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XM And SIRIUS Radio Merging 301

Posted by ScuttleMonkey from the monopoly-is-such-a-fun-game dept.
lenny6998 writes to tell us Yahoo! News is reporting that XM and Sirius Radio, the only two major players in the relatively new market of subscription satellite radio have announced a merger. "The two companies said in a statement that Mel Karmazin, the CEO of Sirius, would become chief executive of the new company while Gary Parsons, the chairman of XM, would remain in that role."
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XM And SIRIUS Radio Merging More

XM And SIRIUS Radio Merging

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  • Egos (Score:5, Insightful)

    by teiresias ( 101481 ) on Monday February 19, 2007 @05:15PM (#18072390)
    A more interesting merger than XM and SIRIUS, is really now Howard Stern and Opie & Anthony being on the same network.

    Can one satellite network handle two (well three) giant egos.

    Let's find out.

    • Re:Egos (Score:4, Interesting)

      by airos4 ( 82561 ) * <changer4&gmail,com> on Monday February 19, 2007 @05:18PM (#18072466) Homepage
      Well, it didn't work so well when one terrestrial company tried to contain the three of them. WNEW had them all at once, and O&A were treated as the little stepbrothers who were slapped with gag orders and so on regarding talking about Howard. I foresee tension in the Force.

      On another note, how will this work hardware-wise? Can they in fact offer one united channel selection over any current hardware? Will they continue to offer two separate "branded" offerings that each go to the proprietary radios until new hardware can be rolled out?

      • Re: (Score:2)

        by acroyear ( 5882 )
        and more importantly, what will become of "duplicate" channel offerings. Both have a standard symphonic classical station, a vocals/opera station, and a "pops" station, and that's just within the classical genre, the smallest. Which of those 6 identities will survive?

        For the larger genres like "rock" or "urban", what will survive?

        Wall Street may like the certitude this brings financially, but the customer base on BOTH networks will have to deal with a LOT of uncertainty as to which of their favorite shows

  • Didn't the FCC already say no? (Score:4, Informative)

    by MSRedfox ( 1043112 ) on Monday February 19, 2007 @05:15PM (#18072396)
    We already covered the FCC saying no. http://science.slashdot.org/article.pl?sid=07/01/2 2/2237249 [slashdot.org]

    • What does "no" really mean? (Score:5, Insightful)

      by Infonaut ( 96956 ) <infonaut@gmail.com> on Monday February 19, 2007 @05:23PM (#18072556) Homepage Journal

      We already covered the FCC saying no. http://science.slashdot.org/article.pl?sid=07/01/2 [slashdot.org] 2/2237249

      I was wondering about that too. They either are so desperate for a merger that they'll take their chances with the FCC, or they've already talked with Martin and convinced him that it won't be anticompetitive.

      Who knows, they may succeed in framing the competition issue as one applying to the streamed audio market, which encompasses radio, Internet radio, and sat radio. When discussing broadband, the FCC frequently defines the market rather broadly, incorporating dish access into the discussion, as if it is a serious market participant. Given their generally broad interpretation of communications markets, they (or at least Martin, Tate, and McDowell) may buy the argument.

      • Re: (Score:2, Informative)

        by skoaldipper ( 752281 )
        I think you're right. From the article,

        "XM and Sirius have both posted significant financial losses as they built up their programming lineups and recruited subscribers. Both stocks declined more than 40 percent last year on concerns about their continued growth in subscribers and softness in the retail market"

        We have seen AT&T emerge in full body once again, acquiring new limbs along the way too (like Cingluar).

        I buy their argument that subscription growth has capped. Also, emerging markets like the

    • Re:Didn't the FCC already say no? (Score:5, Insightful)

      by dr_dank ( 472072 ) on Monday February 19, 2007 @05:23PM (#18072572) Homepage Journal
      I guess the check finally cleared.
    • Yeah, it's weird. I suspect that they will attempt to appease the FCC somehow. Maybe by renting out space on their network?

  • Look up... waaaaay up (Score:5, Funny)

    by MarkRose ( 820682 ) on Monday February 19, 2007 @05:15PM (#18072398) Homepage
    Methinks it's time to buy a telescope to watch them merge the satellite!

