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Sirius, XM Merger Gets FCC Approval
Posted by
Soulskill
on Sat Jul 26, 2008 01:09 AM
from the who-wants-a-choice-anyway dept.
from the who-wants-a-choice-anyway dept.
Multiple readers, including koavf, have written to tell us the FCC has finally approved the Sirius-XM merger that has been in the works for quite a while now. CNN has picked up AP coverage as well. We discussed approval of the merger by the Justice Department a few months ago. From CNN:
"The Federal Communications Commission voted 3-2 to approve the buyout, with the tiebreaker coming Friday night from Republican commissioner Deborah Taylor Tate. Tate had insisted that the companies settle charges that they violated FCC rules before she would approve the deal. The companies agreed this week to pay $19.7 million to the U.S. Treasury for violations related to radio receivers and ground-based signal repeaters. FCC Chairman Kevin Martin confirmed the final vote Friday night. 'I think it's going to be, in the end, a good thing for consumers and be in the public interest,' he told The Associated Press."
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[+]
iPhones, FStream and the Death of Satellite Radio 397 comments
Statesman writes "Only a little over a year ago, the
FCC approved the merger of XM and Sirius
satellite radio companies and the combined stock was trading at $4 a share. Despite being a monopoly — or perhaps because of it — the company is failing. They are losing subscribers, the stock is now trading around 22 cents a share (a 97% decline), and they have written off $4.8 billion dollars in stock value. So, what happened? The CEO is blaming pretty much everyone except himself and his business model. But is pay-for-bandwidth even a viable business plan anymore? With millions of iPhone and gPhone users out there, free streaming audio applications like FStream, and thousands of Internet radio stations to access, the question is: why would anyone want to pay for proprietary hardware and a limited selection of a few hundred stations all controlled by one company?"
Read on for the rest of Statesman's thoughts.
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Business as usual (Score:5, Insightful)
Of course, the merger comes with strict conditions to keep things in the public interest.
Conditions like the conditions XM and Sirius were originally given when they were granted space on the spectrum. Conditions such as "these two companies may never, ever be allowed to merge".
Re:Business as usual (Score:5, Insightful)
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Oversight as usual (Score:5, Interesting)
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Re:Business as usual (Score:5, Insightful)
If the companies can't survive without each other, what's the harm in letting them merge?
The companies might have a valid case about 'not being able to survive without each other' if they didn't make almost suicidally bad business decisions like paying Howard Stern 300 million dollars only to find out he can't bring in enough subscribers to even break even on his paycheck.
And if they were to have failed individually, I'm sure there are plenty of buyers who'd love to have gotten their assets and put together a profitable satellite radio company with their current subscriber numbers.
Instead they got what amounts to a bailout -- except instead of dollars, the currency of their bailout is fair competition to the benefit of consumers in a market that's now effectively being made into a government approved, privately maintained monopoly
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Re:Business as usual (Score:4, Insightful)
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I never would have bought Sirius if it wasn't for Stern.
Re:Business as usual (Score:4, Insightful)
Heh, please someone explain the filth that his show supposedly has... I've heard more offensive material than what he has. Is it the pro-homosexuality aspect of the show (George Takei) or is it the open opinions of the show? Controversial interviews? Sick humor (get over it, nerds love sick humor, and if you are grossed out by it then you're on the wrong website). Maybe it's the occasional use the the *quiets* ... f-word used as an adjective... No no no... it's the pro-choice aspect of it. Or is it because he loves to make fun of a certain KKK member? Noooo... no one makes fun of the KKK. Oh wait.. he degrades women... yeahhh... give me a fucking break. With all the female listeners who love the show, the last thing he does is degrade females. If some porn star wants to come on the show, the first thing you would expect is for her to get nude. (What's funny is the same people who beat off to porn find this offensive.) The worst he does is point out the stupidity in porn stars. He's had an African American female co-anchor since the early 80s in DC101. Oh I know why you are disgusted with the filth... because every one who has never heard his show makes negative assumptions. That's the real reason.
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Oh please. Their struggles are about as legitimate as Microsoft's whining that there aren't enough H1B visas being handed out and that there are no qualified Americans for X thousand jobs.
Re:Business as usual (Score:5, Insightful)
Yeah? And Ford has a monopoly on cars made by Ford. w00t. Someone call the lawyers.
All companies are monopolies if you narrow the 'slice' of what you are looking at down far enough. You need to look at the big picture though. Sure, Sirius and XM have a monopoly on satellite radio, but satellite radio sure as hell doesn't have a monopoly on ears. I happily listen to an MP3 player or free radio on my way into work without feeling the slightest pressure to go dump however much it costs for bad satellite radio.
