SOURCE INTERVIEW Scott Greenstein, President and Chief Content Officer at Sirius XM Radio Inc., doesn't have a job that involves easy decisions. Not only does he oversee what music, sports and talk programming nearly 19 million subscribers get to choose from. But on November 12th, Scott and his team had the daunting task of combining most of the music lineups of both Sirius and XM following the merger of the two companies. So how does one go about the melding of two services, each with millions of loyal followers, and still keep everyone happy? I had to find out. So when Orbitcast got the chance to chat with Greenstein about the combining of channels, you bet I took it. The fact is, most people understand that the duplication of channels is inefficient. There's no reason to have two channels, on two separate services, each playing the same thing. I get it. But I wanted to learn about the overall strategic thinking behind the process, and fill the gaps in some unanswered questions. Orbitcast: How did you go about selecting which channels stayed and which were replaced? Scott Greenstein: It's about getting the most amount of breadth we could have, with the most amount depth. Meaning that the breadth is the horizontal appeal, and the depth is the vertical appeal. We looked at every element of each channel, from the playlists to the jocks, and tried to bring it together so subscribers and listeners get the best audio experience they can have. If you look at what each service had to offer - from Bob Dylan, Tom Petty, Willie Nelson, BB King, Grand Ole Opry, the Artist Confidential series, and POTUS on XM's side; to Jimmy Buffet, Grateful Dead, Bruce Springsteen, Frank Sinatra, Steve Van Zandt, Metropolitan Opera, Jamie Foxx, Blue Collar Radio, as well as The Catholic Channel, Doctor Radio on Sirius' side - these are great assets that are missing from the other service. So you bring in those assets from each side and build a mix of vertical and horizontal content. So is this a fundamental change in how Sirius XM is trying to appeal to a broader audience? No. This is not some sort of new initiative or change in our thinking. I'm a believer in that there is a wide spectrum of tastes in all of our listeners. You might have come to Sirius for Howard Stern, or to XM for Bob Dylan, but your tastes in music may range from one genre to another. You're going to discover other channels and genres from when you first subscribed. In fact, with all its newly combined assets, Sirius XM has even more places to explore on its channels. But never was this a change in our philosophy - from when we had 300,000 subscribers to our current level of about 19 million - it makes no difference. Well, it's part of what got you guys here to begin with. It's how satellite radio has grown. Exactly. We are doing a higher end, more intense scrutiny, to do what we've always been doing all along. The only difference now is we're bringing together both sets of content, to both sets of subscribers and listeners. The thing to understand is that radio is the easiest and most freeform of media that can evolve. Let's take for example E Street Radio, which evolved from a limited-time promotion - but due to the massive and amazing public response we received - has turned into a full fledged dedicated channel. It's an example of listening and responding. And that's what we're doing now. So you're taking in listener feedback and continuing to adjust based on that feedback? Our approach will continue to evolve as we receive feedback from our listeners and subscribers. We're doing exactly what we always did: trying to give the best aggregation of content to our subscribers. And part of that is to listen to them, and respond. Now, that brings us to the question of specific genres. Obviously in media it's impossible to "please everyone," but many listeners are upset over the loss of entire genres such as Old School Hip-Hop (i.e., The Rhyme and Backspin) and Disco (i.e., Chrome and The Strobe) as well as the loss of other micro-niche channels. What are the plans to help address the fans of these genres? For Old School Rap, we currently are running a show on Hip-Hop Nation. But as things evolve and we receive more feedback from our listeners, we're open to doing more. We are going to look into getting more Old School Rap into that channel and possibly expanding the programming. For Disco, the folks behind the channel are still on board with us and are distributed out into other channels. So the essence is still there but it has been spread to other channels. The key is that we're here to serve our subscribers and listeners. And we aren't forgetting that. We are still the ultimate aggregators of content. There's something for everybody - and immensely more than terrestrial radio. And while the internet has a wide range of choices, our service is more accessible than the internet and still the most content in one stop. This is a unique service that we're providing. So we're looking into all of our options, and much of that has to do with feedback from our subscribers. We're willing to listen and react. But we're also trying to do our job, and provide the most unique amount of content with the spectrum available. But the new lineup seems heavily weighted towards Rock, what with over 20 channels dedicated to the genre. Is this driven by demand or some other reasoning? A lot of that has to do with the broad definition of the category. If you look at