite Radio to Better Compete in Rapidly Evolving Audio Entertainment Industry
Extraordinary Value Creation for Shareholders
Mel Karmazin to Serve as Chief Executive Officer and Gary Parsons to Serve as Chairman of Combined Company
WASHINGTON and NEW YORK, Feb. 19 /PRNewswire-FirstCall/ -- XM Satellite Radio (Nasdaq: XMSR - News) and SIRIUS Satellite Radio (Nasdaq: SIRI - News)
today announced that they have entered into a definitive agreement, under which the companies will be combined in a tax-free, all-stock merger of
equals with a combined enterprise value of approximately $13 billion, which includes net debt of approximately $1.6 billion.
ADVERTISEMENT
Under the terms of the agreement, 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 and 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 Messrs.
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 combined company will benefit from a highly experienced management team from both companies with extensive industry knowledge in radio, media,
consumer electronics, OEM engineering and technology. Further management appointments will be announced prior to closing. The companies will continue
to operate independently until the transaction is completed and will work together to determine the combined company's corporate name and headquarters
location prior to closing.
The combination creates a nationwide audio entertainment provider with combined 2006 revenues of approximately $1.5 billion based on analysts'
consensus estimates. Today the companies have approximately 14 million combined subscribers. Together, SIRIUS and XM will create a stronger platform
for future innovation within the audio entertainment industry and will provide significant benefits to all constituencies, including:
* Greater Programming and Content Choices -- The combined company is
committed to consumer choice, including offering consumers the ability
to pick and choose the channels and content they want on a more a la
carte basis. The combined company will also provide consumers with a
broader selection of content, including a wide range of commercial-free
music channels, exclusive and non-exclusive sports coverage, news,
talk, and entertainment programming. Together, XM and SIRIUS will be
able to improve on products such as real-time traffic and rear-seat
video and introduce new ones such as advanced data services including
enhanced traffic, weather and infotainment offerings.
* Accelerated Technological Innovation -- The merger will enable the
combined company to develop and introduce a wider range of lower cost,
easy-to-use, and multi-functional devices through efficiencies in chip
set and radio design and procurement. Such innovation is essential to
remaining competitive in the consumer electronics-driven world of audio
entertainment.
* Benefits to OEM and Retail Partners -- The combined company will offer
automakers and retailers the opportunity to provide a broader content
offering to their customers. Consumer electronics retailers, including
Best Buy, Circuit City, RadioShack, Wal-Mart and others, will benefit
from enhanced product offerings that should allow satellite radio to
compete more effectively.
* Enhanced Financial Performance -- This transaction 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. Wall Street equity
analysts have published estimates of the present value of cost synergies
ranging from $3 billion to $7 billion.
* More Competitive Audio Entertainment Provider -- The combination of an
enhanced programming lineup with improved technology, distribution and
financials will better position satellite radio to compete for
consumers' attention and entertainment dollars against a host of
products and services in the highly competitive and rapidly evolving
audio entertainment marketplace. 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.
"We are excited for the many opportunities that an XM and SIRIUS combination will provide consumers," said Gary Parsons, Chairman of XM Satellite
Radio and Hugh Panero, CEO of XM Satellite Radio, in a joint statement. "The combined company will be better positioned to compete effectively with
the continually expanding array of entertainment alternatives that consumers have embraced since the Federal Communications Commission (FCC) first
granted our satellite radio licenses a decade ago."
"This combination is the next logical step in the evolution of audio entertainment," said Mel Karmazin, CEO of SIRIUS Satellite Radio. "Together, our
best-in-class management team and programming content will create unprecedented choice for consumers, while creating long-term value for shareholders
of both companies. The combined company will be positioned to capitalize on SIRIUS and XM's complementary distribution and licensing agreements to
enhance availability of satellite radios, offer expanded content to subscribers, drive increased advertising revenue and reduce expenses. Each of our
companies has a strong commitment to providing listeners the broadest range of music, news, sports and entertainment and the best customer service
possible. We look forward to sharing the benefits of the exciting new growth opportunities this combination will provide with all of our
stakeholders."
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. Pending regulatory approval, the companies expect the transaction to be completed by the end of
2007.
SIRIUS's financial advisor on the transaction is Morgan Stanley and Simpson Thacher & Bartlett LLP and Wiley Rein LLP are acting as legal counsel.
XM's financial advisor on the transaction is J.P. Morgan Securities Inc. and Skadden Arps, Slate, Meagher & Flom LLP; Jones Day; and Latham & Watkins
LLP are acting as legal counsel.
