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The XM and Sirius agreement should have been done a long time ago and is the only thing that will give satellite radio any real chance at long-term survival. Subscription products in a free environment are always niche, and cross-platform incompatibility prevents complete market penetration. Eliminating system incompatibilities will enable people to buy a satellite radio without any worries that they are buying a dead horse. Format wars are alway dumb, as nobody really ever wins.

ABC News has confirmed reports that two satellite radio providers XM and Sirius will announce a long-anticipated merger today.

The two companies worked over the weekend to finalize a plan that is expected to be structured as a “merger of equals,” although ABC News has learned the plan calls for Sirius CEO Mel Karamzen to run the new company.

As I said above, this is the only thing that will give subscription (ad-supported may come and dominate for all we know)  satellite radio any opportunity to succeed.



  1. SN says:

    20. “You have to wonder how this makes economic sense.”

    It doesn’t. Taking two unprofitable companies and combining them will only lead to one unprofitable company. They’ll talk about consolidating resources and combining synergies. But in the end it’ll be over soon enough.

  2. Mister Mustard says:

    Isn’t Satellite radio ultimate doomed? To be killed off by fast digital cellular service? ”

    Haw! Once cellular service manages to solve their seemingly insurmountable problem of not being able to provide TELEPHONE service on a reliable basis, they might be a threat to satellite radio. I don’t see that happening any time soon, base on historical performance. Once I can go a few days in any major metropolitan area (Boston, Philadelphia, Minneapolis, Chicago) without being plagued with No Bars of Power, dropped calls, calls so crackly and broken up that you can’t hear your own conversation (wasn’t digital service supposed to have solved this one 10 years ago??), and all the other flaws of current cell phone telephony, I would consider going to a cellular radio format. Assuming that the fee schedule was based on something other than the current charge-per-minute model. I wouldn’t hold off on getting a satellite radio waiting for that to happen. If they haven’t done it yet, it’s unlikely that it’s going to happen. More likely that Micro$oft will come out with a new version of Windows where everything works.

  3. Olo Baggins of Bywater says:

    21, I think it can make sense, and I bet it will. The cost savings will be huge (huge!) while revenues remain the same. Then, rather than the expensive (and pointless) competition with each other, the combined company will finally get to compete directly against FM radio. And we all know that FM is a sitting duck. An anachronism. FM simply cannot compete, and a couple years from now this conversation will seem silly. :-)

    The transition will be ugly, but if they can do that, the rest is downhill.

  4. James Hill says:

    What’s the path to the predictions for the year entry? I could swear I had this on my list (not that it wasn’t hard to call).

  5. Vince says:

    I’ve been a Sirius subscriber since 2004, and as long as the service remains, I’m happy. The only content from XM I care about is “Cinemagic” and the ability to listen to ACC content.

    And those folks calling it a monopoly–get serious. Satellite’s radio competition is free radio. Just as Satellite television’s competition is cable and “free” tv. And I don’t see how the “cellular revolution” is going to help me listen to radio in my car. I’m not even supposed to talk on my cell phone in the car–how am I supposed to listen to cellular radio now?

    And they won’t combine all the channels–they have tons of overlap of stations (XM’s Bone Yard = Sirius’ Hair Nation, etc.). They’ll merge the content and probably end up with about 200 channels.

    There’s a lot of knee jerk reaction here–everyone just settle down and we’ll see how things shake out.

  6. catbeller says:

    Satellite radio is a mistake.
    It was sold as a commercial-free subscription service, just as cable TV was when it was introduced. Look, ma, no commercials, if you just pay for your content.
    then commercials arrived, and it looked exactly like OTA TV, only now you have to toss a car payment at them every month for the priviledge of watching commercials. And now, we are getting to pay for INFOmericials on cable TV as well. Paying to see commercials.
    Now the two competitors are merging. And will now commence airing commercials. And will continually raise rates.
    All this comes at the expense of our local radio stations, which have knitted the nation together, one way or another, for most of a century. Only a couple of corporations really control that market now. The programming has become idiotic and pre-digested. The censors are hammering hard. And now we get satellite radio, newly converted into a monopoly. Adam Smith warned us about this…

  7. Roc Rizzo says:

    So much for the Anti-Trust Laws in this country.
    Yet another thing that Bushco, Inc. is abolishing.