it, there's a number of different ways to listen to "Rock," you could be into The Beatles or into Heavy Metal. The genre just lends itself to lots of different styles. In Country or Sports for that matter, there's a little less diversity in the definition. But remember, we have six country channels. We also have an audience that has a clear interest in a wide range of rock interests. This isn't unique us. Look at attendance at concerts in North America, and you'll see an overwhelming majority go to Rock concerts. So it's based on both demand as well as the wide spectrum of the category. So with that in mind, there seems to be a conflict between maintaining this wide range of genres, and the artist-only channels. For instance, micro-niche channels like Disco and Old School Hip-Hop get eliminated, while at the same time there are channels like AC/DC Radio and Led Zeppelin Radio. Can you help explain the rationale behind the Artist-only channels? One of the benefits of Satellite Radio is the ability to go from broad appeal to very vertical interests. It's part of what makes us different from terrestrial. These channels have true artist cooperation. The artists have a deep interest in participating with these channels, and listeners get access to their favorite bands like nowhere else. You'll notice that these are iconic artists, that have millions - not thousands - but millions of fans. And you're getting exclusive interviews and extremely rare insight and programming behind each of them. These channels are unique assets with limited duration and we only do them with full artist cooperation because that's the only way to bring listeners the best programming. Bob Dylan's show is a great example of a fulltime show with one artist, even though it's not a dedicated channel. The ability to reach into the creative mind of someone like that is something you just can't get anywhere else - and that mind is a national treasure. It's something that is impossible for terrestrial to do. Now, there's always a debate about the length of time these channels should run for, but it's all part of the constantly evolving process. Would you consider a single "artist-only" channel that rotates each artist for a block of time? That's something we're considering. We're looking at working to evolve towards that. But it needs to apply to the right genre. You shouldn't mix up artists that have nothing to do with each other, but we are actively looking into how to have one channel dedicated to "pop up" channels. There has been a lot of talk about the channels getting "censored" and becoming family friendly. It's hard find a clear definition of what is going on. XM has its "XL" channels, while all the others were family friendly and there's been a lot of confusion following the combination of the channels about censorship taking place. Can you clear the air on this and address this confusion? This is a great question and I'm really glad you asked it. There is absolutely, 100 percent, no censorship at Sirius XM. Let me be clear about that. Here's the delineation: There are artist- and label-edited songs that the artists and record labels agree to provide radio. These are versions of the songs that have been approved by the artists and the record labels to air. Only three of our channels play these artist- and label-edited songs: Hits 1 on Sirius, 20on20 on XM, and The Heat. Hits 1 and 20on20 are obviously pop/hits channels with a huge number of kids listening to them while The Heat is the urban equivalent. The reason why these artist/label-edited songs are played is because our research found that an overwhelming number of parents are listening to these channels with their kids. We feel it is being socially responsible to air edited songs, knowing that we have young children listening to them. Let me address The Heat. That channel took the place of Hot Jamz after the channel combination, and Hot Jamz did not play artist- and label-edited songs. I thought it was inappropriate to not have the equivalent choices like Hits 1 and 20on20 for parents and kids listening to that urban channel. So people listening to Hot Jamz started hearing artist- and label-edited songs from The Heat. But when it comes to the term "censorship" this is something I feel very very strongly about. And I really want to drive this point home. Never ever, ever - EVER - do we play anything that an artist didn't agree should be played. So if an artist or label didn't approve it, we don't touch it. The fact is, the subscribers and the artists built satellite radio. I, personally, like to hear that. So you're not just talking about explicit language, but you're also talking about preserving the artistic integrity of the music? Right. That's why we have the most amount of artist participation of any other form of media. These are artists of the utmost creditability and we respect their work. The word 'censorship' really gets to me, because it's completely not what we're about. From Howard Stern all the way to The Catholic Channel, with Jamie Foxx and Shade 45 in between. We simply do not censor our programming. Give me your closing thought. We feel that the subscriber and listener are paramount to Sirius XM on one side, and the artists are paramount to us on the other side of the equation. That's what makes this medium so great and so real. It's the bridge between the recording artists and the fans and listeners, our subscribers, in its purest, most direct form.