Monopolies only work when there are no or few other viable option. If there is a simple substitution, the monopoly is broken, even if it isn't exactly the same product. It is like if Apple all of a sudden started to charge even higher prices for that silly little MP3 players. You couldn't cry foul over their "monopoly" on iPods. Sure, iPods might not be available at a reasonable price, but a smart person would just pick up another MP3 player that is cheaper.
The reason why they two are being allowed to merge is because one is going to tank if they don't merge. One is going to tank because satellite radio is getting murdered by the competition. If one is going to go bust, it is better to let them do it in a less destructive manner. It would be one thing if satellite radio was dominating and people were clawing at each other to break into the market. That isn't the case though, satellite radio is just barely hanging on. Letting the two companies merge is far more likely to result in quality improvements and price drops as they consolidate their infrastructure and struggle to compete in the less than profitable radio market.
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Although if you widen the slice enough, nothing is a monopoly. Microsoft is not a monopoly, because you can always buy a Mac, or a typewriter, or a toaster. :)
They have monopolized the satellite radio market, but not the greater radio market in general - that's still Clear Channel's domain.
Monopoly (Score:5, Informative)
Depends on how close is the substitution. If Ford was the only company making cars, and the other options were walking and horses, they'd be a monopoly. If Ford ward the only company making SUVs, but you could buy cars and minivans from other sources, it wouldn't be a monopoly in any meaningful sense of the word.
Apple is the only company making Macs, but they don't have a meaningful monopoly because you can always use a PC.
Parent
Re:Business as usual (Score:5, Interesting)
You miss the point entirely. Honda has a monopoly on Honda Civics. Only Honda is allowed to make a Civic by law. Despite this, we don't consider Honda a monopoly, simply because there are lots of other cars by other companies that we consider "civic like" such that you can easily find an alternative. If Honda was to double the price of a Civic tomorrow, you would just by a different car and feel only mildly annoyed.
On the other hand, if Honda was the only one allowed to build cars in general, we would call them a monopoly. Many people need a car and have no real alternative to a car. Sure, airplanes, trains, and buses compete with cars, but they compete poorly in many instances. Only a car is going to drive you 25 miles through a New England winter from one small town to another.
The Sirius and XM merger is not a big deal for two reasons.
1) There are lots of alternatives. If the price of cars doubled, many people would simply shell out double the cash to get one. If the price of XM/Sirius doubles without a quality improvement that people find fair, they will simply stop using the service. Free AM/FM radio are direct competitors with satellite radio. MP3 players are also direct competition for satellite radio. I can't substitute riding the bus for buy a car in many instances, but it is pretty trivial to substitute an iPod for satellite radio.
2) There is going to be only one satellite company, like it or not. Neither Sirius or XM are profitable. One of them WILL go bankrupt in the next couple of years. Once that happens you will be left with... one satellite radio station. They are begging to be allowed to merge because they want the destruction of the companies to be productive, rather then have one scattered to the wind while the other scrambles to pick up the pieces.
Like it or not, there will be only one satellite radio station. The only question is if it is going to happen in a couple of years when one finally throws in the towel, or because they merged and combined programing in an attempt to better compete with AM/FM and MP3 players.
Parent
Satellite Radio is a joke (Score:4, Insightful)
When I think of satellite radio, I think of this:
*Major genres unrepresented.
*Station playlists that would become predictable within a week.
*Sub-genres within all genres utterly unrepresented in general (for example, one Metal station on all of Sirius, and it only plays death metal).
*A whole slew of stations essentially devoted to playing the exact same stuff that you hear on standard Top 40 radio.
*Commercials, despite being advertised as commercial-free.
*Annoying DJs (the receivers display the name/artist playing, you do NOT need DJs trying to be funny between every song).
*Oh, and a monthly fee on top of that.
Frankly, satellite radio was created 10 years too late. Why should I put up with satellite radio when I can use my mp3 player?
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Unfortunately, consumer demand drives it. People listen to what's comfortable. I don't understand why the top40 stations are some of the most popular. Even the "indie" and punk stations play all the same crap. It's clearly selling though.
There's not that much to understand, and you said it yourself- it's what's comfortable. Radio is listened to primarily (really, almost exclusively) in cars and in offices. It's a passive medium, just on in the background while the listener is doing something else.
