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Would a Sirius/XM Merger Stop The Rot?
from the let's-make-a-deal dept
Shares of satellite radio providers Sirius and XM have been getting pummeled as the companies' losses continue to mount. Despite consumer interest in the product, the companies simply haven't been able to make the business model work -- their customer-acquistion costs remain high and content costs grow as the two companies compete for talent and exclusive deals. We've wondered before if bankruptcy and restructuring would be the only way these companies could survive, but there's a growing clamor for XM and Sirius to merge. There are some benefits such a deal would hold that are pretty obvious: they could quit competing against each other for deals to broadcast sports and other content, holding costs down, and they could shift the customer-acquisition battle from being one they're fighting against each other to one that tries to attract new users in a more profitable manner. There would be some big questions over the deal, not the least of which the challenge of dealing with two sets of redundant satellites and networks, and a user base whose equipment is only made to work with one or the other. It's unclear how a merger would restructure the cost base of the satellite networks, which have saddled the companies with debt. Conceivably, the government could also block a merger between the two on competition grounds, though any such action would ignore the fact that XM and Sirius aren't just competing with each other.
Reader Comments
(Flattened / Threaded)
ATTN TECH DIRT READERS: I apologize
I am the idiot that mentioned NPR which led to the complete destruction of this thread. I owe all of you an apology for my reckless action. I promise it will not happen again.
The only reason I mentioned it is due to the fact that I couldnt care less about commercial radio (yet spouted off an opinion about commercial radio ventures).
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Re: ATTN TECH DIRT READERS: I apologize
so what? it's the public's "airwaves," let the freaks march! lol! No need to apologize. Why, leave room for such comments like "where's the heavy metal channel" and "I'm number 12?" :) It's ALL good.
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Not gonna happen
I think both the FCC and the FTC might have something to say about creating a monopoly in the industry. And although Mel Karmazin likes to spout nonsense about buying XM (in order to give his stock a temporary boost), neither company is in a financial position to buy the other.
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Re: Not gonna happen
......."neither company is in a financial position to buy the other."
Are you serious?? Just because these stocks have a low price doesn't mean their BROKE! Sirius has a WAD of cash laying around and could buy XMSR with little or not trouble. The biggest challenges are the different technologies that are not interchangable and the surplus infrastructure the merged company would be left with. I think it's a 50-50 shot at this point.
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Another case of FCC/FTC screwing America
There should have never been 2 sat radio companies in the first place. There should have been one set of sats/uplinks/radios, with dozens of companies selling different packages to consumers. Sat tv/radio are just not big enough markets to support 2 sets of birds, 2 sets of uplink stations, 2 different kinds of receivers being developed/installed all over the US.
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Re: Another case of FCC/FTC screwing America
That is a good perspective. The same thing happened in cellular. We set up a system where multiple companies with competing technologies had to battle it out for cellular business, while the rest of the world approved one standard for each country and the cellular technology in those countries zoomed ahead of ours.
Sometimes our wide open capatilistic economy results in inefficient markets. You're right, the FCC should have dictated one standard with open acess.
I have used both XM and Sirius, and I think they are both good. If they merge, the selection of stations will be reduced and prices will increase. That's too bad. But if they can't make any money, what other choice do we have?
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Why not offer 12 of so channels for free - with commericals. No monthly fee.
Then offer premium service witha monthly fee.
Special events can be free for the paid premium service but could be puchased on an item basis for other users (similar to pay-per-view events).
I like the idea but can not bring myself to pay $10-15 a month to listen to a radio even if it is commercial free.
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Re: Commercial Free?
Satellite Radio is NOT commercial free (much to my surprise after subscribing). But niether is cable TV (which people also subscribe to)
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growing market
I think both can be successul. The sat radio market has not had enough time to grow. Just now cars are making sat standard. I don't think it will be long before someone makes a small device that lets you switch your XM to Siruis and vise versa. Personally Sat radio is the best thing I bought lately. I got it for Stearn, but listen to many channels. I now get very annoyed when in a car with regular radio because the commericals on the music stations seem to never end. I have listened to XM a lot before I got Siruis and instead of the big guys they are almost the same. Music stations are the same (different names) and they share some channels like the old time radio and discovery channel. I think a merger would be good, but do not think it will happen until XM is going under. Everyone should buy Siruis it is so much better than radio and Ipod.
By the way, that was cool that the thread got so out of hand they torched it. Got to try that again.
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Is there really a market?
Maybe it's just me, but I can't see that there is enough of a market for this. I can buy a cheap radio and get decent reception just about anywhere. And it's free. Why should I now pay for radio? To hear Stern? Please. Anybody with a measurable IQ would not pay for that drivle.
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Re: Is there really a market?
You should pay for radio if you want far more variety and consistency than you can get on FM.
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Re: Is there really a market?
Are you so full of yourself that you actually think anybody cares what you think of Stern. You are obviously affected because you, like many others, can not talk about sat radio without mentioning his name. Anybody with a measurable IQ will be able to think for themself.
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Re: Re: Is there really a market?
Be charitable, sir, the only fact most folk without satellite radios have at their ready when entering a discussion about satellite radio is trivia about howard stern. While a more englightened individual would decline to participate in a discussion armed with such little information, many do not. This doesnt make him elitist, only a member of the seething masses that have such little concept for what it means to discuss and produce illumination that they think they are actually contributing to it, unaware that they are about as useful as a first grader in a quantum physics symposium.
