SiriusXM CEO Mel Karmazin called ad-supported customizable Internet radio "a race to the bottom in terms of business model," as the quality of the user experience depends on a low spot load.
Karmazin, who announced last week he'll step down as SiriusXM CEO in February, spoke on his companies Q3 earnings call yesterday (his comments were reported by Billboard.biz).
"Those companies (ad-supported, personalized webcasters, such as Pandora) which can grow users and provide good customer experience usually have the worst business models," he said. He said fixing their businesses would take "a whole lot more commercials, and that means harming the customer's experience."
It will be interesting to see if SiriusXM puts Karmazin's idea into practice when the company launches its own online custom radio, which he promised it will by the end of the year.
"Not because we think it's a good business," he qualified, but because customers want it.
Read more in Billboard.biz here.