  • Huh? (Score:3, Insightful)

    by rudy_wayne ( 414635 ) on Monday February 19, 2007 @05:16PM (#18072422)
    XM and Sirius have never been profitable. They have both lost hundreds of millions of dollars since their inception. So what good is a merger?

    • Now they can lose money together...

    • Re:Huh? (Score:5, Interesting)

      by cdrudge ( 68377 ) on Monday February 19, 2007 @05:25PM (#18072622) Homepage
      If you look at the combined content of the separate companies, there is a lot of duplication of effort. Each provider has some exclusive content, but the majority of content is duplicated. There is also 2x the infrastructure, 2x the personnel, 2x the billing systems, etc. Well, it may not be exactly 2x but you get the idea. By combining the two, you combine the customer base yet cut the overall operational budget. Thus the bottom line is improved. There could also conceivably be some added advantages of freeing up bandwidth. Or they could sell of the radio spectrum too.

      Nothing will be decided probably until at least years end. Even if they get approval, it will take some time to also figure out the technical details as to who's equipment to go with, who gets laid off, etc. Actual savings probably won't be seen for several years, but if indeed they do merge, the cost of competition gets a lot cheaper in a hurry.

      • Re:Huh? (Score:5, Informative)

        by Miamicanes ( 730264 ) on Monday February 19, 2007 @05:53PM (#18073038)
        The majority of content is NOT duplicated. Sirius and XM sound NOTHING alike. Sirius channels sound like normal radio stations, but without commercials. XM channels sound like somebody took a random pile of CDs, shoved them in a changer, and hit the "shuffle" button.

        They're about as equivalent as Tylenol, Ibuprofen, and Naproxen sodium. Yeah, they're technically all painkillers and reduce fever, but anyone who's ever had a headache or fever knows that they're definitely NOT all the same. Tylenol utterly sucks compared to the other two, but some people are forced to use it because they can't tolerate them. Ibuprofen rocks for headaches, but sucks for fevers (unless you enjoy having your fever come back every 4-6 hours). Naproxen sodium is a godsend for fevers (breaks once, stays that way), but a complete waste of time for headaches. The same is true of Sirius and XM. Both have slightly different audiences with different expectations -- all of whom are going to be FURIOUS if their network mutates into the other. Even slightly.

        Talk to anyone who subscribes to either service. I guarantee that 99% of them will react to the news of a merger with absolute horror at the thought that ${their_network} will get turned into ${other_network}. I *guarantee* that if a merger happens and the music channels from one or the other get dropped to "streamline" and "eliminate redundancy", AT LEAST half of the losing service's carriers will leave in disgust. At the same time, the "winner" network will probably lose at least a quarter of its customers if it changes even slightly to be more like the loser's format was. Ultimately, we'll be stuck with one mediocre provider whose financial position is only slightly better than before, and now has hundreds of thousands of angry and pissed off former customers saying bad things about it and discouraging their friends from subscribing.

        This is horrible news for the customers of BOTH services. I expect to see an outpouring of anger from customers of BOTH Sirius AND XM demanding that the FCC NOT allow a merged company to own both frequency bands in a desperate effort to derail the whole merger.

        • Re: (Score:2)

          by edwdig ( 47888 )
          Your comments are dead on. If my XM stations go away, then it's no longer worth paying for. If I wanted playlits like Sirius, I'd just listen to FM and save myself the monthly bill.

          That said, there still are redundancies. Most of XM's stations in the 20's are just variants of your typical FM stations. Not to mention there are duplicates within there, as you have the XM programmed commercial free ones and the ClearChannel programmed ones with commercials. The rock stations are really different between XM and

      • Re: (Score:2)

        by RevMike ( 632002 )

        If you look at the combined content of the separate companies, there is a lot of duplication of effort. Each provider has some exclusive content, but the majority of content is duplicated. There is also 2x the infrastructure, 2x the personnel, 2x the billing systems, etc. Well, it may not be exactly 2x but you get the idea. By combining the two, you combine the customer base yet cut the overall operational budget. Thus the bottom line is improved. There could also conceivably be some added advantages of fre

    • XM and Sirius have never been profitable. ... So what good is a merger?

