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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."'"
Yeah, you'll have one company offering satellite radio. And thousands of companies offering AM/FM radio, internet streaming radio...
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.
The reason that this took so long to approve is that it is illegal on its face. The agreement that opened up the satellite spectrum for XM and Sirius specified unambiguously that no merger would be tolerated.
I agree that a year is a long time for the Bush so-called administration to make a ruling that contradicts a law. Usually that's done before morning tea.
I love Mondays. On a Monday, anything is possible.
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.
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.
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.
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.
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.
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.