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Justice Dept. Approves XM/Sirius Merger
Ripit writes "Just yesterday the Justice Department approved the merger of Sirius Satellite Radio and XM Radio, a Sirius takeover to the tune of $5 billion. The transaction was approved without conditions, despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry. 'In explaining the decision, Justice officials said the options beyond satellite radio -- digital recordings, high-definition radio, Web radio -- mean that XM and Sirius could merge without diminishing competition. "There are other alternatives out there," Assistant Attorney General Thomas O. Barnett said in a conference call. "We just simply found that the evidence didn't indicate that it would harm consumers."'"
Am I missing something? This is like Comcast and Time Warner merging. There wouldn't BE any more competition.
"We just simply found that the evidence didn't indicate that it would harm consumers."
...since Satellite radio has so few consumers...
That's great. I wonder how long it will be before the XM receiver in my car becomes worthless? I love the reasoning given by the government here. You'd swear that there was no investigation done at all, but of course that can't be true.
End of lesson. You may press the button.
Up to the FCC now to stop this megamerger. With Opie/Alex Keaton clone Kevin Martin at the helm I'm not expecting much deep thinking there tho.
- js.
XM & Sirius asked the justice department for approval over a year ago. Why on earth did it take them so long to approve this? Here are a few other mergers that the DoJ approved in under a year: Exxon/Mobil, AT&T/Bellsouth, Chevron/Texaco, Sprint/Nextel, Whirlpool/Maytag, etc.
Of course a number of these other huge mergers didn't require FCC approval as well. The XM/Sirius merger now as to wait for FCC approval, so it's going to end up being a lot longer before this is all said and done. It absolutely disgusts me that XM/Sirius is taking so much longer than the consolidation of the oil industry, telephone industry, etc. This will end up being the longest approval process in history. What justifies taking so long when mergers involving bigger economic concerns like oil took hardly any time in comparison?
HDDVD & Blu-Ray = XM and Sirius. DVDs = Terrestrial radio.
The adoption rate of XM and Sirius have been slowed because of the close competition. Many consumers simply could not justify the purchase of one over the other. I'm in this group, I would love to have a subscription to a satellite radio service but I liked certain aspects of each. This is very close to the high definition wars slowing adoption rate.
The difference is the same companies have stake in both current DVDs and their high definition counterparts. The longer the war went on, the more movie-makers lost. Terrestrial radio companies are upset because this could mark the beginning of the end.
It seems to me that the ruling was based on the variety of audio entertainment available to the consumer. It didn't focus on the specific industry of satellite radio; it centered on the fact that satellite radio is competing with land-based radio, CDs, podcasts, web streaming, HD radio, etc. With the perception that satellite radio is one of many versions of audio entertainment, this ruling makes sense to me.
AT&T-Bellsouth merger: 299 days to be approved. $85 billion, controls 22 states and 70 million subscribers.
Chevron-Texaco merger: 326 days to be approved. Don't know the numbers, but
Sirius-XM merger: 426 days to be approved (might be off by 2-3 days, have not seen an official figure)
Now, why would the government allow such giants to merge with such rapidity and form such major monopolies, but delay Sirius-XM for well over a year, when its a luxury (unlike oil or telephone service) that affects so few? Answer: This is the US government's continued persecution of Howard Stern. Clear Channel (who are dedicated to buying out and eliminating not only all local radio stations, but all local concert venues as well) should have been laughed out of any hearings on this matter at once.
I'm a Sirius subscriber, and in almost all cases, I find these kind of mergers to be bad for people like myself. But in this case, I think that the cost of market confusion, particularly with buying new cars, is more a burden than any perceived loss of choice. I find it intensely annoying to have one car Sirius capable, and the other XM capable, and now way of having both without $600 in after-market installation.
That said, if xSiriusM decides to raise prices or add back advertising or what have you, people will desert them in droves. Terrestrial radio is only worse because they have made a very strong effort to make satellite radio better. If they move towards a ClearChannel-esque service model, they'll be out of business in a year. Particularly ads. God help them if they put in ads.
