slice of koh

The music industry has gone through a transformation over the past decade.  A small P2P file-sharing program called Napster and the Internet made music distribution much easier and at much less cost than the traditional albums and concerts.  Concerts are still alive and well, but major music labels like Warner have struggled for years to fight rather than adapt to consumers’ shift towards getting their music digitally rather than physically.

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It has been a long time since I have built my own custom computer.  Actually, the last time I built a computer before Neptune (my current desktop) was during high school when I was at an engineering camp for girls.

Neptune was built in June 2008.  My 5-year old personal laptop was showing strains of age, and I wanted a bigger screen and more power in order to get back into digital art and photography.  I also did not want to spend more than $800 at the time although currently my setup with monitor is well below that.   Although I probably could use a better graphics card, this set-up works fine for blogging, watching media, and doing non-professional media design.

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Recently, I’ve commented how stupid Liberty Media was to invest in a dying digital media.  Well, it seems like Mr. Malone is not looking for any synergy with Sirius but looking for a passive investment that could give a good return for years to come.  

Sirius XM has about $6 billion in tax losses according to SEC filings.  Libery Media would not be able to deduct $6 billion from their taxes due to some IRS regulations.   Sirius XM can tap into those losses at a rate of $580 million per year for 5 years , then falling away to some $250 million per year for the next 15 years.   There is also another IRS rule which says that the acquiring company (i.e. Libery Media) can only take advantage of losses if they own more than 50% stake of the business.  Sirius XM limited Malone’s stake for 40%, and this stake cannot rise to more than 49.9% in the next 3 years.  Thus, Sirius XM’s tax position is safe for now.

Additionally, the interest rate on Libery Media’s loan to Sirius is a whopping 15%, a pretty solid return if Sirius somehow increases their subscribers and revenue.  

I still think it was a stupid loan even though it made Liberty Media the biggest shareholder in Sirius for very little money.  If Sirius board could find alternative means of funding or a different proposal, it has the right to terminate this investment agreement on April 15, 2009, but Sirius would have to pay Liberty Media $7 million termination fee.  That’s a pretty expensive 3-month lifeline.

Below is an entertaining yet informative video on the credit crisis.

[vimeo]http://www.vimeo.com/3261363[/vimeo]

I really should not be spending any more money, but decent PC games for less than $12 with free shipping from Newegg (one of my favorite online dealers) is pretty hard to pass up. Here are just a few that I ran across.

Jade Empire Special Edition PC Game Microsoft


Guild Wars: Game of the Year Edition PC Game NCSOFT


Guild Wars: Factions PC Game NCSOFT


Guild Wars Platinum Edition PC Game NCSOFT


Splinter Cell/Splinter Cell Pandora Tomorrow D PC Game Encore Software


Splinter Cell Double Agent PC Game Encore Software