Wall St. and Business Wednesdays: Does Deal With Interscope Mean Sirius Has Sold Out? by Matt Grisafi

I thought the power of deciding which artists to play would go back to individual DJs, and ultimately, music fans. I thought the rumors of record companies indirectly paying Clear Channel to play their artists would end. I thought this would be music for music fans, by music fans.


But the recently-announced "strategic alliance" between Sirius Satellite Radio and Interscope Geffen A&M Records has me seriously rethinking things. The "exclusive creative, marketing and promotional alliance" with Interscope Geffen A&M Records and its chairman, Jimmy Iovine, sets a dangerous precedence in the satellite radio world.


According to Sirius, in addition to serving as an executive producer of Eminem's new Shade 45 channel, Iovine will act as creative advisor and consultant to Sirius on new programming opportunities. Interscope Geffen A&M will also offer Sirius marketing and promotional opportunities with their artists.


When a radio outlet like Sirius hooks up with a record company like Interscope Geffen A&M, it raises some eyebrows. A deal like this paves the way for Sirius to plaster Interscope artists all over their waves, serving as the record company's personal promotional department, all under the guise of a "strategic alliance."


Radio stations should simply not form partnerships with record companies. The way radio is supposed to work, record companies produce music, radio stations choose what music they think people will like, but the listeners ultimately decide what's worth playing. The focus should be on what fans want, not what record companies want.


"The opportunity that this relationship creates for an individual artist, a record label, or for that matter an industry, customizing distribution and exposure, is unparalleled in the history of the music business," Iovine said of the deal.


Contrary to Iovine's opinion, individual artists and record labels stand to gain nothing with this relationship unless, of course, they're affiliated with Interscope Geffen A&M.


A radio station shouldn't need to form an alliance with a record company to get artists in their studio. Artists should make radio appearances to gain exposure for themselves, not the other way around. But because Sirius is battling XM Satellite Radio, they are searching for ways to gain exposure themselves. It appears that they believe the best way to do this is by getting Iovine artists like Eminem, U2, No Doubt, Sheryl Crow, 50 Cent and Queens of the Stone Age in their studios.


Unfortunately this swings the balance of power to the record companies. Knowing Sirius and XM are battling each other, record companies could very well use this to their advantage. For instance, they could set up a special U2 in-studio appearance if they agree to add some Joe Schmo and John Doe tracks to their heavy rotation. And if not, well, there's always XM.


Could you imagine if Rolling Stone or Spin teamed up with a record company? Imagine the conflict of interests that would cause. Well, this Sirius-Interscope deal isn't far from that. Artists should get on the air based on their music, not based on a strategic alliance their record company has with the radio station.


The competition Sirius faces is fierce and the stakes high, but selling themselves to record companies isn't the way to go. Let's hope this "strategic alliance" doesn't change the way satellite radio providers do business. Because satellite radio was supposed to revolutionize radio - not give us another Clear Channel.

This article was published in The News of Delaware County

Matt Grisafi

Wednesday, February 9, 2005

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