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This really doesn't hurt consumers. If anything it will help grow satellite radio. Right now consumers have to choose between whether they want to listen to Opie and Anthony, or Howard Stern. Choose between the one that has decent electronica, or the one that has a channel for each decade. With the merger, consumers win... so long as Xirius (I think thats a cool new name) doesn't decide to jack up their prices.
That shows you that most people don't know what a monopoly is. As long as you don't depend on satellite radio, your opinion doesn't matter. Listen to your free radio. That given, it shows that the 2 companies merging will not effect anyone who needs to have their radio.
Now what about Chevron-Texaco? People depend on gasoline in order to live (transportation) and I've only seen price go up. There are obviously other factors that play a role in gas costs; but when you look at that from a simple thinker's viewpoint, it shows that companies are merging all the time.
My opinion is also, that the NAB got so involved in stopping the merger because they don't want to deal with competition with satellite radio as a whole; they were happy that the 2 companies were fighting over subscribers in order to survive financially. Now they might actually have to compete with an alternative service.
I was a wee little shitling when cable television came into play, but I thought I heard something similar to this may had come up. Someone correct me if I got my facts wrong.
I know one of the major reasons they want to merge is to help take care of the billions they have loaned i n order to get this service up and running, and at the same time lower the cost-per-month for subscribers.
I say this as an early XM subscriber from 2001, but these companies will have a hard time breaking even, even as a single company. There is too much competition from free radio and mp3 players now. hd-radio is the digital version of free radio and that will push satellite radio further into the niche category. HD-radio will effectively triple the number of public stations available in most urban areas. Even clear channel will have a hard time making all the new commercial radio channels bland. I realized the XM's real problem as I was driving in my car, listening to xm radio, not through an xm radio, but through its internet feed through my broadband card. Today, I can almost get my pick of thousands of stations today (many with better sound quality than XM) while I'm mobile. Think about what's going to happen when Verizon and AT&T get the new frequencies they just purchased in the recent auction. I know that most folks despise free commercial radio (outside of the public stations), and for people in remote areas, XM/Sirius might be your only option, but rest assured, things will get better. And this merger will help. For one, they might be able to reduce the overlapping stations and use the bandwidth for more alternatives (like bringing back edgier stations like ngoma and xm-unsigned and music lab).
--- http://davidnehme.blogspot.com
I haven't paid any attention to the business side of satellite radio. Was either one of the companies in financial trouble? If they were both profitable, why allow a merger?
Mea navis aericumbens anguillis abundat
I used to love my XM. I still do, but I got this cool little gizmo called an "Ipod Shuttle" for Christmas and find I don't listen to XM as much as I used to. Hmmmm ....
O & A
We had Sirius service for a year. My wife tends toward country, and she hated every station they had. Now, I am not into country but even I could tell that all of the country stations on Sirius were for older crowds and did not compare to what I hear on the various radio stations.
Meanwhile, I used to listen mainly to their christian rock station. They then drop it and about a dozen other stations. They encouraged me to listen to Spirit. That'd be like dropping the headbanger's station and telling a metalhead to listen to the Elvis All Day station. Okay, so both may technically fall under rock. But they're worlds apart. Siriusly, you might as well just try towing a 20ft trailer with a Prius.
Stupid, they totally don't get their own markets.
***
Maybe this merger will improve the quality of their programming.
Am I missing something? Exactly what business is it of the government's that these 2 companies are merging?
So let me get this story straight: 2 companies create a market where one previously did not exist. They are giving consumers yet another audio listening option. They're creating choice. Then for business reasons they decide to merge. Now explain to me where the government has any right to get involved?
Granted, it's satellite so there's a "public airwaves" argument to be made. However, with homesteading rights the government should only be concerned with who owns the frequencies and not how the owners are running their businesses. We can wax poetic all day long about whether this merger is a benefit to consumers or not. That's fine. But to involve the force of the Federal government in a business transaction seems unjustified to me.
That's what needs to happen. People were afraid to go with XM or Sirius because they are incompatible technologies (BluRay, HD anyone? VHS/Betamax?). We don't want to have a bunch of incompatible technologies because it will hurt technology development. We don't want to have just one company because it will be a monopoly.
