back to article Sirius and XM's star-crossed merger

One man's "merger of equals" is another man's "merger of disasters." In the case of XM and Sirius, US regulators need to figure out just what kind of men they are. And nothing less than your rights to, well, sound will hinge on their decision. It's been 76 days since XM and Sirius filed their merger intentions with the …


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well... it worked for Sky

We've had this before with the satellite TV companies here - BSB were going to the wall, and Sky Television were going to the wall. They merged, and we've got a 800-tonne gorilla of the TV world as a result. Might happen again?

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Commercials? On radio you're PAYING for? ABSOLUTELY NOT.

I had XM until nearly 50% of the channels I liked had commercials.

Excuse me? The major reason I bought XM was to get away from the ad-filled crap.

Plus now they've censored two of their shock-jocks (which I don't listen to) and the other reason I bought XM was to get away from the FCC puritans. Hey, you don't want to listen, any XM radio lets you drop their channel from being in the list of available channels.

If they let this merger happen, then I think there will be major lawsuits. I hope.


RE: Commercials? On radio you're PAYING for? ABSOLUTELY NOT

I wasn't around then, but I've been told cable TV (in the US anyway), was originally commercial free. Now I pay $65 a month for 4-5 minute commercial breaks every 12 minutes and an extra $15 month to be able to skip them with my DVR.

I'm sure when I'm ad old man I'll tell my kids about the good ole days of satellite radio with no commercials. And I'm sure they'll look at me funny.


Merger, I barely met her...

I must disclose that I own a lifetime suscription to Sirius that was purchased for me as a gift and I enjoy the programming offered.

Sure, if I had my way, I would want to listen to Baseball (only on XM) and I don't care if I get Howard Stern or not.

I've already felt burned by satellite radio, as I used to enjoy high-quality streaming audio via the Web, but a ways back, Sirius cut the quality of the 'free' Web-broadcast to 32kbs, so now, it sounds like it's coming over a poor cell phone reception. WTF? I paid for LIFETIME and they lowered the quality on me. If I want CD quality, I can pay an extra monthly fee for something I had, that was taken away.

I see a merger as doing much more of this, from making me pick a set of 'packages' (or subsets of stations) and basically reverting my service to 'basic cable' from what it once was. Oh and by the way, if I want that one channel that I really like, that's on the Platinum Package which I'll have to pay $50 a month for... oh, and also, I'll have to give up some other channels I like, since there isn't enough bandwidth to get them all.

This seems like a terrible idea if they want to attract more customers or even keep the ones that they have. This is a bailout, pure and simple, for the services to consolodate staff, programming and save on advertising. All the horrors of monopoly are right in front of us and I can only hope and pray that the FCC tells XM and Sirius to fix their own problems or at least die trying.


Thats 'cosine'

I just never could get behind sat radio. I got a free year's subscription to XM some how, and used it for a couple of days. I didn't own a car at the time, and the signal was so weak that it couldn't penetrate through the roof of my house, so I had to arrange it near a south-facing wall. On top of that, the audio quality was really quite trashy compared to what my computer and stereo can do. They claim 'high def' radio or something, but so far as I can recall the SnR was somewhere around 50dB, which is far better than other sorts of radio, but my CD player and computer will both do over 100dB, and my reciever as well. For those of you unfamiliar with the logarithmic scale that dB uses, that means my equipment works something like 10,000 times better.

Once I got a car, it had an in dash CD changer, and later cars had in dash mp3 cd changers. 6 CDs full of MP3s is one hell of a lot of music, plus they don't fade out every time I do under a bridge/overpass/etc (and in Southern California thats about once every 6 nanoseconds.)

So to summarize, I just don't get it.


XM & Sirius merger - is this a problem?

Much of the "hoo-hoo" about XM and Sirius merging has been "FUD" perpetrated by the "incumbent" terrestrial broadcast community ("free radio", except in the U.K.) who have been lobbying the U.S. Congress since the merger proposal was announced. Terrestrial broadcasters are in absolute terror of a merged XM and Sirius: they see it as a death knell for terrestrial radio.

So, if the competing radio services are scared to death of satellite radio, why does everyone think that the merger is going to be a failure?

Oh, and remember, the terrestrial broadcasters are the ones that supported the increace in royalties on internet radio - because THAT scares them to death as well.

(A reprint of an editorial I had in Radio Broadcast Review on this very subject...)

Having followed the Luddite implementation of HD radio so far, I have to ask the question: is the merger of XM and Sirius a "serious" problem for terrestrial broadcasters, or just another excuse for the poor performance broadcast has been turning in the past few years?

Let's face reality: the DARS went out on a very thin limb when they started broadcasting: huge (and as yet unrecovered) costs for infrastructure, customer capture and advertiser recruitment. Yet they chose to make the unenviable investment in innovative technology, breaking ground in a completely new medium that happens to target a market already served by incumbent terrestrial broadcasting. DARS paid heavily to break this ground, and, if the market doesn't turn around for them soon, we may see several new meteors as the satellites are deorbited.

