XM and Sirius Finally Merging; Will it Matter for Long?

Are they still going ot offer video-to-car later this year?

See: http://www.ministryoftech.com/.....late-2007/

This is more in XM share holders’ favor.

I think this is a good move by XM and Sirius to be competitive long term. Instead of focusing on battling each other and overpaying people like Oprah and Stern, although some may argue that it’s a good deal, I think they should be more focused on the buggy whip technology and how to stay alive. I wrote about the merger earlier today.

This isn’t a monopoly in the Satellite radio market, but a competitive move against the Radio Industry itself. Simply because the source of the material provided is the same doesn’t mean they shouldn’t join. And what other satellite radio company loses in this case if the two companies merge? None, because they are non-existent.

I think the FCC has more to worry about when large mobile telephone companies merge than two companies merge in a market with no competition.

Dont forget those martha stewart fans lol

good post … I also dont really see a future for satellite radio.

Good post Steve - I still remember when both IPO’d and Kramer was hot for XM, then a month later he was all over Sirius. It was fun to watch.

I get the Sirius channels on my DIsh. (some of them) - it’s not bad.

So, this merger won’t matter for long. Once some imaginary device that lets you connect to open WiFi points from your car in the middle of Montana, that is…. oh crap. Not everything is connected to the Internet, Steve Poland. Nor will it be anytime soon. The XM/Sirius merger matters now, and will matter for quite some time.

These “anti-trust agencies”, or the SEC as the rest of us know them, could put the kibosh on the whole deal as there are quite a few subscribers and the perceived lack of competition could look like a potential mess (forcing large subscriber fees, etc.) to an SEC official. Granted, XM and Sirius compete with terrestrial radio more so than each other, but that’s up to the SEC to determine that.

I completely agree with “A Different Steve”. As a long time XM subscriber I can attest to the value of having the service. In my drives across Wyoming, through Utah and into California I would have gone nuts without the wide variety of offerings that satellite radio offers. It just works! There is plenty of exclusive content on XM and Sirius besides Stern and Martha not already mentioned plus the sports packages.

This merger absolutely makes sense. These companies wouldn’t survive otherwise. It’s a unique market and they’ve finally made a sound move.

Great. My hope is that they eliminate redundant channels and allocate more bandwidth to the ones that remain.

My ears are far from “golden” but I’ve never been impressed with the compression on XM compared to good old terrestrial (even with its 15kHz low-pass).

yeah, internetradio in the car. got numbers? the most frequently listened streamer on the most frequently used mp3 format still has about 10.000 concurrent listeners. compare that to a smaller station in a metropolitain area and you´ll get less exited. anyone heard about concurrent listener counts for Last.fm, Pandora or Mercora? in Europe you can test it out with companies like Spodtronic.com and Livetunes.net, but will it scale up without multicasting?

Not everyone lives in a metropolitan area, alphageeks! Wifi will never be a serious option for the majority of people who do not live in areas of a high enough population density to make it economically feasible. Further, Sirius does in fact offer an Internet broadcast for its subscribers.

I really do think that at times TechCrunch and its ilk think the entire world’s population lives within the wifi enabled confines of Silicon Valley. It would be nice to see some commentary on future tech that is not so insular.

WiFi is too flakey for people doing any sort of rural traveling and you know Verizon and / or Sprint would charge an arm and a leg for any similar sort of service. For ~$13/month, I don’t see any real competition for the next 5-8 years.

Also, I hear a lot about “your favorite internet radio stations”. What are they? Who provides them? Everything that I find consists of poor programming and inconsistent service. To be honest, the best streaming I’ve found online happens to be Sirius as well. Don’t underestimate the power of good programming.

I also think sat radio will be around a while but guys - I think he’s referring to broadband cell cards - not wifi! Granted, a good cell signal can also be hard to find/keep in rural areas, but you’ll have a little better luck than finding a wifi AP.

I knew it would only be a matter of time before these two started a merge.

It’s going to be a long time (if ever) before WiFi has the coverage to replace radio.

What you’re essentially taking about is using wifi hotspots as a second cellular network (architecturally, not for telephony). The problem is WiFi has a range of a few hundred feet at best. That’s an awful lot of WiFi hotspots to maintain. Plus the switching issues of cells that small in cars moving at highways speeds…

WiMax maybe, get the cell sizes reasonable. Even still, think of the number of hotspots you’d need to cover just a massively trafficked highway like 95 on the eastern seaboard.