My suggestion: Force all the satellite radio companies to use the same technology. They can either buy time on a satellite or launch their own, but they have to all agree on one format. They can charge whatever they want, and the competition between networks can keep prices down. The fact that they are all compatible means that you can switch from one to the other if you want to. Hardware manufacturers can just make ONE satellite radio that will work with all of the different providers. So now cars that want to have built-in satellite aren't tied to one company.
You're dreamy. Now there's 50% less competition for those of us who always aspired to starting up a satellite radio service.
"Win treats sysadmins better than users. Mac treats users better than sysadmins. Linux treats everyone like sysadmins."
Anything that staves off radio domination by Clear Channel is a good thing.
XM and Sirius are premium services and thus will probably could not have survived on their own.
XM radio helped keep people in New Orleans informed long after all the terrestrial radio stations were shut down. Yet Clear Channel tried to get legislation passed to prevent satellite radio from providing local weather and news information.
(-1, Raw and Uncut is the only way to read)
How could it be worthless?
It's not like XM or Sirius would destroy their infrastructure (satellites) simply to sell more receivers. Besides which, if they made every radio receiver obsolete, how would they sell you their service?
What they'll have to do, at least for the medium term, is support a unified service that is transmitted in both infrastructures. In the longer term, since the frequencies are governed by the FCC, you'll probably see dual-receiver tuners, sort of like the AM/FM tuner in your car.
Do I wish there were more satellite services? Yes. But I'd rather have 1 than none. And XM and Sirius were probably less than 18 months away from one of the services declaring bankruptcy which would be terrible for consumers, since it would scare away investors from "new" forms of radio that are badly needed.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
I know this is not the forum for investing, but does anyone else see Sirius and XM being really attractive right now? We're on the verge of having FCC's blessing and SIRI is trading at $2.99? The merger is the only way that both companies can stay alive and make a profit, and they just got the govt's OK to go through with it. I think this is a clear winner. Just my $0.02.
"the options beyond satellite radio--digital recordings, high-definition radio, Web radio--mean that XM and Sirius could merge without diminishing competition"
Yeah, they've been using that rationale a lot lately.
It's like saying it's OK to like saying that the options beyond gasoline--coal, natural gas, bicycles--mean that all the oil companies could merge without diminishing competition.
Digital recordings: you mean like buying and playing Howard Stern CDs instead of listening to what he's saying today? Not that what he's saying today is exactly profound, but timeliness is an essential component of "radio" as we know it. Web radio: it's probably possible to get it in your car, but I don't know exactly how and it's probably not cheap.
"How to Do Nothing," kids activities, back in print!
From XM's web site: "The pending merger is still subject to approval of the Federal Communications Commission."
Perhaps someone with expertise in antitrust could enlighten me as to a silly question:
About five years ago, satellite radio was unheard of, or nearly so. For a time, there was only one company offering service. No one at that time would complain of this being anti-competitive or a monopoly, that there was only one choice in the market.
But now, after two companies decide to merge, suddenly threatens to become anticompetitive and needs government approval. Why is the first case ok, but the second case not?
I know not everyone will agree with me on this, and they are entitled to stick it to me after they read this post. That being said, I have been an XM subscriber for a year now and am excited about this.
Radio needs Satellite radio! For the last decade, I have been striving to find quality programming on radio that wasn't lacking the polished professionalism of most college radio stations and at the same time wasn't the over-researched, payola driven, target market homogenization of your typical Clear Channel station. That was found in Satellite radio for me.
The key differences with satellite radio and AM/FM these days is this. AM/FM is losing listeners every day. Advertising is down 15% in the last few years and listeners are turning off the AM/FM radio for other mediums. Instead of taking a chance with formats like in years past, stations owned by large corporations and disappointed shareholders instead become more conservative and try to be less distinguishable than before to attract the largest number of listeners. What happens is a large number of stations in a given market end up with eerily familiar formats, with little to no variance in station programming.
Satellite radio has taken a different approach. With such a comparatively smaller audience nationwide when compared to there traditional counterparts, Satellite radio will do anything to attract listeners, and that has been through offering dozens of niche stations with specific programming. It's fantastic sitting in my car and listening to Deep House music in one station, NCAA March Madness another, and obscure underground classic from another. It's what FM used to be 13-40 years ago in my opinion.