So why the concern from terrestrial broadcasters? DARS does NOT serve the majority of the listener market - only 10-12 million subscribers, and the actual listening numbers less than that. The advertiser base (on XM at least) is only about half a dozen cross-channel clients, and given the large amount of fill around the adverts, even these are being spread thin to fill the medium. With the additional hurdles of requiring cost-plus receivers and subscriptions from consumers, this is very much an up hill battle for the satellites to fight.

The only POSSIBLE threat to incumbent broadcasters is IF the satellite services are doing a BETTER job of providing service to the consumers, and actually taking listeners away from the terrestrial market.

Hmmm...could this possibly be the case? Could it be that this "upstart" pair of services has found the "sweet spot" that allows delivery of content consumers WANT that is unavailable from the incumbent broadcast base?

Oh, here's another clue: if terrestrial broadcast were providing the content that consumers wanted - both in content and delivery - would iPods be such a big problem? Is it possible that the iPod "phenomena" - and the huge set of issues surrounding content ownership and licensing - are indicative of the larger problem of broadcasters (and their suppliers/advertisers) losing sight of the SERVICE that they are supposed to be providing: consumer ENTERTAINMENT?

Come on, folks! Get a clue! Broadcasting is NOT the business of driving profits for investors - it's the business of providing ENTERTAINMENT to consumers that generates a profit from consumer DELIGHT, not legislative lock-down.

If the satellite services can't provide better entertainment than terrestrial services, they will fail - quite spectacularly - without any legislation. They are almost there now, and a merger of XM and Sirius will not change the outcome - except to accelerate it as the "choices" that each offered are eliminated to "streamline" operations.

On the other hand, if DARS IS providing superior customer service...well, the same melt-down can happen in terrestrial radio.

I'll conclude with my vision of broadcast entertainment in 2015:

The "Big Four" broadcasters - AT&T, Sprint, Verizon and Microsoft - provide 70% of all terrestrial broadcast content;

30% of broadcast content is obtained by consumers from "local" content providers via Bluetooth and WiFi "zone" broadcasts operated by individuals, clubs and retailers;

95% of the US population gets its entertainment via "real-time Podcasting" on their broad-band/Bluetooth/WiFi mobile phones that "dock" in their vehicles and homes;

The US Department of Commerce's Traffic Watch and Navigation satellites "Rock" and "Roll" are replaced after 20+ years of service with new satellites "Lost" and "Found";

The AM and FM spectrum is reallocated to Amateur Radio to develop a use for this "unused and useless low-information-density" spectrum;

Hey, it might not be true yet, but that's the way I see 'em.

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Why did we start this anyway?

Sat radio was bust when it started. Gobs and gobs of elevator music that are the equivalent of Soma (see book: 1984) pills. What a waste of something that is expensive (how much for the radio?, and you want me to pay more every year?) and doesn't perform that well.

I can get a nice portable FM radio for about $20 that will work quite well. It even has an AM section that will tell me the local traffic (lots here in sillycon valley!). My nice "personal transporter" (it has a V8 in it!) even includes one already installed, and it is FREE after that. Satellite radio isn't that high quality and it will fade out in the drop of a hat (or overpass).

I might add that this "high definition" stuff is even worse. It doesn't work either and with the cost of radios that will receive it, that is dead as well.

What will probably happen is they they might let them merge, and when commercials are added (necessary to make money!!) the users will just say "why bother".

Let them die in peace as they are.

Remember how satellite phones were supposed to work? The only way they function now is because the original companies went "titsup". Sell the stock NOW!


There is competition

I switched to satellite radio (Sirius) in my car, and I would hate to go back to FM.

I have ten or so channels I usually listen to, but on long trips I might go through the spectrum a bit. There are good channels with good music on them. Its not perfect. The programming is very good but not great.

However, no commercials on the music stations I listen to. ESPN radio has commercials. Howard Stern has commercials (though they're really short and infrequent.) But, a) there's always something to switch to in commercials. I never go from a commercial to a commercial. b) I can see on the on-screen display which stations are on commercials and which are not.

I can listen to any NFL game. I can get notifications when scores change in anything except baseball.

Some of the music has stuff you won't find on any other radio station, except maybe some specific college radio shows. There is a classic hip hop station. There is a classic rock station (and it really is classic rock, not just Journey and Steve Miller.) And there's the BBC Radio 1.

Its worth my $10/month.

Regarding the merger, if it happens and they raise the price, I'll drop the service. Its not a utility. I don't need it, and neither does anyone else. So, let them merge. The worst case is they'll jack the price up, or add more commercials -- in which case they're out of business. I'd bet that most consumers of such a luxury item are totally sensitive to the price and quality of service. We do have alternatives. They suck, but they're alternatives.


Obvious solution

If they want to merge, the government tells them to pick a hardware standard so that they're both on it. Afterwards, the government can grant a merger so long as one of the licenses are surrendered within 180 days of the merger. No worries about equipment, no worries about monopoly. Everybody gets transitioned to the same hardware, and now there's room for another competitor to come in and buy the other license.

Leave it to the United States government to screw that up, though.

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