      Merging will allows the companies to combine a lot of operating costs by eliminating redundant employees. It will also allow the new company to provide a better service to customers, as the two systems can be combined to provide new channels, at least to anyone interested in buying new hardware.

      Most importantly, merging allows the companies to stop worrying so much about beating each other and start focusing on the new juggernaut in the audio industry--digital music players. Portable digital music players

    • If they can merge the user bases without too many subscribers defecting, cut the costs of operating competing satellites, cut out the duplication of royalties, and other duplicated overhead, I think they can make money. They bid heavily against each other to get "talents" like Howard Stern and others. They spent far too much money competing against each other when their main competition is really terrestrial radio, podcasts, audio books, mp3 players and such. That's the idea.

      Whether or not they can do th

    • Re: (Score:2)

      by hazzey ( 679052 )

      I thought that they were specifically RESTRICTED from merging. I had read that when the FCC gave them their licenses that a merger was not allowed.

      In fact, here is an article about it from just a month ago.

      Merger [mediaweek.com]

      If it isn't the best link, don't blame me. It was just one of the first ones that I found on google news.

  • Are they going to consolidate the music stations? Offer identical options on both sets of hardware or keep things seperate but merge the overhead?

    One of the reasons I picked Sirius was the music selection on the channels appealed to me more then on XM. Am I going to loose out now?

    This has been talked about before but I've never heard what will actually change for the end user.

    • Re: (Score:2, Interesting)

      by GrayCalx ( 597428 )
      I agree with you. I'm a XM subscriber (because I like Opie and Anthony) but having come FROM a Sirius subscription, I enjoy Sirius' music channels TONS more than what XM offers. Hopefully this is a chance for me to get the music of Sirius with the Talk programming of XM, but we'll see.

      I read an article that stated they may be able to offer al la' carte programming where you pick and choose which channels you get. I hope that comes through as well. I'd pick 10 and hopefully pay less... but you know tha
  • that the name of the merged company isn't iSatellite radio....

  • More Bandwidth? (Score:4, Insightful)

    by Rudy Rodarte ( 597418 ) on Monday February 19, 2007 @05:19PM (#18072494) Homepage Journal
    As a huge O&A/Ron & Fez fan, I hope that the new company gets rid of some of the redundant stations (do we need 4 Top 20 stations?) and allocate more bandwidth to new stations. Maybe the Hideout boys and Ron & Fez get their own station while The Virus goes 24/7 O&A. Every time Ron and Fez mention "big things" for their show, ELo (Eric Logan) mentions the bandwidth issue.
    Also, as a Big XII Alumni (Baylor,) hopefully they'll give us an option to start listening to Sirius content on XM. Oh, and there is that little league called the NFL.
    I'm also curious to see how Opie and Anthony live working umnder the same umbrella as Howard Stern. Time will tell.
  • I bet they now regret cooking up their own incompatible proprietary broadcast protocols to lock their service to the equipment.

    There is such a thing as open standards.

    • Re: (Score:3, Insightful)

      by jandrese ( 485 )
      Don't they operate on similar bands though? How hard would it be to build a dual-protocol receiver now that they're merged? I assume the reason it hasn't been done before is because neither company will license their stuff to anybody who builds a dual protocol box.

  • business model? (Score:4, Interesting)

    by The Only Druid ( 587299 ) on Monday February 19, 2007 @05:25PM (#18072600)
    The thing everyone forgets is that monopoly isn't the problem: it's the abuse of monopoly to unfairly control a market.

    XM and Sirius have so far both struggled for customers for several reasons, not the least of which being problems of customer awareness. Many people simply don't know - and won't learn without extensive research - which network would be better for them (in terms of content, quality and price). People are used to having one radio "network", expecting competitors to just be different channels. The idea of two separate networks with non-interoperable hardware just isn't what people want.

    The question is how this new hybrid company (I love the AT&T joke...) will shape its new business model: if no other satellite companies emerge, will they offer channels 'for rent' to other content providers? Will they continue to own all channels? Etc.