Not so… there’s nothing that comes anywhere close to satellite in terms of geographic footprint and reliability of signal througout that (huge) footprint. I’m talking of a signal being available to just about every square mile of the continental USA with some exceptions caused by high rise buildings or mountains… WiFi or any other terrestrial signal cannot come close, and never will come close to satellite.

I can’t imagine driving coast to coast with a consistent and reliable WiFi signal… not going to happen. You can do that with satellite, today.

this is definitely good news for both parties!

Don’t count your chickens. On December 31, 2007, this merger still won’t be complete due to regulatory problems. Chances of it ever happening are less than 50/50.

I’m not sure XM or Sirius will get much out of this deal besides lower production costs. Unless they divest some of their infrastructure, there will still be two satellite networks to maintain but shutting down some of the satellites may impact some customers; merging the two networks on a technical level may take years and that lowers the rate of return on the merger. The production costs will go down for sure - you reach more people or can cut duplicate services making that part of the business more efficient.

I’m not worried about the FCC or some anti-trust issues. Both companies compete for free, ad based, radio and just because they are the only sat company, now, doesn’t change who they compete with. I’d worry about the classic radio based services and how they are lobbying the government to ban local content from being streamed via satellite. (Source: http://www.orbitcast.com/archi.....-bill.html)

If they merge, you go from a duopoly to a monopoly - will the Department of Justice of the Federal Trade Commission step in? NO!

I think digital radio is the real threat to satellite. Clear Channel has helped to grow the satellite’s subscription based model by saturating their terrestrial stations with advertising.

Look for Clear Channel in the next few years to begin offering subscriber based access to their premium commercial-free digital radio content. Once that occurs, growth in satellite radio will be stalled for good.

Then, WiFi and other cellular based technologies will eat up the rest.

-Stan

This was going to happen eventually. The numbers did not make sense. Next prediction, they will announce a new service which will have paid advertisements and the monthly service fees will go away. Isn’t that just basically what radio is? That is what worked for the last 100 years and probably the only thing that will get one in my car.

This merger is an excellent move for both companies; and long overdue. Given the high structural startup and continuing system operational costs, there never was room for more than one such satellite radio provider in the first place.

In addition to different-system integration problems, however, is the fact that both companies paid far, far too much money–and in some cases are locked into doing so for some years to come–for highly rated/desired content (providers)…leaving in serious doubt whether or not even as a combined company that they’ll be able to reach regular and continuous profitability before the money runs out…and the equity markets announce “Nyet!” when they again come calling for more $$$ to keep them afloat.

For many great reasons, satellite radio is–thankfully–here to stay…even if in the future it may be provided by someone who buys the assets out of bankruptcy…

…and wouldn’t it be interesting to see the obscene Mr. Stern standing in line with the other creditors…trying to collect the the remaining foolish 10’s of millions he was promised…

Unfortunately, this post displays a lack of knowledge about the satellite radio industry and the business models at work. The Internet will not (anytime in the near future) overtake satellite radio in the car, solely because of OEMs. Sirius and XM have locked the major auto manufacturers into long-term agreements to preinstall their head units in new vehicles. The merger is a great idea because in any industry with high fixed costs (read: satellites) the key is scale. Taken together, the subscriber base of XM and Sirius goes a long way toward achieving the goal of profitability. Read more on my blog about why the Internet isn’t the end all, be all.

This article is silly and the people who are down on sat radio obviously have never tried it. Sat radio is not about the delivery system but rather about the content, which I believe is unmatched in the industry. Once you go Sat there is no going back. It provides freedom to listen to music and talk that you want to listen to without FCC and big industry regulation.

This is good news for the consumer. One stop shopping.
http://www.techcrunchme.com

@Ozzie

I have tried sat radio. In fact I am still in my three month free trail included with my car purchase. I will not be signing up for the service when my trial runs out. The sound quality is crap! the delivery system is just as important as the content. Would you pay for sat. tv if it was only in black and white? When my FM tuner sounds better than the sat radio there is no way I’m paying for less quality. If I need some variety I have more than enough CD’s.

Here is an interesting look into the synergies that surrount the merger of XM and Sirius.
(Only viewable via PC-based Internet Explorers)

http://fn.intellectspace.com/i.....0645883301

This deal is a testament to the leadership and negotiation skills of the great Mel Karmazin. The writing was on the wall 2-years ago when Mel convinced Howard Stern to move his show to satellite and the truth of the matter was, whom however got Stern would survive. If XM didn’t agree to merge with Sirius, I don’t believe that they’d last another 2 years. How could they compete when the other company not only has the greatest morning talk show of all time (that is a fact actually - I’m not actually a huge fan of his) PLUS NASCAR, the NFL, NBA, and the NHL? The Time of Death for XM was officially January 9, 2006 (Stern’s first day on satellite), Sirius won the battle - Is there any wonder why Karmazin is running the show and not an XM cheif?

