XM / Sirius merger
So, Sirius and XM are merging as one entity. As an XM listener, this is interesting news. My brother owns both a Sirius and XM subscription, and dislikes the Sirius sound quality, but he thinks the services are on-par with each other. I like XM, and can listen to Sirius online, but the (audio) quality is poor.
Also, now Howard Stern can try and pass another "edict" to have Opie and Anthony not talk about him on the air. Especially about his "I was going back to terrestrial radio before O&A did"- quickly ended when Mel Karmazin, the CEO of Sirius, told him to shut the hell up. Not to mention his claim of 6 million listeners in one year, which was false and came close to an SEC investigation.
But aside from shock-jock silliness, it'll be good to get everything sports-wise available to subscribers, if that is the path they choose with XM-Sirius. NFL is on Sirius and takes current stations off the air to broadcast games, while XM has specific stations for sports. Interesting to see the way they go. As long as they rename some of the stations. I mean, I still don't know what the hell "Squizz" is.
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I'm a Sirius subscriber and am quite happy with it, although I have never listened to XM. I'm excited about the idea of them merging the best qualities of both.
I'm willing to bet there will be a price hike.
Edit: You know what I want out of this? A standalone application to listen online while I'm at the office. I hate keeping a browser open and having to login every time, and I remember seeing an unofficial windows media player plugin that showed you all the currently playing songs on each channel. That was cool, but didn't always work very well.
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One price hike and I'm gone. I had a hard time renewing my subscription this year; if I hadn't gone to all the trouble to install the receiver I may have canceled. Don't get me wrong, I like it, but I don't $12 per month like it. I think it'll take many years for the details of this to shake out; I doubt the devices are inter-operable (though I could be wrong) and I seriously doubt they can simply double the offering. Maybe they'll go the "dual competing brands under the same corporate entity" route a la Energizer and Duracell.
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I am thrilled with this, if it manages to go through.
There was so much overlap between the two that it became a war of exclusives (hmm, this sounds familiar).
As a sports fan, I was locked into Sirius for the NFL, but with the NHL going to XM, I was heartbroken. Now I can be happy again!
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baggachipz - My wife works for a small company that produces audio devices for Lexus and Toyota vehicles that integrate XM, Sirius, and iPod controls into the navigation touch screen panel. I can assure you that current XM and Sirius devices are very much incompatible, such that each interface unit has to be specially designed to work with a particular receiver.
I think the merger is a terrible idea but I'm only a consumer of the sirius channels that come free with my Dish Network so they probably don't care what I think.
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If the FCC/FTC allows it, it pretty much gaurantees a price hike, there won't be a competitor to flee to.
There will be much arm twisting by the feds though, these are the only two players in the field, the guv'ment won't like them consolidating.
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Right but if they now have control over both Sirius and XM satellites, this should not be an issue.
EDIT: Hmm, I may have misunderstood your point so my comment does not apply hehe
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This merger will not happen. The FCC's original rules creating satellite radio explicitly forbid this.
I believe they will let one or both companies fail first, and even then will prevent the remaining company from buying the assets of its former competitor.
Excellent! I hear lack of competition is always best for the consumer.
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True, but like the article says, they are going to argue that they're not just competing with each other, they're competing with iPods (which are increasingly being hooked up to car stereo systems), as well as terrestrial radio. And they may have a point there. There's no question that an army of lawyers have put a lot of time into this, it's not so simple as "the original rules forbid this, so it won't happen".
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Microsoft tells us so!
Fedaykin98 wrote:
wordsmythe wrote:
I'm excited about the possibility of having the sports from both services available on one service along with NPR. Besides that, who really cares? Throw 3-5 adult rock stations into it, some classical, some kid's channels, and I'm fine with it. Being stuck out here in the wasteland of radio broadcasts, it would take a lot to make it not worth my money. I hate that some car manufacturers offer XM over Sirius or vise versa. XM? I don't want that -- no NPR and no NFL. (For the record I think the NFL sucks for only making the NFL package available on the satellite service). Don't make me pay for that radio system when I'm going to have to self-install Sirius as soon as I get home (Honda).
I think the competition from all of the other media outlets makes a compelling argument. Of course if this goes through I'm almost positive that we'll start seeing pricing schemes similar to cable. Sirius Basic, Sirius Extended, Sirius Sports, Sirius Comedy, Sirius Adult, etc. etc.
They're always going to have the problem that a good walkaround player is still pretty expensive compared to a regular radio and you have to pay for content instead of getting it for free. Or at least that's my impression as the average consumer, and if that's a wrong impression they need to change that somehow without me getting off my lazy ass and reading up on it.
It's something I should do, because I can listen to the radio all day while I work. But I just never get around to signing up.
If the FCC tries to say no the merged company can just drop one of their licenses and then the opportunity will be there for another company to pick it up and be the new competition.
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Sirius shares bounced up about $.25 today.
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Clarify this - do you mean you're mad that they're exclusive to one specific satellite radio service? Or does this mean something else?
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No different than people laughing as they said, "why in the world would we pay for television programming? We've got it for free right here!"
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Karmajay, if they do drop one of their licenses, that means that one company's customers will be instantly stranded. That's probably not going to be an acceptable outcome.
I think they're a game of brinksmanship with the FCC, which has already explicitly said that they cannot merge. They were mooting this idea around a year or two ago, and the FCC chief issued a statement, which was 'no way', but in a lot more words.
