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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."'"
"We just simply found that the evidence didn't indicate that it would harm consumers."
...since Satellite radio has so few consumers...
WolrdSpace is still left and they are international
If people can get past, can they get future? Best way to confuse a stoner
Yeah, you'll have one company offering satellite radio. And thousands of companies offering AM/FM radio, internet streaming radio...
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?
They have to compete with every free radio station in the country, internet radio and other forms of music/entertainment content.
Comparing this with TV is the short-bus way of looking at it. TV you can only get from Cable (usually only one player in town), Satellite, or OTA (which isn't eveywhere either). I don't know of many places that you can't get at least 10 radio statios + internet.
It's a "new" format and it has to compete with other audio broadcast formats out there. Look at the bigger picture.
It won't become worthless. It'll likely become more valuable. If the merger completes then in the short term you'll likely see content being shared between the two services. Right now the various sports franchises have pitted the two satellite providers against each other for lucrative exclusive deals. You can hear NFL on Sirius only, MLB on XM only, etc. When the merger completes you'll likely be able to hear baseball on Sirius and football on XM. Other exclusive content, like Oprah on XM, Howard Stern on Sirius, etc. will also likely be made on the other service. So the bottom line is that you'll probably have more content available to you.
Eventually you'll probably see receivers that can receive both services, but that will depend a lot on how the companies decide to merge their two technologies. That likely won't happen for years though, and during all that time they have to keep supporting their existing customers.
The competition isnt between "satellite radio companies". The competition is between "what people listen to in their car".
Your choices are:
1. Pay service like XM / Sirius
2. "Free" radio (and all the commercials that come with it)
3. iPods / MP3s / podCasts
They are all in direct competition for people's ears as they commute.
You're missing a lot.
XM/Sirius is a pay service. They offer music, news, talk shows, etc.
AM/FM radio is free. They offer music, news, talk shows, etc.
iPods can be used to listen to music, news (podcasts, etc), talk shows, etc. (also for free)
New emerging technologies like wimax may offer alternative ways of streaming music, news, talk shows, etc.
This is basically what the DoJ ultimately decided. There are enough alternatives for content delivery that a merger of these two wouldn't create a monopoly in the economic sense. True they may be the only company offering services by satellite but they certainly couldn't jack up the prices without customers leaving for perfectly viable alternatives like terrestrial radio, iPods, etc.
It's closer to DirecTV and Dish merging. Neither has a whole lot of subscribers, and their real competition is cable and free TV, along with the internet, etc...
Satellite radio's real competition is terrestrial radio (analog and HD) along with MP3 players. That's who they have to compete with, if people don't want to pay for their service they don't have to, there are other places to go.
My Other Computer Is A Data General Nova III.
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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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
Having said that, even though I make trips like this at least twice a year, I still don't have satellite radio, because I don't see the need. Even with my cheap factory installed car stereo with no auxiliary jacks, I can burn a few CDs from my MP3 collection to fill the hours when there are no decent radio stations. Maybe if I did that sort of traveling on a monthly basis or something. Regardless, I have a hard time seeing the appeal of paying a monthly fee for radio unless I'm a traveling salesman or something. Radio is not like TV, it's not something that people will generally listen to in their spare time. It's usually something people listen to when there are no other entertainment options, such as when they're driving.
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.
Satelite TV doesn't meet the needs of every TV viewer; it's still considered to be in competition with cable, even though some viewers (those in some apartments; or located such that they can't get a good view of the sky in the right direction) can't use it.
The government's role in approving mergers is not designed to ensure that you personally will have multiple choices of product to meet your individual needs; it's to promote competition in the market as a whole. Internet streaming radio is a valid factor in the market.
Regardless, there are options other than sat radio for use in your car. Such as AM, FM and high-def; and arguably tape, CD, and iPod. When someone looks at a presented list of options, picks the one that doesn't apply to him or her and complains about that one... that just sounds like someone wanting to complain.
...and has no coverage in the US and Canada, which is where Sirius and XM operate.
I don't know of many places that you can't get at least 10 radio statios + internet.
Try almost anyplace between the Mississippi river and California.
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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."
XM is not the biggest competitor for Sirius (nor vice versa). CD/MP3 players and AM/FM broadcasts are - and HD radio is marketing aggressively to try to maintain that market segment. The driver for lowering satellite radio prices and improving content is persuading people that it's worthwhile to adopt satellite radio and pay the subscription fees. A market war between two satellite providers would only drive prices up and deteriorate service quality.