    • Re: (Score:2)

      by Bastian ( 66383 )
      Speaking as someone who dropped his satellite radio subscription after he moved to an area where the local radio was better, I can say I don't believe that a merged Sirius and XM counts as a monopoly. They still have to compete heavily with the free radio that everyone's used to getting, as well as with internet radio and podcasting, and considering how many other satellite radio users I've met, their combined customer bates probably accounts for a very small percentage of the market.
  • All Corporations Merge Into OmniCorp
    Saturday, Jan 1, 2000

    UNITED NATIONS - In a multimedia press conference held Friday at the U.N., top executives from the world's three remaining corporations announced a final merger, uniting the planet's financial resources under the newly created OmniCorp.

    Under the terms of the record $9.2 quadrillion merger, the Global Tetrahedron Conglomerate gains controlling shares of its two final competitors, Time-WarTurABCDis-SonylumbiaAT&T and GM-LockheedZweibSKGBank, creatin

  • Yeah Capitalism (Score:3, Interesting)

    by eno2001 ( 527078 ) on Monday February 19, 2007 @05:42PM (#18072876) Homepage Journal
    We now have another monopoly with little chance of any kind of alternative as the barrier to entry is so high. I trust this means that there will be less content available than ever before. You'll only hear what's "popular" (ie. what they want you to buy this week). I'm just waiting for ClearChannel to buy the new company. Fortunately the only experience I've ever had with satellite radio is via DirecTV (another near monopoly that's hard to avoid if your local cable outlet sucks ass). Before they started touting their affiliation with XM, DirecTV used to have some "Digital Radio" channels. They were actually pretty good. Then the XP partnership happened and those channels were replaced with godawful crap.

    My wife used to love the 80s music channel they had under the old system. But now they replaced that with "Ethel" or "Fred" or somesuch, and it sucks ass. The selection isn't as good as it used to be. And invariably they wind up throwing in stuff that doesn't even fit. The "80s" channel they have now has a "wider" definition (ie. only what they consider to be 80s instead of what was REALLY definitive 80s) of 80s in that it doesn't just feature punk and new wave stuff like the old one. Now they throw in all sorts of things (some of which aren't even 80s) that are vaguely "alternative" with the occasional crap country song thrown in. My guess is that since country is such a popular format (even though it sucks ass in my opinion) they are hoping that by dropping in an occasional tune, they might get some new buyers from people on the fence.

    Yet another annoying factor is that the old system used to tell you on screen what was currently playing and which album it was from. It was very informative. The new system just gives you a little info and 90% of the time it's completely wrong. If that's what XM is like, then they can shove it. I hope they die a spectacular death because music lovers don't want satellite or subscription radio. Music lovers want a smörgåsbord of endless new and old music that is either thrown in as a "freebie" or totally free. And if the selection is varied enough, THEN and ONLY THEN will the music lover plunk down the cash for the goods. That's the way I roll. I listen to college radio and the BBC via the net (and I'm approaching 40) because in many markets it's the only place to hear good new music. If it's good enough, I check and see if eMusic has it and download it. If not, then I get it from Amazon on CD. Satellite radio is only for boring old people who still think Cadillacs are cool looking cars or who think they're being radical when they buy a modern Volkswagen Beetle. LastFM is about the only other option, but I fear that it will be pounced on by the big players and hence ruined once they reach a certain critical mass.
    • Take the money you would've spent on satellite radio in the next 6 months (as well as the receiver) and purchase random recommended songs off iTunes (subscribe to last.fm [last.fm] for a good recommendation list based on your own tastes) or some other service instead, then bring them with you on random shuffle play.

      I listen to CDs or other personal audio half the time (unless one of the shows I like on CBC radio [radio.cbc.ca] happens to be on the radio, or the news). Paying for music I might not want to listen to strikes me as od

    • Re: (Score:3, Informative)

      by TaliesinWI ( 454205 )
      My wife used to love the 80s music channel they had under the old system. But now they replaced that with "Ethel" or "Fred" or somesuch, and it sucks ass.

