The content costs have declined significantly at Sirius XM since the merger. Frear said:
So just before we merge that the two companies were spending about $400 million a year on programming, and it's now down to just a little under $300 million. It's an unusual pattern for programming cost in media in the United States. But it speaks volumes as about the inefficiencies of the two companies being separately, efficiencies have been together.Note that Frear states that most of the cost savings have been realized and that he only expects them to decline slightly, with the exception being a major piece of content leaving the platform. A major piece of the content expense is Howard Stern whose contract comes up for renewal at the end of 2015. Frear stated:
I think that are - we still expect programming cost to come down slightly from where they are now, but we really have now sort of gotten through, I think all of the - all of the big deals. and so I wouldn't expect any material declines in programming cost from here in the absence of a major piece of content leaving the platform.
Well, Howard is a unique talent in radio. I mean there has never been anybody like him and never will be, right? And he puts on a fantastic show. He works hard. He's a great partner - just we can be happier with relationship that we've had with Howard. It's like any great performer, there is going to come a day when he decides to step off the competitive stage, and I hope that day is much later rather than sooner. I don't know what he we will decide to do when his contract is up. I know that we'd like to keep him on our air and performing for as long as he'd like to do that.
Does Sirius really think it needs to retain Howard past 2015, it's not like Howard can go anywhere else and command his salary.