He's getting rather old, but he's a good mouse.
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)
I agree with all the replies that state the same thing the summary said- there's so much competition to using satellite radio at all that you don't need competition within satellite radio. But I also wanted to point out your example's pretty bad- how many markets are there where Time Warner and Comcast actually compete? I'm not aware of any. They're two companies that mostly own a whole bunch of geographically distinct local cable monopolies. They'd actually be an example of two companies where there isn't much economic basis for restricting a merger between them, because they aren't in competition with each other. Or at least they aren't competing for customers in many markets. They do compete to acquire other cable companies and such.
Examples of their competition are satellite TV, broadcast TV, and to a lesser extent Netflix, Blockbuster, Youtube, Tivo, iTunes, Bittorrent, movie theaters, etc. Because they aren't geographically constrained, Sirius and XM are actually in much greater competition than your example of Time Warner/Comcast, who barely compete at all.
Can anyone tell me how to set my sig on Slashdot?
From XM's web site: "The pending merger is still subject to approval of the Federal Communications Commission."
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.
The issue has little to do with what competition remains within satellite radio, but whether there remains competition. Satellite radio competes with broadcast radio and a number of other formats, so the merger does not remove competition, but makes the combined company more efficient and less likely to lose money.
Both XM and Sirius are bleeding money right now and that can't last forever. If the the industry allowed them both to go under that would counterproductive to helping competition.
Tesla was a genius. Edison however was a overrated hack who liked to torture puppies.
It's all got to do with percentage market share. If you look at broadcast and satellite market as a whole, if both XM and Sirius had say 40% or ever 20% of that market each, then no they wouldn't be permitted to merge. Letting XM and Sirius merge at this point does not reduce choice as the percentage market share is too tiny.
Tesla was a genius. Edison however was a overrated hack who liked to torture puppies.
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.
Many have. Check out the major owners, who now own multiple stations within a market - Bonneville, Clear Channel, etc. The only time it would be halted is if one corporation was moving to a monopoly position.
The "airwaves" are supposed to be public/free, and are licensed by the FCC. Satellite is not under FCC's jurisdiction as it goes beyond the public spectrum. It was purely a lobbyist's game that held this up for so long.
Interesting how Murdoch can take over the WSJ with all the holdings in news media (print/airwaves) with nary a hitch in the proceedings, but something outside the gov't (and lobbyists') regulatory control takes more than a year.
Who put this thing together? Me, that's who.
I have XM and while it's not for everyone, I love it. I have a daily 50 mile (round) trip to work M-F. It's about an hour a day on the road. If you hate commercials as much as I do then it's totally worth it. I could listen to CDs but I get tired quickly of the same songs over and over. On top of that, I stream XM through my 360 to the main stereo at home...great for parties, like when we had the fam over this Easter weekend.
You mean Clear Channel doesn't own them all already?
But, increasingly, the traditional radio stations are all owned by Clear Channel and the satellite stations are the only ones offering content like that. If you're looking for continuous, commercial free, specialized radio channels with national coverage
If the choice is down to the Clear-Channel payola and commercial dominated crap, or the now merged Sirius/XM broadcast on satellite, that hardly represents consumer choice. This is like a choice between the "old radio model" and the "new subscription model", with the option of playing your own CDs and MP3s thrown in.
Then again, I've long stopped expecting US regulators to actually do anything which preserves choice for consumers -- they just do what the corporations want.
And how will creating a new monopoly in the market not eventually drive up prices and deteriorate service quality -- I simply don't believe it's evey played out differntly. They're not in competition with the traditional radio stations, so among people looking for an alternative, there would now be exactly one game in town. Once there is one game in town (*cough* Comcast *cough*) they can abuse you all they like.
Satellite was the only alternative to the traditional model. I must say, I just don't get how this is ultimately better for consumers.
Cheers
Lost at C:>. Found at C.
My only complaint is that both satellite services went for quantity in the quantity vs. quality tradeoff and as a result their audio is better than FM but not CD quality. I'm hoping that if the merger goes through and digital FM takes off, they will merge the duplicate satellite channels into CD quality channels.
Without the 2nd Amendment, the others are just suggestions.
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."
