Sirius Satellite Radio Inc. (NASDAQ:SIRI) acquisition of XM Satellite Radio Inc. (NASDAQ:XMSR) -- sorry it's not a merger -- is all about content.

As I've argued before, the real power of the combined company is in the programming. Theoretically, subscribers could listen to everything from Howard Stern to Oprah Winfrey to Bob Dylan for about $13 a month. Will people pay? You bet.

People buy access to Time Warner Inc.'s (NYSE:TWX) HBO. Both Dow Jones & Co. (NYSE:DJ) and the New York Times Co. (NYSE:NYT) have attracted paid subscribers to their Web sites. National Public Radio survives on the generosity of its listeners.

If the content is good, people don't mind paying for it.

But for the Sirius-XM deal to be successful, the combined companies will need to convince the public that they are getting something unique. Having personalities like Howard Stern and Oprah Winfrey helps, but it isn't going to be enough to retain listeners and attract advertisers.

The companies will need to invest in programs that aren't hosted by huge celebrities. More shows should be done live. They will have to streamline their channels. How many classic rock, heavy metal, country and 70s retro stations does the world really need? Some of the talk and entertainment channels will also need to be axed.

Music will be the biggest strength for the combined companies. Satellite radio offers something for every conceivable taste without annoying commercial interruptions. Terrestrial radio can't compete. If the combined companies can leverage their strength here and improve their programming, there will be little to stop them.

Sirius, XM merger proves content is king originally appeared on BloggingStocks on Tue, 20 Feb 2007 10:05:00 EST. Please see our terms for use of feeds.