And to think... I just canceled my Sirius subscription this morning.
There are some decent stations on Sirius, but their reception sucks. Takes forever to pick up a signal, and in the car, it's extremely hard to find a frequency around here, so it's constantly getting interrupted with station static. I'd keep the subscription up if I could listen to it here at work (through the net, which Sirius offers), but to connect to my hospital I have to go through a VPN... so goodbye 3-4 radio internet accounts.
Funken, I don't know about other people, but the main reason we originally got it was because we were taking a lot of trips between SC and VA, and we got tired of trying to find good stations on that 10 hour drive. With Sirius, we just tuned it in to one station we liked, and that was that. Little to no commercials, and it was easier finding what we wanted to listen to.
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I live in Northern VA have an XM radio account and hold Sirius stock. A friend of mine has Sirius radio.
As a consumer I can not be more delighted. Both XM and Sirius come in clear and my only issues have been in some very heavily forested areas. Both play about the same music with the difference being some exclusive channel offering like MLB and NFL.
As far as competition they have a good argument about competing against normal radio. While they do offer a wider selection of content if prices went too high people would just listen to normal radio. Toss in people carrying arround iPods and the like and I do not think it is as clear as this will never happen.
As a stock holder I am happy too. These two companies duplicate each other a lot with just small differences. Cost can be cut by a lot, advertising revenue can go up as they now have 13mil total subscribers, they might actually start making money as oppose to what is going on now.
Currently the plan is to broadcast the same services on each signal. So Sirius radio people and XM radio people have seperate but equal broadcast sort of thing while they change the new brand of radios to receive both signals.
Will this really happen who knows but it is not a bad idea at all for all concerned.
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Whoa there. I'm not laughing at the idea. I'm just in a position where I don't see the payoff from signing up for the service.
When cable came in you wanted it because you got away from the roof-mounted antenna and rabbit ears on top of the TV and vastly increased the type of content available. (even today, cable clearly offers far more and varied content than you can get on broadcast). And we Americans were watching hours and hours of TV. So you signed up for cable like you signed up for phone or utility service.
You don't have that kind of competitive advantage with satellite radio. There's a smaller market of people who listen to a lot of radio or need the satellite utility in a hilly area, and a content advantage that's far smaller over broadcast than you have in TV. I'd be willing to sign up if they gave me a good reason, but if I'm listening to it for a half hour or so back and forth to work, it's not something I really have to have.
My first post on GWJ in a long time, but this is an area I cover for work so I figured I'd throw in my 2 cents.
The FCC does have the power to change the rules or permit an exception, particularly if it concludes that satellite radio is just part of a larger constellation of providers, including traditional broadcast radio and the Internet. But if regulators decide satellite radio doesn't compete with other media, the deal is indeed likely to be rejected.
If you're looking for a precedent for rejection, look at 2002, when the FCC rejected the proposed merger between EchoStar Communications (DISH) and DirecTV Group (DTV) on the grounds that it would have created a monopoly in rural areas.
This really isn't a merger either, its more accurately a takeover of XM by Sirius.
This deal will not happen.
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They are letting all the Baby Bells merge back so who knows for sure if this will happen or not.
I think this is an important point. Quite a few anti-competitive mergers have recently occured, and although this deal should be blocked, it's possible that it could fly based on past decisions made by the anti-trust division of the FCC to allow anti-competitive behavior, like AT&T's Borg-like behavior.
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The Baby Bells aren't even in the same ballpark when it comes to anti-competitive mergers. We are talking about the consolidation of the only two satradio providers in the US. Despite the recent mergers in 2006 and 2007 there are still a handful of BBs left. One satradio provider, however, is going to be an extremely difficult sell.
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As far as anti-competitiveness goes, I agree that the merger is more monopolistic. But in terms of scope and size, the combined sat-radio companies don't compare to the Bells. AT&T's value is at hundreds of billions, compared to the combined XM/Sirius at barely over $10 billion. Based on that idea prognosis, I'd say it's up in the air.
At first I didn't think it'd go through, but there's been a few other recent mergers of comparable size and anti-competitive nature that make me feel like it will happen.
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Remember though that the value of the deal has no relevance to the fed in terms of clearing anti-trust hurdles. The FCC will consider this issue based solely on its impact to the consumer and the industry. For this aspect of the merger value simply doesn't enter into the equation in a meaningful way.
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If it was a more mature, profitable industry I'd see it as a no brainer. But given the small suscriber base, the lack of significant public interest in whether satellite radio exists, the alternative methods of content delivery, and an administration which doesn't believe monopolies are much worth worrying about overall, seems like there's at least a significant chance it goes through here.
What it points out is the current administration is merger friendly and may allow this deal.
2 companies losing money compared to 1 with a possibility to cut cost and offer more programming and at least same price if not lower is a possibility of this merger.
As it is now the companies are the same in pricing, they offer same basic music, and have a few channels that are different NFL vs MLB and O&A vs Howard Stern for example.
We don't know what the company is willing to offer up to let this happen. What if they agree to certain price controls ala cable TV today for example.
Also I think radio lobby response is a clear example that these 2 are in fact in competition and it is a bigger picture to consider this merger in instead of just the sat radio industry.
Both companies have I am sure a legal advice teams that thinks this is not an impossible merger.
It is not a cut and dry case as you would state and you can find articles all over from legal experts supporting the merger and against the merger.