Why stop at just broadcast and satellite radio? Why not talk about the "background entertainment and current events" market as a whole, of which XM and Sirius are an even smaller part competing against CDs, iTMS, Google News, etc.? On the other hand, why shouldn't their combined grasp of the satellite radio market be relevant? The whole concept of antitrust is far too subjective; it all depends on how narrowly one defines the market. By some definitions everyone has a monopoly; by others no one does.
Even if one could come up with some ethical justification for interfering in this merger -- which I have yet to see -- the law can hardly be considered objective, or even consistently applied.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
I (and millions of others just like me) listen to satellite radio all the time (I listen to it all day in my office -- listening to it right now via an XM Radio gadget in Vista). I take a 4.5 hour trip to Omaha, NE at *least* once a month, and other shorter (but still hour plus trips) between those. Hell, I even listen to the Sirius stations while I'm at home through my DishNetwork service (MAN I wish they had XM instead of DirecTV -- the Sirius programming *sucks* compared to XM in my opinion) hooked up to my HT setup.
I *hate* commercial radio. I *loath* listening to commercials for seemingly half of an hour. I hate it so much that I barely watch TV live (I record virtually everything). XM has been *awesome* for me. I am not alone.
Just because *YOU* don't subscribe to it, and thusly think it's unneeded, does not make it so. It *is* a needed service. I absolutely *refuse* to listen to normal radio after having had my XM service for several years now.
As it is right now, if the merged company decides to adopt the Sirius broadcast hardware, I'll be very upset. It does not sound as nice as XM's does (Sirius just doesn't provide as much bandwidth to their music channels as XM does and this is *especially* noticeable on their internet stream). Ah, the vast population of US truckers. I forget how large of a group they are. Are you kidding me, of course there is going to be a niche demographic that has to benefit from something like this, but at large this is an unneeded service. My previous statement however I agree is with too broad of a brush and I retract it.
bork bork bork!
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.
"...I still don't have satellite radio, because I don't see the need."
And that's exactly why XM and Sirius have to merge. The market isn't currently there to support both companies. I AM an XM subscriber (and shareholder) and I'd rather see them merge than go away.
So, go start one and make money off it.... if you can. How big is the market for bluegrass or metal in your area? Small market means small earnings through advertising.
Here in Tampa, we have WMNF 88.5, which plays all kinds of crap. But, they don't make any money and follow the public radio model. Begging drives to get money to pay for the programs. Oh, and did I mention they alienate half their potential audience by being somewhere left of Air America?
Your real complaint is that most of the people in your area don't have your tastes in music and so music you like doesn't get played on the radio because it wouldn't earn any money.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Apparently, you don't have satellite radio if you think the sound quality is higher.
Access to the same channels from anywhere is only useful if you travel a great deal, which most of the population does not.
You mention "others may not find terrestrial radio to be even a suitable substitute". How many of them are there? How much of the population do they make up? Having been a trucker, I know they are a strong market for this kind of service, as are people who live in extremely rural locations. But, for most other people who travel for a living, satellite radio does not have much of a draw because one can rent a car with it, and one generally can't use it inside many, if not most, locations. So, please, enlighten me as to the size and make up of this group of "others".
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.
Quite simply - I don't subscribe to your socialist leanings. You would have the government regulate something at the drop of a hat ("but I have to change channels, or I can't listen to the song I want") for "consumer choice". I would say leave it alone until it becomes an unreasonable burden on people, and by 'unreasonable' I don't mean "whaaa, I don't get a consistent listening experience across country".
You are one of the new breed of closet socialists who think "consumer choice" is more important automatically no matter how trivial the issue than anything else. You remind me of the poeple who think societal rights are more important than individual rights. They're not. If there's one good thing about Republicans, it's that they don't buy the bullshit you're selling.
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.
I have satellite radio. I lose signal, not static but complete signal loss, in heavy tree coverage, in parking garages, in areas with tall buildings, going up and down curving mountain roads, etc. And, the sound quality can be iffy, especially if it is a talk program, such as the news.
The reason that it matters is simple. Even if one does not like any or all of the choices, one still has a choice. Therefore, there is no monopoly. Your hypothetical group has a choice. Their preference for satellite over terrestrial radio does not constitute a monopoly if there is only one satellite radio provider especially when satellite radio is vastly smaller than terrestrial radio.
Like it or not, satellite radio is a niche market and even if there is only one company serving that niche market, that company does not have a monopoly because of the existence of the greater market to which the niche belongs.
There is no "-1 offended" or "-1 you don't agree with me" mod options for a reason.