      Well, which is it? 80's (channel 8), which plays mostly Top 40 hits from that decade with some deep cuts tossed in, or Fred (channel 44), which is "classic alternative", which is going to play New Wave and some punk, mostly from the 80s, but sometimes possibly a bit earlier and possibly reaching into the early 90s, or Ethel, which is going to play newer v
    • Its only a monopoly on one sort of communication and as such I don't think it really matters. the barrier of entry was probably too high to begin with, hence they had no choice to merge. The market is just not big enough to support two players, it might not be big enough to support one player.

      Consider that both put satellites up there, both developed the receiving hardware as well, and both were essentially fighting for the same customers.

      It might just be better for subscribers because it means satellite

    • Re: (Score:2)

      by edwdig ( 47888 )
      My wife used to love the 80s music channel they had under the old system. But now they replaced that with "Ethel" or "Fred" or somesuch, and it sucks ass. The selection isn't as good as it used to be.

      That's because you're looking at the wrong channels. Ethel focuses on modern rock with a lot of 90's stuff mixed in. Ethel mixes radio singles with other album tracks, or even occasionally semi-obscure stuff.

      Fred I'm not so sure about, but I think it exclusively plays non-radio tracks. It's described as "Ground

  • A bit worried (Score:4, Insightful)

    by m3gatr0nX ( 1066120 ) on Monday February 19, 2007 @05:43PM (#18072890)
    As a Sirius subscriber, I'm a bit worried what a merger, if approved, might bring. They mention a more a la carte selection of channels. I read this as "tiered" pricing. If I had to guess, it sounds like it will be more modeled after the pay-for-tv pricing...i.e. you get a basic package for x dollars, a premium packages for y dollars, oh and you want the sports package? thats an extra z dollars. If it goes that route, I'm really going to have to reconsider if it is really worth it to me. Overall I've been happy with the Sirius service and choice of programming they've had. All for one price keeps it simple and affordable. Any changes to that, which are bound to happen in a merger like this, chances are the consumer loses.
  • Turns on trusty shortwave radio...

    Holy crap a revolution! I get my radio for FREEEEEE!

    • I just got back from a week in Costa Rica, and the pickings on shortwave were awfully thin. All I wanted was news from the outside world. My Spanish is up to the task of ordering in a restaurant or asking directions. The local radio [911laradio.com] was far beyond my linguistic capabilities, though they played great music...

      All I could get was Radio Netherlands [radionetherlands.nl] and (for an hour each afternoon) the BBC World Service [bbc.co.uk]. I'm used to non-commercial radio, since the only radio I ever listen to at home is the CBC [www.cbc.ca].

      Streaming medi

    • Re: (Score:3, Interesting)

      by Just Some Guy ( 3352 )

      Holy crap a revolution! I get my radio for FREEEEEE!

      I hate those stupid ads - are they a Clearchannel specialty? - about not paying for something you can get for free. Well, where I live, I have the choice of Clearchannel Pop, CC Rock, CC Country 1-5, and CC "greatest hits of 80s, 90s, and now". So, I opted for Sirius to hear the great stuff I can't hear over the airwaves here.

      I'm too cheap to ever pay for anything I could get for free. I don't drink bottled water, but I do pay for satellite radio.

  • Will this merger affect my Playboy Radio? I mean I signed up to XM in the first place for it, and when they cancelled it, I cancelled my subscription... Now Sirus has it, I worry about if it will be dropped again...
     
    Got to love Playboy radio...
  • Ever since I was a small boy trying to get the FM reception just right, I've always wanted to pay for radio.
    Not just listen to advertisements, That's not enough of a contribution.

    Oh, and I wanted it to sound like it was in a box, with lots of neat clipping and compression artifacts, instead of free fuzzy fm frequencies.
  • Yahoo! News is not a news agency. They have no reporters. They have a license to publish news reported by various news agencies, such as the AP, Reuters, NYT, etc.

    This particular article was reported by AP Business (Seth Sutel). The page even has the Associated Press logo at the top right.

    Not very difficult.
  • Now there's a satellite radio monopoly. That monopoly has competition in terrestrial radio, but that hasn't improved terrestrial radio's quality, because satellite receivers are rare and expensive compared to terrestrial radio.

    I wonder what would happen if the satellite network were unbundled from the content, and every media player mobile phone could receive satellite signals.

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