Sirius Satellite Radio Inc. (NASDAQ:SIRI) took a positive step toward getting regulators to get on board with its acquisition of rival XM Satellite Radio (NASDAQ:XMSR).
If the merger happens -- I know it's a big if -- satellite radio will become more like cable television. People who want fewer channels will pay less than the $12.95 per month that they do now, the same if they want their current level of programming and more if they want more.
Sirius CEO Mel Karmazin is pledging not to raise prices. The arguments from Sen. Herb Kohl and other critics that the merger isn't good for consumers just don't make sense.
It's in the company's best interest to give the public great programming at a reasonable price. Satellite radio is far from a monopoly. People who are upset with Sirius or XM can plug in their iPods into their cars or listen to free radio.
I realize the National Association of Broadcasters is lobbying hard against the deal. NAB got into some hot water after our sister blog Engadget noticed that its anti-Sirius was looked very similar to Mastercard's well-known campaign.
Priceless.
Still, I am optimistic that a compromise will be worked out.
Sirius and XM will have to accept some sort of government regulation and satellite radio will survive.
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Reader Comments (Page 1 of 1)
3-22-2007 @ 10:35AM
EMIL J KOVACH JR said...
I Understand Your arguement, But, Do you realize Everything You Claim A Merger will Bring.
Can Be Provided, Now.
Lower Prices By blocking Channels You Do Not want, As An Example, Can Lower Price.
My Arguement Is, Total Control Of National Content By One, Is No incentive To Find THE BEST CONTENT,
To Get One Up, On The competition. Lets Face It--SIRIUS Is The House Howard Built.
IF--IF Howard Would Have Been Signed By XM--
Sirius Would Now Be Bankrupt, And XM Would Have 3-5 Million More Subscribers. Or More.
A New And Different SIRIUS Would Be In The Market place.
The Only Way To seek Out and Invite The Best Content, Is To Have TWO Providers, Eager For It.
I Don't see That Fight For the Best There, With Just One Provider.
Lowering Of Price, To Not Pay For Programming You Choose Not to Listen To, Is Not Necessary, For A Merger, To Bring About.
My Guess, That Option Will Benefit the FIRST Provider Who Offers It. And Increase Subscriptons.
EMIL J KOVACH JR
3-22-2007 @ 1:03PM
Jack Hoxie said...
It would seem to be that the major losers in this deal would be the content providers that would no longer have 2 subscriber-hungry companies competing for their content. Presumably this would allow the merged entity to reduce costs and maybe even become profitable. The music listener in me agrees with Sirius's definition of a broader market, the consumer in me is concerned with the cablesque ramifications of the merger (similar market definition issues and THAT didn't turn out well), the cynic in me wonders in whose pocket the critics are and whose interests they are defending.
I think the monopoly debate is a red herring and political theater. I think Siruis/Xm's real underlying merger struggle is from radio competitors and content provider interests. These are powerful groups that can easily trump protestations of business viability. I still beleive merger is only a 50/50 proposition at best.
3-26-2007 @ 10:34PM
Mike Powell said...
Listening to XM and then to Sirius is like Night and Day. Xm is not a very good Music service.
At least with Sirius you have a little variation.
Try channel 15 thru 19. good stuff.
XM just is rather very Bland. I have both. Sirius First.
Bought a car with XM installed. it just Isn't good.
6 months free service. looking forward to the 6th month.