XM Talks Sirius Truce

Suddenly, talk of a truce fills the combative satellite radio space.

XM Satellite Radio (XMSR Quote) and Sirius (SIRI Quote) have spent years scrapping for leadership of their small but fast-growing high-tech niche. The rivals have traded insults, engaged in shouting matches and pumped out press releases at a furious rate.

But going by what an XM exec said at an investment conference Wednesday, the clash may be on track to mellow a bit. The comments suggest that as they focus more on attracting advertising dollars, Sirius and XM are starting to see traditional radio, rather than each other, as their greatest nemesis.

Early Thursday, XM fell 17 cents to $31.35, while Sirius dropped a dime to $5.57.

Reaching Out

The armistice buzz started up when XM Chairman Gary Parsons took a question at the Banc of America Securities Media and Telecom conference.

A money manager asked Parsons if Sirius and XM might benefit by making radios that could work with either service and charging $18 a month for the combined services. Right now, each outfit collects $13 monthly for service on incompatible radios.

Parsons, a former engineer, might be expected to bristle at such a suggestion. After all, XM has made much of its supposed technical superiority, along with a strong lineup of automaker partners and a big lead in the all-important subscriber count.

But Parsons seemed pleased by the query and said it was the first time he'd ever heard that question. "I'd have no problem doing that," he answered.

The evident warmth of the reply seemed to suggest that not only was there room for two satellite radio players, but that maybe together the two shops could work against a much larger foe: conventional radio.

In an interview after his presentation, Parsons said that since Mel Karmazin took over as CEO of Sirius, the satellite radio industry has become more cohesive.