In short, FM is playing conservative to keep what listeners they have and are losing daily, while Satellite is taking chances to draw whatever listeners they can get.
Why is this merger good? Both stations are fiscally hurting, and a quality medium like Satellite radio needs to be strengthened against not only AM/FM/HD radio, but iPods/Podcasting, and streaming radio online.
XM offers a service to pilots called XM Weather - Aviation that is invaluable to private pilots. Even though it takes a pretty high end GPS receiver to get the data (>$2k), the value of seeing winds aloft, freezing temperatures and storms can sometimes means the difference between literal life and death and there is no real time alternative.
I really don't think that at this time satellite radio offers any real competition to AM/FM radio because most people don't want to pay for radio when a decent alternative is available for free. For some, such as OTR truckers or long distance commuters, having continuity of radio programming is pretty nice.
If satellite radio was a service the general population couldn't do without I'd be very concerned about a monopoly situation but it isn't. From my POV, anything that keeps the XM weather active is okay by me.
Even if XM and Sirius combine, there is little incentive for the resulting company to raise prices. Neither company has ever made one thin dime in profit, and the companies, either combined or individually, are still quite some distance from doing so. Even with a merger, the company will still be in no position to risk pissing off a sizable portion of its customer base.
I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
Anybody know if the two systems can be made compatible without swapping receivers? I have XM built in to my car. I'd hate to have it stop working after the merger.
That is not accurate.
http://en.wikipedia.org/wiki/XM/Sirius_merger
They are restricted from having both licenses. The agreement does not, as you claim, say that "no merger would be tolerated."
ever reported a quarterly profit. The two companies have always lost money. If they don't merge it is likely at least one of them is going to go bankrupt and the other would probably just take over some of their previous customers anyway. I don't see why everyone is bitching, them merging is a good for both them and their customers.
Also I don't know this for sure, but since Sirius would be the buyer here wouldn't they make sure their combined network is compatible with both existing Sirius and XM hardware? Changing that would only piss their customers off, so those of you who already have Sirius or XM shouldn't need to buy new stuff.
The channels go into the 220 something range on XM, and they have over 170 channels. They've updated, moved, removed, added, etc in the past, and the unit just updates to the new channel line ups. I know some of the units would channel jump... let's say they just moved a channel from 70 to 85, and 70 is blank now, if you tune it there it would auto-change to 85... forget what model had this. But if your radio didn't, it just wouldn't show 70 as an option, and if you typed it in it would switch back to the channel you were on.
The only thing is the older units would be screwed considering Sirius did this S-Plex thing where it would slim down the bandwidth of say a talk channel and allow a music channel more bandwidth for better sound (really didn't seem to make a difference though). The only other deal is sirius and xm are in neighboring frequency bands, but sirius has the lower half and xm the upper half (might be the other way around but same point)
You're right, but that's not necessarily a bad thing in the long run.
Let's take gasoline. The rising prices is bad for the consumer, except that other forms of energy will suddenly become cost effective and we may actually have alternate fuel automobiles that make sense. Cheap gas does inhibit alternative forms of energy and transport.
If we end up with a real alternative, it's worth it in the long run.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Do you really think there is some mythical person out there wants to start a satellite radio company, but is put off by the competition, whether it's one or two companies??
I hate the break the facts to you, but XM and Sirius are both losing money, and without this merger one of them (probably XM) would go broke anyways. Satellite radio is an expensive business to be in, and there is plenty of other competition for your entertainment dollar.
The idiocy on this thread is astounding. I'm sorry I had to just destroy you.
As long time Sirius subscriber I can't wait for the merger (FCC will try to stop it I suspect). I have XM on DirecTV and Sirius in the car I'm looking forward to a new radio that'll pick up both.
While i agree in principle, your choices are a bit limited in the portable broadcast market.
AM/FM or sat..
---- Booth was a patriot ----
DoJ ruling is just one hurdle, the merger still needs to be reviewed by the FCC. There is a theory that the FCC is looking for more oversight on satellite radio content in response to lobbyist pressure from traditional radio. I really hope that's not up for discussion - the ability to hear unedited content is one of the draws of satellite radio for me. I'd still keep it though even if it was edited, just for commercial-free music it's worth it for me. (No I'm not a satellite radio shill, just a happy customer. I spend a couple of hours/day commuting, and I find I go a little nuts when I'm without the satellite - I swear there are more commercials than content these days. NPR is OK, but frankly boring after a while.)
