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SiriusXM using subscription-TV model in Internet radio battle

A sign for XM Satellite Radio hangs over its exhibit space at the New York International Auto Show in New York.

Mark Lennihan/AP/Mark Lennihan/AP

Satellite radio has always aimed to bring the subscription-TV business model to the radio waves. Now, the little devices that power SiriusXM Canada's subscription radio service will start working more like the set-top box on a TV set.

Canadian Satellite Radio Holdings Inc. , the parent company of Canada's newly merged satellite radio provider, will introduce new devices early next year that allow "timeshifting" – recording certain programs to listen later. The new radios, which will look more like iPhones with the company's first touch screens, will also include functions such as a channel guide, the company's chief executive officer, Mark Redmond said.

While the merger of Sirius Canada and XM Canada announced last year is now complete, making SiriusXM Canada's only satellite radio provider, it still has to contend with other subscription music services delivered over the Internet. Rdio, for example, which offers music on the Web and on devices such as smartphones, launched in Canada a year ago and offers cheaper subscription packages.

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"I don't ever want to lose perspective of any kind of competition," Mr. Redmond said.

In addition to music channels, SiriusXM has exclusive deals for NHL content and celebrity talk radio such as Howard Stern. It also has deals with major auto manufacturers to pre-install its devices in new cars. Recently, the company reached the 2-million subscriber mark.

Still, Internet radio is growing, with brands such as Rdio gaining recognition among consumers. And while many prominent services such as Pandora, Spotify and Rhapsody are not in Canada yet, they are likely eyeing the market.

"I have no illusions. We'll soon be joined by competitors," said Rdio chief executive officer Drew Larner.

SiriusXM has updated its offerings to look more like an Internet radio service itself. It has launched apps for customers to listen on their smartphones and also streaming on the Internet.

"We'll continue to evolve … so that [subscribers]can access our content on multiple platforms," Mr. Redmond said.

On Thursday, SiriusXM's parent company reported its first set of quarterly results as a merged entity. The Toronto-based media company reported total revenues of $61.4-million in the three months ended Aug. 31. Calculated against the combined results of the two companies in the same period a year ago, revenues were up 13.4 per cent from $54.1-million.

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The company deepened its operating loss to $3.4-million, from $2.6-million last year. However, its operating results included merger costs as well as other one-time charges. Its EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted to account for those charges, was $11-million, up from $4.4-million last year.

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