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Re: Is there really a market?
If you listen to it, its a clear difference. Local FM radio has become such a boring compromise. They have such a small market that they have to try and cater to the lowest common denominator, which means the playlists are very safe and boring. And the commercials drive you nuts. Once you have Tivo for TV, your tolerance for commercials drops to zero. Listening to radio with commercials becomes really annoying.
My commute is really short, so I don't have XM in the car, but I listen to it all the time at home thru DirecTV. I think that is the key to value - bundle it with other stuff to reduce the cost.
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Better
I've had both and Sirius is much better than XM. No contest. And they should shut down the Elvis channel and give the bits to Hard Attack.
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Re: Better
As a duel subscriber myself, having both XM and Sirius. I much prefer XM over Sirius, Saying one service is "better" then the other is mearly an opinion.
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XM/Sirius/FM/Etc
I'm "ALMOST" with comment #8 above...
I've had XM for about 3 yrs now, and get really annoyed at FM and AM radio commercials and lack of choice (at least in eastern Massachusetts where I live). I also don't like driving for 2-3 hours in a direction (although I don't drive EAST that far or I'd need an amphibious car) and having to change channels. I have found that since getting XM, I rarely use FM, AM, or CD's in the car.
I listen to a LOT of talk radio--and quite a bit of music--and I *am* willing to pay $10/month for it--because I enjoy it, and I could waste $10/month on a lot less.
As far as the XM v Sirius thing... *shrug*... I use XM because it is what I have had (previously via a roady and now built-in to my Honda), and I like the channel line-up just fine. I'm sure if I'd used Sirius for the same time I'd say same--as long as it had what I want. I get the talk-show personalities I like on XM--and I don't think that they are on Sirius--so that would be a down side.
Anyway... to the topic at the top... merge or not, I'll keep using sat radio... and I hope that XM doesn't sink in the next 4 years before I get rid of the car that has it built in.
To the TechDirt owners: This is a great site... I read it daily--even though this is the first time I've posted on it. Keep up the great work! When will I be able to get audio feeds of this site on XM? :P
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If there was somebody much smarter than me at either company xm or sirrus they could possibly do this.
The xm reciever has to retrieve a program guide every once in a while so there is a data transfer more than just streamed music. There is a possibility for updating the program run on the reciever to play the sirrus stream. Or maybe since somewhere inline from central office to satelite to reciever there is a registry tracker, there could be dual signals transmitted and the reciever wouldn't know the difference... last option is change the satelite transmitter to broadcast a television feed out only *unlike direct tv that recieves also* and they could make money off of the dual satelites, one on radio, one streaming tv stations. it's just digital either way. a large amount of people have tv's in their vehicles anyway, maybe it's possible.
All just suggestions.
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Re: shane's suggestions
I suppose the long run effects could be vastly different services offered in the newly-doubled bandwidth. But... while not having any particular knowlege on the subject, only the background of a computer engineer, it is extremely unlikely that the systems are similar enough or built in such a way that they can be reprogrammed in situ to receive the other streams.
I like your idea of television, though.. that would truly be a killer way to get satellite reception into peoples vehicles, and from there sell other services. But you can fit tons of radio streams in the same space as one video stream... I doubt there is sufficient bandwidth to do this on a substantial scale.
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Re: Re: shane's suggestions
i don't imagine that it would be high definition at all, maybe little like 300 *200, most tv's in vehicles are small 8 or 10 in, it definately wouldn't be HD. Possibly with a long buffer like 10 seconds or so. I'm not sure. maybe somebody will think out the box over at whichever company. >>> however we are talking about a fictional merger.
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Sat radio and choice
In the mid-sized Mid Western city I live in there is little (or no) choice in what I can listen to. No funny, no good music (my opinion) and loads of crap commercials. Since I have had XM, my drive (albeit short) has been rather pleasant.
The combination of the two services would serve to better supply the listeners. There is not room for competing companies, at least not in this market. The cost of equipment is too high for general users and then the cost for subscription. Is there enough difference between the two to warrant them? Probably not, other than Opie and Anthony and Stern, which really doesn't matter for the majority of users.
Combining the two, which will probably never happen, could ensure continued sat radio, more listeners and more recievers. There have been comments regarding providers, but then you throw a whole new mess into the mix, comast, time warner et al that screwed the pooch with cable.
Just my opinion...and most of you think that stinks anyway. :-)
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./..obviously some issues can be discussed without flamethrowers. what I mean, to any smartasses still on this thread, is that not all the particular "some issues" this other guy mentioned, can be discussed without flamethrowers
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Merger
It's already done. Take it to the bank.
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to #8
they didn't tourch this because it got out of hand, all comments were tourched because techdirt accidentlly deleted ALL comments
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"......."neither company is in a financial position to buy the other."
Its called leveraged buy out. Siri is worth 58% more then Xm and could push through a buyout. XM would have a tad more trouble but could also do it as well.
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block the merger make them earn our business
sirius spent 55 to 60 million for howard stern who really can't stay on regulated radio for anywhere near that money.then they have sophmoric shows by jim brewer who was a d level star on saturday night live, remember goat boy.
they have raw dog comedy & other 4 letter using programs.
Hey I didn't buy or subscibe to sat radio to hear 14 year olds swearing, I can get that for free walking down the street. concentrate on diversify music & content, dump stern and bring our rates down 6 or 7 dollars a month, you might actually make money!
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