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Satellite Radio Merger Rumors Gather Steam, Again
from the less-talk-more-merger dept
Despite coming off their strongest year yet, the performance of satellite radio companies Sirius and XM still isn't quite good enough, and the companies continue to be the focus of merger talks. As we've wondered before, though, would a merger really help? The fundamental problem the companies face is that the economics of a satellite-based business are quite difficult, given the high cost of infrastructure and large initial outlay required. This is something that won't change, regardless of any merger. And despite execs from both companies saying a tieup could make sense, plenty of obstacles remain, including regulatory issues. All that aside, though, would merging really help all that much? The common thinking is that the companies would be able to combine their overlapping music programming into one, and eliminate redundancies. But it's hard to believe that operating so many music channels is really a significant cost for either company -- the real programming cost is in the millions they're throwing at celebrity hosts like Howard Stern and Oprah Winfrey, and to get exclusive deals for major sports leagues. Perhaps the thought is that by reducing the amount of competition in the marketplace, they could eventually lower the cost of these deals, but it seems awfully optimistic to think they'd be able to do this, and significantly cut costs, very quickly. Particularly when you consider they're not competing only against each other for these deals, but against terrestrial radio and other media as well.
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the problem
There's no demand because there's no value added. People who listen to the radio couldn't care less for the quality and they couldn't care less for the number of channels. Most listeners have it on as background noise while they work and usually tune to one station and leave it there forever. Radio listerners are notoriously loyal and very hard to move from one station to another. Also there are millions, okay I'll stick my neck out here...billions of cheap FM radio sets in the world, most of which were built to a quality that mean they'll still be here in 2030.
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and the solution
What is needed is to include the existing listeners. A $20 down converter with a cheap LMB and microwatt remodulator that can clip onto an existing FM radio and make it "satellite capable".
Then you "phase in" your new technology over time. That's how the BBC handled the transition from 405 VHF to 625 UHF in the 1960s
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The Reality
Mr Humanist, if you don't subscribe, don't slam it. Local radio in many cities has become as bland and commercial-filled as it has ever been. I'm in my car a lot and I can't imagine not having it now.
There are a few technical issues for sure - you lose the signal when you're under a roof like at the gas station, or if an 18-wheeler passes between you and the southwestern sky, but considering the excellent music quality and range of programming, these are minor issues.
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Sirius Subscriber
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xm is great
a merger could be useful in that they wouldn't be fighting each other but profitting from each others strengths, while their weaknesses wouldn't really hurt them anymore.
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XMListener
I don't know what kind of administrative overhead XM and Sirius can save by a merger, but I would imagine advertising costs would drop significantly if they aren't advertising against eachother.
My $0.02.
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Re: The Reality
I aint slamming it Dan, it's the future in my eyes. Just how to get there. I was even involved briefly in developing some technology for it. It makes me very sad to see it falling by the wayside. But the fact remains, over here in Europe it's dying on its ass because of lack of demand. :(
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Sirius Subscriber
Listening to FM is atrocious and I don't want to flip through my iPods list or burn CDs or listen to the same few songs over and over. An iPod on shuffle? OK maybe, but I still know all the songs and I don't get to hear a knowledgeable DJ come on every now and then w/some interesting tid-bit about a song or artist I just heard.
I like the radio, I hate commercials, and I don't mind paying $ to fix that "problem" with FM.
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I love XM
I wonder how similar the XM and Sirius formats are. Would all of one companies radios work with the other's or would some sort of upgrade be required?
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Went Sirius and Never Looked Back
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I can listen to XM 150 on my way to work (about 30 min drive) and only hear one set of commercials that last maybe a minute. Compared to AM, it's nothing :)
So, yes I love it, wouldn't mind a merger if it meant no commercials.
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xm vs. local radio
so what do I hate about XM:
1. everyone sounds like they have a bad lisp
2. it's the audio version of all the spam that my ISP filters out. And they want me to pay to hear spam.
these two companies cannot merge with the laws currently on the books. All this discussion is them trying to get free promotion.
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would love a merger
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Sirius is way better
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XM, Sirius
My most listened to channel seems to be "nosignal"
and when I do have a channel their playlist appears to be pretty short
I don't listen to the "celebrities" because if I wanted to listen to childish chatter I'd keep my daughter in the car at all times ;)
It annoys me (out of all proportion probably) that while in FM mode I get track details on the radio display, but with Sirius I just get the station name - seems the wrong way round somehow.
I'd love to see something like Pandora and infinite personalisation, or at least a way to tag-and-share tracks I like (from the car and ten sync bck to them somehow)
Will a merger help... maybe if they can spend the money on R&D and better service instead of a marketing war.
Will it happen.... oes common-sense ever prevail?!
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Satellite Radio
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sirius signal
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hi
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hi
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