Conference Call and Webcast Information
The companies will hold a joint conference call and webcast on Tuesday, February 20, 2007 at 8:30 AM ET to discuss this announcement. The conference
call can be monitored by dialing 800-573-4840 within the U.S. and 617-224-4326 for all other locations, passcode 29490052. The webcast can be accessed
at http://www.sirius.com and http://www.xmradio.com as well as on their satellite radio services by tuning to SIRIUS channel 122 and XM channel 200. The webcast will be
archived at http://www.sirius.com and http://www.xmradio.com.
About SIRIUS
SIRIUS, "The Best Radio on Radio," delivers more than 130 channels of the best programming in all of radio. SIRIUS is the original and only home of
100% commercial free music channels in satellite radio, offering 69 music channels. SIRIUS also delivers 65 channels of sports, news, talk,
entertainment, traffic, weather and data. SIRIUS is the Official Satellite Radio Partner of the NFL, NASCAR, NBA and NHL, and broadcasts live
play-by-play games of the NFL, NBA and NHL, as well as live NASCAR races. All SIRIUS programming is available for a monthly subscription fee of only
$12.95.
SIRIUS Internet Radio (SIR) is a CD-quality, Internet-only version of the SIRIUS radio service, without the use of a radio, for the monthly
subscription fee of $12.95. SIR delivers more than 75 channels of talk, entertainment, sports, and 100% commercial free music.
SIRIUS products for the car, truck, home, RV and boat are available in more than 25,000 retail locations, including Best Buy, Circuit City,
Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack and at http://shop.sirius.com.
SIRIUS radios are offered in vehicles from Audi, Bentley, BMW, Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep?, Land Rover, Lexus, Lincoln, Mercury,
Maybach, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan, Rolls Royce, Scion, Toyota, Volkswagen, and Volvo. Hertz also offers SIRIUS in its rental
cars at major locations around the country.
Click on http://www.sirius.com to listen to SIRIUS live, or to purchase a SIRIUS radio and subscription.
About XM
XM (Nasdaq: XMSR - News) is America's number one satellite radio company with more than 7.6 million subscribers. Broadcasting live daily from studios
in Washington, DC, New York City, Chicago, the Country Music Hall of Fame in Nashville, Toronto and Montreal, XM's 2007 lineup includes more than 170
digital channels of choice from coast to coast: commercial-free music, premier sports, news, talk radio, comedy, children's and entertainment
programming; and the most advanced traffic and weather information.
XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda,
Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota is available in 140 different vehicle models for 2007. XM's industry-leading products are
available at consumer electronics retailers nationwide. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
include, but are not limited to, statements about the benefits of the business combination transaction involving Sirius Satellite Radio Inc. and XM
Satellite Radio Holdings Inc., including potential synergies and cost savings and the timing thereof, future financial and operating results, the
combined company's plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements
identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "may," or words of similar meaning.
Such forward- looking statements are based upon the current beliefs and expectations of SIRIUS' and XM's management and are inherently subject to
significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the
control of SIRIUS and XM. Actual results may differ materially from the results anticipated in these forward-looking statements.
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in
the forward-looking statement: general business and economic conditions; the performance of financial markets and interest rates; the ability to
obtain governmental approvals of the transaction on a timely basis; the failure of SIRIUS and XM shareholders to approve the transaction; the failure
to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses of SIRIUS and XM may not be combined
successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; and operating costs and
business disruption following the merger, including adverse effects on employee retention and on our business relationships with third parties,
including manufacturers of radios, retailers, automakers and programming providers. Additional factors that could cause SIRIUS' and XM's results to
differ materially from those described in the forward-looking statements can be found in SIRIUS' and XM's Annual Reports on Form 10-K for the year
ended December 31, 2005, and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 which are
filed with the Securities and Exchange Commission (the "SEC") and available at the SEC's Internet site (http://www.sec.gov). The information set forth herein speaks only as of the date hereof, and Sirius and XM disclaim any intention or obligation to
update any forward looking statements as a result of developments occurring after the date of this press release.
Important Additional Information Will be Filed with the SEC
This communication is being made in respect of the proposed business combination involving SIRIUS and XM. In connection with the proposed transaction,
SIRIUS plans to file with the SEC a Registration Statement on Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS and XM plan to
file with the SEC other documents regarding the proposed transaction. The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders
of SIRIUS and XM. INVESTORS AND SECURITY HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when
available) and other documents filed with the SEC by SIRIUS and XM through the web site maintained by the SEC at http://www.sec.gov. Free copies of the Registration Statement and the Joint Proxy Statement/Prospectus (when available) and other documents filed
with the SEC can also be obtained by directing a request to Sirius Satellite Radio Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention:
Investor Relations or by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place, NE Washington, DC 20002, Attention: Investor
Relations.
