Satellite Radio: The Songs Might Not Repeat, But The Merger Rumors Do
from the play-it-again-mel dept
Sirius CEO Mel Karmazin has again mentioned the possibility of a merger between his company and rival XM, adding that he doesn’t think regulatory issues would be a problem given the popularity of devices like iPods — showing a new understanding that the two satellite radio companies face more competitors than each other. The idea that the two companies could be better off as one has been floated before, but it’s hard to see just how it would help. It seems likely that the companies’ biggest obstacle at this point isn’t fending off competition from one another, but growing the overall satellite radio market and making it more viable. Certainly a merger would allow XM and Sirius to cut operating costs by eliminating redundancies, but the cost of operating and maintaining satellites is quite an albatross for the companies to bear. Like other satellite ventures, they may find eventually declaring bankruptcy and letting somebody start over without the huge initial capital costs.