How Can New Satellite Radio Merger Analysis Be 'Independent' When The NAB Paid For It?

from the curious-how-that-works dept

Research firm, The Carmel Group, has come out with a new report that supposedly tries to show why having XM and Sirius merge would be bad for consumers. The group also put out a similar report back when DirecTV and EchoStar tried to merge -- and some credit that report with killing off that merger. What the report apparently tries to highlight is that as Sirius and XM competed with each other, they continually tried to one-up each other with new features and services -- thus suggesting that competition between the two was strong. Now, obviously, we feel that competition like this does drive innovation, but it brushes aside the fact that competition also comes from terrestrial radio, iPods and other forms of entertainment. The folks over at Orbitcast point out that they could just as easily create a report highlighting how terrestrial radio has changed as it competes with satellite radio as well. Still, the silliest thing about this "research" is that the press is reporting that this is an "independent" report -- despite being funded by the NAB. We've already covered some of the dirty tricks the NAB is pulling in trying to prevent the merger, but to call a report that they funded "independent" isn't exactly realistic. The group is squarely against the merger, though the stronger they come out against the merger, the weaker their argument is. If they really believe that satellite radio doesn't compete with terrestrial radio (who the NAB represents), then why are they so concerned about the merger? If it would really lead to higher prices for consumers and less service, wouldn't that be a good thing for terrestrial radio? It would mean that more people would stick with good old fashioned terrestrial radio rather than bailing for satellite radio.

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  • identicon
    Chris, 3 Apr 2007 @ 4:34pm


    I work as a tech for a 'terrestrial' radio station, and I'll admit that we do compete with satellite radio. The problem I have with the merger is that lots of people will be losing jobs. I'm pretty sure XM with their 20 rock channels and Sirius with their 15 (those numbers are just guesses, but I know they both have quite a few) won't be keeping all 35 channels of the same genre after the merger. This means lots of people will be losing jobs, not just DJs, but also the techs and such who run those shows on the channels that get cut. I don't know if that matters at all, from a legal standpoint, to decide whether a merger should go through or not, but it's what concerns me the most. Some of those people are friends of mine!

    reply to this | link to this | view in chronology ]

    • icon
      Vincent Clement (profile), 3 Apr 2007 @ 5:04pm

      Re: Radio

      If XM and Sirius don't merge, even more people will lose their jobs when one of the two companies files for bankruptcy protection. I pick the lesser of two evils.

      reply to this | link to this | view in chronology ]

  • identicon
    Overcast, 3 Apr 2007 @ 5:03pm

    They want it to be 'independant' of people asking any questions, so hush!

    reply to this | link to this | view in chronology ]

  • identicon
    Mike, 3 Apr 2007 @ 7:08pm

    Let it Be

    I say Let it Be. Personally I'd love to have both XM and Sirius. They have already pledged not to raise fees and offer more. What more could you ask for. If you don't like it, you don't have to buy it. We should let the wheels of capitalism do what they do, instead of going and knocking on the government's door to stop something just because we don't like it.

    reply to this | link to this | view in chronology ]

  • identicon
    MICHAEL STEWART, 3 Apr 2007 @ 7:34pm

    xm/sirius merger

    i don't want them to merge.

    i've been a subscriber since early 2002 and if i wanted any sirius content i would subscribe to them as well as i listen to xm for 60 hours weekly (i drive a truck)....

    karmazin's network is a dog literally....

    he's paying howard 100 million a year for 15 million in revenue not counting stock, shrewd business to the max....

    i don't think it's going to happen because both stocks are heading south...

    reply to this | link to this | view in chronology ]

  • identicon
    steve, 3 Apr 2007 @ 8:21pm

    Chris ?

    i am a Radio station consulting engineer. i listen to XM, a merger would not cause many jobs to be lost if any because. most if not all shows are voice tracked. automation runs it all by computers. they hardly have any people there now as it is. most costs are from the ASCAP and BMI music fees, studio facilities and the up-links. XM radio is very much a competition to old time radio. no fading no static and mostly no commercials. times are a changing the the NAB refuses to see the train on the tracks. hmmm just like the RIAA.

    reply to this | link to this | view in chronology ]

  • identicon
    Larry McAllister, 3 Apr 2007 @ 10:04pm

    David vs Golliath

    Perform a SWAT analysis on the two businesses, and it's not tough to see why NAB and traditional radio players are trying to pursuade lawmakers.