SIRIUS, XM and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding SIRIUS' directors and executive officers is available in its Annual Report on Form 10-K for
the year ended December 31, 2005, which was filed with the SEC on March 13, 2006, and its proxy statement for its 2006 annual meeting of stockholders,
which was filed with the SEC on April 21, 2006, and information regarding XM's directors and executive officers is available in XM's Annual Report on
Form 10-K, for the year ended December 31, 2005, which was filed with the SEC on March 3, 2006 and its proxy statement for its 2006 annual meeting of
shareholders, which was filed with the SEC on April 25, 2006. Other information regarding the participants in the proxy solicitation and a description
of their direct and indirect interests, by security holdings or otherwise, will be contained in the Joint Proxy Statement/Prospectus and other
relevant materials to be filed with the SEC when they become available.
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crazyfists28
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i literally just renewed my subscription today for sirius, nothing better get screwed up in the future as far as fees and whatnot, otherwise im out
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BDx13
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awesome. now i'll sign up.
If I fail math, there goes my chance at a good job and a happy life full of hard work.
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moron
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Im really happy with Sirius. I listen to it all the time in my car, and I love the variety. Sirius just recently added a 90s station that plays all
of the grunge and alternative I grew up listening to in junior high and high school. You know... all of the stuff most people on Thorp hate. 
This merger has me pretty excited by the possibilities. Things will change with both services, obviously, but now we'll get the best of both
services. I'll get to hear red sox games now! I wonder what's gonna happen to some of the DJs though. There wont be a need for 2 metal stations.
How are they gonna choose which one they'll keep? That goes across the board obviously.
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DaveMoral
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Guess that means Stern and O&A are gonna be working for the same team... wonder if that will cut back on some of the sniping that O&A do on Stern.
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clevohardcore
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the words "never saw that coming". = SARCASM.
Now I may have to get it and then tolerate all the original XM and sirius customers talking about "the way it was" before the merge.
Each aspect of the soul has it's own part to play, but the ideal is harmonious agreement with reason and control.
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XHonusWagnerX
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Heres the official notice from Mel Karmazin CEO of Sirius:
To: SIRIUS Subscribers
Today is a very exciting day for SIRIUS customers. As you may have heard, SIRIUS Satellite Radio and XM Satellite Radio are merging to form the
nation's premier audio entertainment provider.
This combination of our two offerings will benefit you - our loyal listeners. As a single company, we'll provide superior programming to you every
day with the best of both SIRIUS and XM. Currently, XM and SIRIUS broadcast a wide range of commercial-free music channels, exclusive sports
coverage, news, talk, and entertainment programming. Howard Stern. Oprah and Friends. The NFL. MLB. NBA. ESPN. CNBC. Fox News. Additionally,
the combined company will be able to improve existing services such as real-time traffic information and rear-seat video as well as introduce new
ones.
After shareholder and regulatory approvals, we anticipate that the combination will be finalized by the end of 2007. Until then, both companies will
continue to operate independently. We will continue to provide you with the uninterrupted service - as well as the outstanding customer support -
that you have come to expect and enjoy from SIRIUS. We do not anticipate any changes in
your service during the merger process, however, please call our customer care team on 1- 888-539-7474 should you have any questions.
We look forward to the many benefits this combination will offer and continuing to make your listening experience an enjoyable one - offering more of
the Very Best Radio on Radio.
Stay tuned,
Mel Karmazin, CEO
| Quote: | Originally posted by REV.PAULIE
HONUS-as much as i can't stand a great deal of what you really like (for my own reasons that i would never hold,nor impose,against you),YOU FUCKING
RULE!
YOU,HONUS,IS WHAT MAKES THE "EDGE" COOL.
YOUR FRIEND,
PAULIE |
check out my post contributions at www.VinylNoize.com

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Muttley
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People have been asking Stern about this for a while.
Competition is a good thing. Therefore this merger is a bad thing in my opinion.
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JUICE MAYNE MSHC
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| Quote: | Originally posted by Muttley
People have been asking Stern about this for a while.
Competition is a good thing. Therefore this merger is a bad thing in my opinion. |
yep...say hello to a price increase next year.
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Jason the Magnificent
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How much do they cost now?
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crazyfists28
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sirius is 12.95 a month
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Six66Mike
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I like the "greater choices" line when 2 companies merge. Well since you are selling the same product, there's now a lot of redundant channels in the
service that will likely be axed. I'm guessing they mean some channels or genres one had but not the other, now offering that choice after the merge.
My guess is cut 10% of channels as redundant and the new services on either side will only account for about 1%, hardly greater choice.
A lot of people ask me what kind of music I like. I love "soul music". My "soul music" isn’t a style, genre or niche. It’s music that is genuine. It’s
a painful lyric, a dirty bassline, it’s a harrowing vocal, it’s feedback, it’s an anthem, it’s a love song, it’s anarchy. I’ve got my personal
favourites but in the end it doesn’t matter who or where it comes from... so long as it’s good and it's real.
