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Illustration of Mark Redmond, chief executive officer of Sirius XM Canada Holdings Inc. (Anthony Jenkins/The Globe and Mail)
Illustration of Mark Redmond, chief executive officer of Sirius XM Canada Holdings Inc. (Anthony Jenkins/The Globe and Mail)

THE LUNCH

Sirius XM Canada’s Mark Redmond: A quiet guy with lots of listeners Add to ...

Mark Redmond has something that a lot of media executives around the world wish they could create: a profitable business, funded by the loyalty of hundreds of thousands of subscribers.

When satellite radio services were granted Canadian licences in 2005, many people scoffed at the idea that listeners would reach into their pockets to pay for something they have received free ever since New York’s Metropolitan Opera House first experimented with public transmissions in 1910.

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“People were getting free radio forever and, of course, they questioned why somebody would pay,” says Mr. Redmond, chief executive officer of Sirius XM Canada Holdings Inc.

The skeptics had a point. In the United States and Canada, satellite radio services became popular – just not popular enough to make a buck. The enormous cost of fighting for attention overwhelmed the business. Nothing epitomized the satellite radio industry’s penchant for financial self-destruction more than the $500-million (U.S.) cash-and-stock contract that Sirius Satellite Radio signed to secure Howard Stern in 2005.

Faced with a debt crisis, the two U.S. rivals, Sirius and XM Satellite Radio, merged, and their Canadian affiliates soon followed, in 2011. The slow turnaround of the business in this country is led by Mr. Redmond, 52, a man who is as quiet and careful with words as Mr. Stern is loud and provocative.

Not that you are ever likely to hear the King of All Media on the dial in Mr. Redmond’s vehicle. The radio controls were long ago handed over to his teenaged boys. When they were younger, Mr. Redmond put up with the saccharine optimism of Radio Disney as he shuttled them to and from hockey practices. Now, “they’re more into the hits. The older guy listens to some hip hop channels, but what’s interesting is he also falls back to the stuff that I grew up listening to like Neil Young. For me, I’m either looking for news and sports updates when I’m stuck in traffic, or maybe some comedy if I need to laugh.”

The Halifax-born Mr. Redmond laughs easily for a guy who made it to the corner office the hard way, selling electronics and driving a forklift at Sears to pay for his college marketing diploma. He went on to spend 17 years at Thomson Multimedia, a European electronics supplier best known for its Technicolor and RCA brands.

He helped the company launch its digital audio and MP3 businesses, a task that helped him move to the U.S.-based Sirius as vice-president of special operations prior to his installation at the Canadian company.

Mr. Redmond’s low-key manner is reflected in his choice of restaurant. The Spoke Club is the type of restaurant that’s hard to find – there’s a tiny sign on the building’s façade and you need to ring a bell to be let in. XM Canada’s offices used to be next door, and the annual $800 membership comes with the right to use the restaurant’s boardrooms should business break out spontaneously during the meal.

“I like it here,” he offers as he carefully picks at a turkey pot pie. “It’s relatively quiet most of the time.”

He has good reason to be cautious at the moment. While Sirius XM Canada has generally enjoyed a good relationship with its subscribers, the company has been under siege, particularly in social media, over its decision to charge listeners an additional $4 a month to listen to its stations from their computers and smartphones. The move was part of an overhaul of its subscription packages, which finally gave subscribers the ability to listen to channels from both of the merged services for a little extra money each month.

“Any time you look at pricing, you’ve got to balance between what you think is right and what the value might be for the customer,” said Mr. Redmond, adding the U.S. service already charges for online access. “We made the decision because costs are continuing to rise. … Like anything, when you make a change you’re going to piss some people off, but we think we’re making the right decision and we’ll do everything we can to make sure we don’t lose a customer because of it.”

The company is making money; in the most recent quarter, it posted a $3.2-million profit compared with a $3.4-million loss a year earlier, and its stock price has more than doubled in the past year. Still, it went into licence renewal hearings late last year warning that its future was dire without concessions from the federal broadcast regulator. As a condition of its first licence, the Canadian Radio-television and Telecommunications Commission demanded that 5 per cent of its revenue go toward developing Canadian talent.

The combined Canadian services paid $52-million in the past seven years, with the money going toward programs that support the creation of Canadian content – $20-million more than Canada’s 400-plus commercial radio stations paid, combined, over the same period. Sirius XM Canada asked to slash the rate to 0.5 per cent of revenue (what terrestrial stations pay), but the CRTC lowered it only a little, to 4 per cent.

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