They are all in direct competition for people's ears as they commute.
The manufactures have been force feeding the receivers on the auto manufactures as too few opted to buy a receiver. I don't have any data on the number of subscriptions dropped when the free trial ended. The fact is they are not meeting their subscription goals by a long shot.
The competition is not in the commute, but the long haul truckers. They are overpriced to compete effectively for the 30 minutes to an hour commuters spend listening. Some people with longer trips may consider a subscription, but most just don't spend the time on the road to justify the cost.
Does anybody have figures for the number of factory installed receivers which have dropped the subscription?
The truth shall set you free!
FLAME ON!!!! Who cares. They both suck (O&A, more-so than Howard, in my opinion).
bork bork bork!
As a Sirius subscriber, I'm kind of excited for the prospect of the best XM channels coming over. As long as they don't start jacking up prices, I'm fine with this. If they do, then it's back to CDs/Radio/Ipod.
as a consumer, i have Sirius in my car and pay 12.99 a month. im a huge stern & NFL football fan. I also like Baseball and Golf.. My wife has XM in her car which receives the other programs. Why should I the consumer want to pay another $12.99 to activate the XM in her car??? if they merged it would only cost me 6.99 to activate the XM in her car. Nothing More to say...
I don't see how... Unless the moderator is some sort of satellite radio fanboy.
Neither company has posted a profit, true. But both companies have spent crazy to "acquire talent" to "build marketshare". Sirius paid millions for Howard Stern, XM paid a bundle for Opie and Anthony -- how much market share did either gain them? Both would be profitable without the expensive content.
I hope the FCC approves the merger on the condition that the combined companies must yield one of their radio licenses back.
there are 3 kinds of people:
* those who can count
* those who can't
A monopoly in a market nobody cares about isn't much of a monopoly. They've been pushing sat radio hard and the majority of the public just doesn't give a crap. myself included.
Your analogy is god damn stupid. A more apt analogy would be it's not OK for the (let's pretend) two hydrogen fuel cell makers to merge. Satellite is a small market, and a struggling one. More imporantly as to the stupidity of your point, entertainment isn't all that important and this is but one single delivery mechanism for it.
With Traditional Radio, the listener is not really a consumer, the listener is the product. Companies buying space for commercials are the consumers, listeners are just a piece of crap on the shelf at walmart. Radio stations create their products(you) by paying to play particular content or creating their own with shock jocks, they make money when you listen because someone else wants to sell stuff to you.
Sattelite radio may be different, I do not know for sure as I do not have it, but I am assuming that the amount of commercials is way down from traditional radio, or non existent.
I haven't thought through the competition angle on the satellite radio yet, but my gut instinct says that this is good for me. I want satellite radio, I have not purchased a receiver and service plan yet as I want things that are only available on one or the other. Football, listen to Sirius, Baseball, you have to listen to XM, NBA sirius, NHL XM, bbc coverage, listen to one, cspan, the other. I could go on, the list of items which are only avialable on one or the other is long enough that I will not buy satellite radio until they are all available on one network. Hopefully in the not to terribly distant future, all things I want will be on Xirium or Sxms, or whatever they call the combined network so that I can get a radio for my car.
More imporantly as to the stupidity of your point, entertainment isn't all that important and this is but one single delivery mechanism for it.
Silverware isn't all that important, so henceforth we shall merge all forks and spoons together into sporks. After all, if you don't like it, you can still use skewers to eat your food.
I have spent the last 15 years off and on travelling heavily throughout Canada and the USA by road, and at first satellite was a god send. I originally was an XM subscriber but eventually switched to Sirius. At first I really enjoyed XM, but the competition between the 2 companies for exclusive sports broadcast rights caused turmoil for us die hard sports fans, and you either ended up buying a unit for both companies and subscriptions to both, or you switched back and forth.
