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."'"

Comments

I support this

[bobetov]

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.

Long overdue

[DaveInAustin]

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).

Maybe Sirius' audio offerings wont suck now...

[PortHaven]

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.

This is a good thing for consumers

[Gizzmonic]

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.

compatibility?

[greenrom]

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.

I don't beleive that's accurate

[hassanchop]

The agreement that opened up the satellite spectrum for XM and Sirius specified unambiguously that no merger would be tolerated.

That is not accurate.

http://en.wikipedia.org/wiki/XM/Sirius_merger

The proposed merger faces scrutiny by the Federal Communications Commission, Securities and Exchange Commission, Department of Justice and possibly other federal organizations. The FCC also poses a major hurdle: when the satellite radio service was first created by the FCC, one of the licensing conditions was that one company could never own both satellite radio licenses.

They are restricted from having both licenses. The agreement does not, as you claim, say that "no merger would be tolerated."

Neither company has

[Paralizer]

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.