- Paul Morris, music director at 97.7 HTZ-FM
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JUICE MAYNE MSHC
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well there are redundant channels but there is a ton of shit that one service has that the other doesn't
Sirius has Howard, Bubba The Love Sponge, Marth Stewart, NBA, NFL, NASCAR, Eminem channel, The Who channel, Rolling Stones, and Elvis channels, etc
XM has O&A, Oprah, punk/hardcore channel, MLB and I'm sure a bunch of other shit I don't know about. As long as the price doesn't go up too much and
I don't have to buy all new radios then it will be cool.
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Siczine.com
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Fuck both of them, I'd rather buy a deck and listen to my CD's then pay 12 bucks a month to listen to more bullshit.
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Muttley
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Besides Stern I used to listen to Hard Attack sometimes but they always played the same shit. I heard XM's music channels are considerably better.
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Six66Mike
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| Quote: | Originally posted by Siczine.com
Fuck both of them, I'd rather buy a deck and listen to my CD's then pay 12 bucks a month to listen to more bullshit. |
ahaha agreed. I stopped listening to radio years ago, 1 good song out of 20 got boring. My new iPod with only 1,000 songs is keeping me busy and I'm
ripping cd's and adding more all the time. Shuffle mode is good variety
A lot of people ask me what kind of music I like. I love "soul music". My "soul music" isn’t a style, genre or niche. It’s music that is genuine. It’s
a painful lyric, a dirty bassline, it’s a harrowing vocal, it’s feedback, it’s an anthem, it’s a love song, it’s anarchy. I’ve got my personal
favourites but in the end it doesn’t matter who or where it comes from... so long as it’s good and it's real.
- Paul Morris, music director at 97.7 HTZ-FM
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JUICE MAYNE MSHC
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I've recently come to the conclusion that without Howard, Sirius is a complete waste. Like Muttley said they play the same fuckin shit on the music
channels all the time. I can make infinite playlists on my iPod and that's free. When Howard hits the road so will I.
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RomanticViolence
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| Quote: | Originally posted by JUICE MAYNE MSHC
As long as the price doesn't go up too much and I don't have to buy all new radios then it will be cool. |
Agreed.
Have you ever noticed how crayons are a lot like M&M's? All the colors tend to taste the same.
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crazyfists28
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i disagree about sirius "needing" stern, i dont have nor do i want an ipod and regular radio is terrible, not to mention all the commercials. with
satellite you have a channel that for the most part will meet your needs whenever you have a mood for a particular type of music. i dont like bringing
tons of cds in the car because a. they have been stolen in the past, b. i never know for sure what im going to want to listen to. its well worth a few
bucks a month....imo
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Voodoobillyman
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| Quote: | Originally posted by crazyfists28
i disagree about sirius "needing" stern, i dont have nor do i want an ipod and regular radio is terrible, not to mention all the commercials. with
satellite you have a channel that for the most part will meet your needs whenever you have a mood for a particular type of music. i dont like bringing
tons of cds in the car because a. they have been stolen in the past, b. i never know for sure what im going to want to listen to. its well worth a few
bucks a month....imo |
the numbers alone prove without a doubt that Sirius needs Stern. he, alone, increased their subscriptions by the millions literally.
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crazyfists28
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from a business point of view, absolutely. im saying for me personally, being a stern fan for probably 15 years, its not the only reason to enjoy
sirius. to me its one of the best purchases i ever made. i may have used the wrong word, "need", yes sirius needs him. but without him, sirius is
still a great music, talk and sports service....
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JUICE MAYNE MSHC
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You know how on most Sirius units you can set alerts for bands you like? I have all 30 of mine set with different bands and it's always the same
fuckin song for every band. For instance...I get a Madball alert, it's that song "Heaven/Hell" off their new album, or Life Of Agony is always
"Through And Through" or "This Time". For the past month every time Hard Attack plays Megadeth it's this new song "Gears Of War", always. It drives
me nuts. Not to mention they repeat entire playlists sometimes. Example...I'll listen to whatever channel from 5 to 6 pm today...and then on Sunday
it will be the exact same playlist in the same order and everything. I listen to music almost constantly and shit like this just irritates me.
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Voodoobillyman
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| Quote: | Originally posted by crazyfists28
from a business point of view, absolutely. im saying for me personally, being a stern fan for probably 15 years, its not the only reason to enjoy
sirius. to me its one of the best purchases i ever made. i may have used the wrong word, "need", yes sirius needs him. but without him, sirius is
still a great music, talk and sports service.... |
You have to clarify these things!
I personally don't own any of these services and probably never will, I just don't spend that much time around a radio, when I'm in my vehicle I
listen to Cd's or AM talk radio. The more I hear about the repetitiveness of the playlists, the more I wonder why anyone messes with this stuff. Thats
why I figured Stern was the only thing they had goin, they lose him and they lose ALOT of subscribers I think.
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