In the meantime, AM and FM radio has gone downhill so fast it's unlistenable now. What with all the generic programming, massive amounts of commercials, and the fact that you constantly have to tune to different stations if you are driving any distance. I've always wondered why they hadn't come up with a way to expand the radius for their signals, whether via repeaters, satellite stations, or some other method.
To be fair, satellite programming has gone downhill as well. Both companies are losing money, have huge expenses, and duplicate much of their content. My hope, as many others are, is that the unified company will be able to focus on better programming and become profitable. I'm getting close to the point that I will not renew my subscription unless things improve at Sirius, and I will not consider going back to XM.
The argument that they now have a monopoly on the market is not the same as other industries. I'm already making up cd's or using my ipod with tons of podcasts, music, and ebooks for traveling and if the programming for satellite radio doesn't improve, or the cost increases, they aren't getting a renewal from me and we as consumers have many alternatives.
Your grasp of logic is... weak. If people don't like it enough, someone else will come in and fill the need and sell me forks. If people don't like Sirius/XM merger, they won't pay or someone will come in and offer a similar, better service cheaper. You're using some kind of retarded false constraint "argument" or some shit, but it sure is stupid.
On Sirius, the audio quality of their music-only channels is clearly better than analog FM terrestrial, but the audio quality of their speech channels is absolute crap.
By my figures, excellent-quality human speech takes about 1/8 the bandwidth required for moderately-crappy-quality music (1/2 the number of channels, 1/2 the sampling rate, and double the compression on what remains), and my ear tells me that Sirius probably gives each talk channel less than half of that. If I'm correct, then Sirius could, at will, change all 47 of their regular talk channels (excluding the 18 "traffic & weather" and occasional-use "sports play-by-play" channels) to excellent quality by deleting less than 1/10 of their 68 music-only channels. If I'm incorrect, then all the regular talk channels could still at least change to good, perfectly-acceptable quality at the expense of 1/10 of their music channels.
Since I only use the service to get through weekend nights, when my two local (and generally excellent) public stations are less than enthralling, it's sad that I end up finding podcasts instead just because the audio quality is better.
There's one little catch: Sirius and XM are technically very different. Their signals and encodings are different. An XM receiver has to be able to read a signal from a satellite way down south in geosynchronous orbit, while Sirius uses multiple satellites in funky orbits such that there's always one fairly high in the sky. An XM receiver only listens to half of the total bandwidth at once, but a Sirius receiver listens to everything it can.
I'd love to see the redundancy go away, but I think the two systems are too different for that to happen unless either (1) one of them is shut down and the other expands to use the freed spectrum or (2) current receivers are replaced with intrinsically more expensive dual-system receivers--without the downward price pressure of the competition that existed before the merger.
Does anyone know if the first scenario could work with existing receivers? I remember something about a deadline by which Sirius and XM were to have been required to only sell receivers that were compatible with both systems, in order to remove that barrier to competition (because back before Bush the U.S. had these things called "anti-trust laws"). This, and the fact that the two systems are in adjacent chunks of spectrum, would seem to imply that either system could just expand to use the spectrum of the other, and that at least the receivers of one system would still work.
It stands for "Hybrid Digital," according to officials at the HD Radio Alliance.
The Wikipedia article provides a nice overview of why it's really not worth it compared to traditional radio. *Worse* audio quality on FM, lower coverage, and let's not forget to mention the obsoleting of about 100 years' worth of perfectly good radio equipment, for the sake of selling a whole bunch of high-margin "cutting-edge" technology.
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I currently have both Sirius and XM. I think people who are a fan of either are going to suffer. When they merge there will be many similar stations so I see a lot of stations getting the ax. XM has 3 or 4 alternative stations, Sirius has a couple. The main reason I have both is they are all different and I jump around the two of them. They also both have a station called "Chill". At a first listen someone might think they're the same, but to someone who very much likes the one Chill, they are very different. I love the XM Chill; Sirius Chill on the other hand just seems to completely miss the point.
The only real benefit from my perspective is that they will hopefully program the satellites so that you receive from both of them for better reception. As it is now they cut out at very different times while driving. Overall I would say XM has much better reception. A big tree could cause my Sirius reception to cut out while my XM would be unaffected by the same tree. It usually takes a mountain to the south to cause my XM to cut out.