XM, Sirius Rumors Finally Bear Fruit As Companies Announce Plan To Merge

from the took-you-long-enough dept

Rumors of a merger between XM and Sirius have been around for pretty much as long as the two companies have been operating — and now, they’re finally true. The two companies plan to merge and meld together their content offerings and technical platforms to create a single satellite-radio provider. The biggest obstacle to the plans is the FCC approval required for it to move ahead, and FCC chair Kevin Martin has made comments in the past that make it look like he wouldn’t approve such a deal. The problem is the way that the FCC looks at competition in this space: XM and Sirius aren’t each others’ only competitors, they also compete with terrestrial radio (whose broadcasters are certain to try and block the plan), online radio, and plenty of other outlets. It’s a concept that perhaps even XM and Sirius themselves haven’t always grasped, but one they’ll be hoping the FCC understands. While a merger probably gives the two companies their best chance of success, it’s far from a magic bullet. They still face the unfriendly economics of running a satellite-based business, and will still carry the burden of paying out on the high-dollar exclusive deals they’ve signed with celebrities and sports leagues. But perhaps an even bigger challenge will be getting all those Howard Stern and Opie & Anthony fans to play nice together.


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Comments on “XM, Sirius Rumors Finally Bear Fruit As Companies Announce Plan To Merge”

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15 Comments
Tyshaun says:

Is this a good thing?

I know the assertion is that satellite radio competes with terrestrial broadcast radio, but is that really the case? Seems to me that most of the folks that I know pretty much went to satellite because terrestrial radio sucked so bad and the choice wasn’t regular radio versus satellite but XM versus Sirius. With the inherent competition between the two satellite providers gone, is this going to lead to a condition similar to what exists in the ISP space today (for a specific user in a specific region):

Lots of dial-up providers (same as lots of terrestrial stations)
– OR –
Most times 1 DSL provider and/or 1 cable broadband provider (same as NEW satellite radio merger)

If that is the case, I don’t even see it as dial-up versus broadband because most people I know with broadband never want to go back to dial-up. The problem with the system outlined above is what we actually see in the real world where the lack of competition in the space means that the cost of DSL and/or cable is probably higher than it should be.

techDirt, if I remember correctly, has advocated on several occassions that the momopolies that exist in the broadband market (for home) is undesirable so why is this somehow more desirable?

leroy says:

merger?

I still predict that the merger will not win approval, but one of the big auto manufacturers will buy XM and manage it correctly. Perhaps another broadcaster like DirecTv will buy it.

Long term, I think the evolution of satellite radio fill follow the path of satellite TV. I think it will become more of a common carrier than a content creator. While XM can create music channels, which is mostly a no-brainer, the rest of their content will be from successful broadcasters, like WLW.

As the market evolves and becomes more understood the content on satellite radio will change. Look at how WGN had to create a satellite friendly version of channel 9 in Chicago (the big hurdle was copyrighting and exclusivity) just like WLW has created a satellite version of itself that says it’s WLW 700am from Cincinnati, but is a totally different creature from what is truly on the air on 700khz.

One thing is for sure, as it exists today, XM cannot survive long term.

“L”

ScytheNoire (profile) says:

i hope so

this would be great news, and would boost satellite radio sales hugely. no longer would you have to choose, you could have it all. after all, how is it fair for other companies to own all these various stations and control content so much? whatever the case, give me it all!

as for O&A, Oppie & Anthony, WORST RADIO PROGRAM EVER. they replaced Rover’s Morning Glory, which replaced Howard Stern in my area, and O&A are just ghastly horrible. not funny or entertaining at all. actually, rather annoying. then toss in that i’ve heard advertisements that are bits stolen from other radio programs. O&A just blow, big time.

Anonymous Coward says:

If whatever Sirius and XM morph into after the merger continue XM’s policy of running commercials I will be cancelling my subscription. I’m paying for the privilige of NOT listening to commercials and I was appalled when I heard from an XM subscriber who called to complain about the commercials and was told “well, we have to eat to.” Well, I’m paying you to eat. If you want to run commercials to get paid, don’t expect me to pay you too.

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