@Bash

Sounds like you had a bad experience with a product. But that isn’t necessarily indicative. There’s a reason subscribers are growing at an extremely fast pace–it’s a valuable service to many people. Also, OEMs are just beginning to really push the product (wait till 2010 when 55% of new autos will have it preinstalled). More specific numbers at my blog.

Any time someone talks about monopoly, I can’t help but think about the Bells… that really worked out.

Verizon Mobile Broadband, Sprint Broadband, etc — I’d love to see some data on how much coverage of the USA they will have and % of the population that will have access. They might only get this service to 30% geographically of the USA, but that might represent 80% of the USA population. [Anyone know if there's any 80/20 rule with the population vs geographic location? i.e. NYC is 0.000000001% geographic coverage of the USA, but is 8mm people = 8/250 = 3.2% of the population].

Once you’ve got internet in the car — you’ve got internet radio, podcasts, and video (disney movies for the kids while you’re on-the-go? sure). Someone has to be working on this type of technology.

The announcement and slides are up at earningscast

@Steve

It’s no where near 30% coverage geographically.

Yellow areas on this map

http://www.verizonwireless.com.....ypopup.jsp

It doesn’t cover the interstate highways system

It’s $50/month. That $50 is not really unlimited access.

I have read your recent post with great interest.

To me, I see the first sign of cracking within the satellite radio space. In addition to the billions of dollars spent on building and maintaining the network, the cost of acquired content is simply exorbitant. Generation Y is simply not interested in what is happening on either terrestrial or satellite networks. The barriers to have your voice heard are beginning to crumble and Blogtalkradio is at the forefront of this movement.

Furthermore, when wimax becomes available in 5 to 10 years and car radios will be fitted with internet access, listenership will significantly erode for both platforms. It’s at that time that Blogtalkradio will truly be a dominant platform.

It clear to me after operating Blogtalkradio for just 5 months, that we are on to something. Last week for example, we had John Kerry as a guest on one show and Newt Gingrich a guest on another. We are running more than 70 live shows a day covering more than 30 categories. The list goes on an on and not just in the political category.

In less than 6 months we have signed up more than 2500 hosts, produced more than 11,000 shows and in March we expect to have close to 1 million listeners.

Best,

Alan Levy
CEO Blogtalkradio

>> Aside from the Howard Stern fans — who will need XM / Sirius at that point?

Exactly. I subscribe so that I can have the BBC in the car. The minute I can easily stream live to my car instead I’ll be ditching it.

It is hard to believe that any monopoly would be good for consumers. Monopoly ALWAYS means less innonvation and higher prices.

@ Dead 3.0

I have XM pre-installed (it came on my 2007 Trailblazer SS) and it has horrible sound quality. It sounds like XM is over compressing the files. Removing frequencies from a sound file does change the way it sounds. Those who say it only removes things you can’t hear are full of it. iTunes is another example of over compression. Take a song downloaded from iTunes and the same song on a CD and listen to them side by side. Its like the walls close in and the ceiling falls. Unfortunately, it is digital, just a very crappy version, so suing for mis-representation, fraud, false advertising, etc. won’t work. I thought my worst audio experience was going to be the Bose system in the vehicle, but I was wrong. Bose = great marketing : only average product. No highs, no lows, it must be Bose. XM = great marketing : lousy product.

WiFi and its minions will beat Sat Radio.
yes, Montana and Wyoming will be left out.
that’s what happens with low population (audience) numbers.
if Big Media can get CA and NY and maybe FLA….the rest of
the nation can do without…..just ask Alaska.
i disconnected XM in December ’cause when i’m in
my car, i’m on my cell and can’t listen to Sat.

How is it a monopoly? Satellite radio is audio entertainment - just like FM, AM, MP3 players, internet, CD players etc. What this does is add better competition to the somewhat monopolistic terrestrial radio system. Why else would terrestrial radio fight so hard and spend so much money to prevent this? I own sattelite radio and I am excited - now I can listen to my Cubbies - which I can’t get with Sirius, and XM subscribers can hear NFL, NASCAR, NBA etc.