    SAT requires more capex, but then they have substantially lower operating costs by centralizing operations. The quality is more predictable (digital meaning you either get the signal or you don't) and also a common operating platform for the two rivals makes a lot of sense.. XM/Sirius is also digital format, and by being digital, they can offer content that is not only audio... Stock quotes, news updates, and song titles scrolled across the screen when they first launched.

    While this tech existed prior to XM/Sirius, FM stations didn't start implementing until Sat providers started using it as a competitive (read: value added service) advantage. But at it's core, it's a battle between digital vs analog... Because it's digital, Sirius can offer more than the analog players can. Recently, they said they are also going to start ofering TV, and the FM players just can't play catchup that quickly. Sure they just started implementing HD Radio, but those lower operating expenses really play into XM/Sirius's favor.

    Once it hits critical mass, its not tough to imagine more commercials, which could subsidize the entire business- free recievers and the whole gammut. I would like to hedge a bet that this is what NAB etal are really afraid about.

    We need more companies that challenge Goliath and keep the innovation going.

    reply to this | link to this | view in chronology ]

  • identicon
    PNess, 4 Apr 2007 @ 7:15am

    "he's paying howard 100 million a year for 15 million in revenue not counting stock, shrewd business to the max...."

    you do know that 15 million in revenue is about 100,000 subs. are you saying that when howard announced sirius was at 1m subs and they are now at 6m+ that only 100,000 people signed up. LOL and you claim he has shrewd business abilities.

    1m at least. 1m x 12 months x 12 bucks = 144m
    2m at least. 2m x 12 month x 12 bucks = 288m
    3m at least. 3m x 12 x 12 = 432m

    also how much of the 6m got sirius because of the BRAND name that howard made sirius. they went from a brand name recognition of 30% to xm 70% to a better then 60/40 split

    reply to this | link to this | view in chronology ]

  • identicon
    JustMatt, 4 Apr 2007 @ 7:44am

    My 2 cents

    This originally was going to be a rant about all the things wrong with radio. Instead I'll focus on the one thing that can be changed.

    Dear Olde Timey Radio,

    I don't mind paying a few bucks a month to actually listen to music (what a concept) and to have more than one local station playing each genre of music. What really made me change was that you've forgotten why adults listen to you.

    I ***LOVE*** that I can get current traffic and weather every 5 minutes from Sirius. I'm not really sure what value is provided when the local radio stations only read the traffic once an hour during the morning and afternoon rush. Even in a big city most people are either already at their destination or hear about problems too late to change their route.

    If you want to get serious (no pun intended) about competing then provide me something I can use. Scrap a few minutes of random DJ filler every hour and give me traffic updates every 5 or 10 minutes.

    Until you provide me with a service I can use I'll stick with Sat radio thank you very much.

    reply to this | link to this | view in chronology ]

  • identicon
    PNess, 4 Apr 2007 @ 10:22am

    Wana see what carmel group said last year- BUSTED!

    HAHAHAHA SO BUSTED....see what they say before they were paid. s-competitors.html

    in a Carmel Group article written in October 05, 2005:

    "...satellite radio, with more than seven mil. subscribers, and its competition comes in the form of traditional analog AM & FM radio, as well as burgeoning services like MP3 players, terrestrial radio, and video- and Internet-to-the-vehicle. "

    now after BEING PAID BY THE NAB

    "Sirius and XM make an argument that is critical to the success of this proposed merger. They state that their competitive landscape presently includes all forms of terrestrial radio (i.e., analog AM and FM, digital HD and Internet radio), as well as digital services such as MP3 devices and music-to-cellular telephones. This position is ludicrous. In fact, nothing could be further from the truth."

    reply to this | link to this | view in chronology ]

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