    Pretty soon, the US is going to look like it did in the 1880s!

  8. MikeN says:

    Well doesn’t this give the combined company a monopoly on satellite radio?

  9. SN says:

    28. “Well doesn’t this give the combined company a monopoly on satellite radio?”

    Yeah, but there is competition. If the combined XM/Sirius started raising its rates too high people would stop paying and would listen to regular radio or to their MP3 players, or to their CD players, or to podcasts, etc. Thus, market forces would still work to keep prices low.

    And lastly, there is nothing keeping some other company from entering the market, other than start-up costs, which would affect any start-up.

  10. SN says:

    5. “#2, #4 it makes you wonder why cable television has thrived. doesn’t it?”

    Cable TV was a solution to a problem people did in fact have. At one time there were wide areas in the US that could not receive over-the-air broadcasts. So cable companies filled that niche.

    And even among people who could receive broadcast TV, they had to use antennas to receive the channels. Basically, you had to get up and turn the knob which turned your antenna to the right direction. With cable, you’d get all the channels without any of the fuss.

    And cable companies didn’t stop there, they added 24/7 movie channels and other niche channels which you simply could not get on broadcast. Thus it’s not surprising at all the cable TV and satellite TV won out over broadcast TV.

    But radio and TV are two different things. People will sit and watch TV for hours, but will tend to listen to the radio only when they’re doing something else. E.g., working around the house or driving.

    And as I stated, there are plenty of other distractions out there that compete with satellite radio that are less expensive.

    I’ll put it this way, if satellite radio was a genuine solution to a problem people actually had, i.e., provided something for people to listen to when they’re doing a task at a price people were willing to pay, it would be profitable.

  11. Smartalix says:

    30,

    Well said.

  12. James Hill says:

    #30 gets +5 smarty points.

  13. ECA says:

    30,
    remove the First paragrph and you are almost right…

    they took current/old tech, and STILL do..
    they made it so you didnt need an antanna, they increased channel selection…But, they went into areas that HAD Broadcast TV, and into Cities ONLY…and this is STILL the format they use.
    They dont, and will NOT run a COAX out into the middle of nowhere.
    They gave a Better signal, most time, Less hassle in tuning, and more selection.

  14. SN says:

    33. “They dont, and will NOT run a COAX out into the middle of nowhere.”

    I’m sorry but you’re completely ignorant about the origin of the cable TV industry. It started solely to provide TV to areas that could not obtain an over-the-air signal. That’s a simple fact. I’m talking about an industry that started way back in the 40s. Probably way before your time. (It was certainly before my time!)

    “they made it so you didnt need an antanna”

    I seem to remember saying that.

    “But, they went into areas that HAD Broadcast TV”

    I seem to remember saying that.

    “They gave a Better signal, most time, Less hassle in tuning, and more selection.”

    Yep, I said that too.

  15. 700WLW says:

    “In-Stat: Digital Radio Set to Take Off”

    “In 2006, 73 percent of respondents to an In-Stat U.S. consumer survey were aware of HD Radio on some level.”

    http://beradio.com/eyeoniboc/instat-digital-radio-set/

    “Sirius, XM, and HD: Consumer interest reality check” (Alexaholic)

    “While interest in satellite radio is diminishing, interest in HD shows no signs of a pulse.”

    http://www.hear2.com/2007/02/sirius_xm_and_h.html#comments

    This just confirms, the lack of interest for HD Radio, on Google Trends:

    http://www.google.com/trends?q=%22hd+radio%22%2C+xm%2C+sirius&ctab=0&geo=all&date=all

    HD Radio/IBOC is dead.