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.

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Satellite Radio: The Songs Might Not Repeat, But The Merger Rumors Do”

Subscribe: RSS Leave a comment
misanthropic humanist says:

a rose by any name at all

The very concept of satellite radio is artificial. Try to think in general technological terms. What is “satellite radio”?

There are 4 entities that enjoy the same function as in every other configuration, present and historical.

1) A source or broadcaster
2) A destination or listener
3) A medium of transmission
4) A receiveng device

There is nothing besides a particular comms protocol and licencing terms agreed by monopolistic actors thrashed out in smoke filled back-rooms that makes DAB or digital satellite radio anything other than a term of reference. For example, what really distinguishes it from “internet radio” received over a satelite? Nothing, that’s all it is.

To understand this is to understand “convergence”. To fail to get it is to make the mistake that the satellite radio marketeers have made, that ordinary people don’t undersatnd or care about this nuance of protocol and licencing. They just want their music. On their phone, or on their laptop or other mobile device. They couldn’t give a shit for a specific new product called “digital radio” in an age where they are besieged by dozens of competeing “Wi-Fi”, “3G”, “satelite broadband” vectors. It means nothing to ordinary folk.

I think DAB radio has missed its window of opportunity. No doubt the satellites can be retasked to recover the investment through other services, but if I was in “satellite radio” right now I would be thinking about throwing in the towel and moving on to something with a convergent future.

Stu says:

Who’s going to pay for the compatability fixes for the people who bought XM receivers, and can’t receive broadcasts from Sirius – and vice versa? They may not be upgradeable at all.

Satisfied users have no reason to pay.

Unsatisfied users won’t pay.

New customers would get sets compatible with both systems, but won’t be plentiful enough to support the merged business by themselves.

If XM and Sirius thought their business model was just like cable TV, they were sadly mistaken. Any TV set can receive cable with the addition of a very cheap box, that didn’t even have to be bought. The monthly rental is practically invisible.

The options for mobile listening are many and growing fast.

The question is how long will it take before these companies fold – or change dramatically.

fuddco says:

Re: Re:

As a truck driver sat. radio is great! I can not ever go back to regular radio. I am part of a niche market however and with HD radio on the horizon “regular” people will go for that and sat. radio will go bankrupt/merge and offer their service to the transportation industry along with renting out bandwith to other compaines.

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...