That's why "shaking things up" rarely works in radio. For the most part, listeners don't want a challenge or to be actively entertained, they just want some inoffensive noise to keep them company.
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Why should I put up with satellite radio when I can use my mp3 player?
I think a lot of the points you make are true. I don't have satellite radio either, but for a lot of people there is a value in it that isn't valuable to you. It's that music isn't something they want to spend real mental energy or time or money on, building a collection, having and maintaining devices to transport and play it, learning of new bands and albums, etc. They just know that they like certain types and want to select those types at will, with minimal effort. Satellite radio does exactly that.
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*Major genres unrepresented.
Name 1. I dare you. A major genre must be a genre of music, let's say, more than 10,000 people in their market (The United States) listen to.
*Station playlists that would become predictable within a week.
No. Not even close. I have an XM system and the exact reason I have it is because the play lists are constantly in flux. Adding to the mix is that most stations have weekly radio shows that feature brand new (some of it without a label or release yet) music. An example if this is XM 82 The System's hosting of Armin van Buuren's A State of Trance. It doesn't get
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Have you ever listened to satellite radio? I'm not sure who modded you up, but they (and you) have no clue.
There's a few top-40 stations, but I never hear them. I have my favorite songs and groups programmed in and it'll alert me when any of them appear on any channel (try doing that, HD Radio).
There's a monthly fee. There's a monthly fee for your Internet service too I bet. So what?
I'm not sure where you get commercials from. A few stations have them, and I don't think any of the music ones on Sirius
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Radio isn't just music. MP3 players can't give you live sports or talk yet (outside of local FM).
Wrong audience. /. will download the commercial free torrent 20 minutes after the game or bitch at each other right her on /. , thank you very much.
People on
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"Radio isn't just music. MP3 players can't give you live sports or talk yet (outside of local FM)."
Interesting you should make this point because the talk aspect is what kept me from even considering satellite radio. There's no such thing as local sports talk on satellite radio. National sports shows are ok but they generally talk far too often about college football teams I don't care about and sports leagues like the NBA that just aren't popular around here. You also can't pick up Clark Howard. At the
No place to go. (Score:2, Interesting)
I had considered XM radio then the merger rumors started to fly so I held back. The problem I have is supporting content I strongly dislike. I can't stand Howard Stern. Yes I know he's God to some people but it reminds me of high school and I escaped from that place a long time ago. I was thrilled when he went satellite but it did drop Sirus off the options list. Now if I get satellite period I have to help pay his over sized paycheck for being annoying. I realized most reading this are likely to be fans bu
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I can't stand Howard Stern garbage either. I suspect that there were a fair number of XM users who felt this way, who will most likely let their membership expire now. So, in the end, it will be the Howard Stern radio with a some people who do not care. You would wonder if the accountants did a study to the number of people that he drove away versus those that he attracted. He really does poison satellite radio for me.
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My dad hates Stern with a passion (I like him, but that's just me). After listening to Sirius in my car for a while, he decided he wants it. He's had it and has enjoyed it for two years. I don't think he's ever once come across Stern by accident.
I don't like some of the channel selections that is on Sirius (I don't want my money going towards Fox News), but that's the choice I'm given. The benefits of Sirius outweighs the few pennies I send to Roger Ailes every months.
And yes, I can't stand O&A, but
The problem is too much regulation (Score:2, Interesting)
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How come the FCC even has jurisdiction over satellite radio? (I guess on this case both companies are based in the US so have to fo;;ow US laws, but anybody from another country that can afford ut ciuld put up thier own satellite using Russian or Eurpean launches...)
Finally! (Score:4, Insightful)
Ultimately this will benefit the consumer. I've subscribed to both companies and my preference is for talk radio/sports. The competition for paid subscribers forced the 2 companies to continually one-up each other for exclusive content and caused problems for me when one company would win the contract from another at renewal time (nascar, baseball, etc.) At one point I had to give up programming I enjoyed listening too or pay for a second receiver with a second subscription in order to keep it.
In the last few years, I've noticed the quality of the programming has deteriorated considerably as well. Once the companies are merged, all the duplicate costs for talent, administration, customer service, etc. should be eliminated and hopefully benefit the customers with a much improved service. My understanding is that nobody will even need to buy new hardware as the channels will be combined on your existing radio.
This is not a monopoly in the sense that we cannot get similar service from another provider. If you find satellite too expensive, or don't like what they have too offer, then get rid of it and listen to terrestrial radio, or your ipod, mp3 player, etc.
What I would be more concerned about than anything else to do with this merger is the question why did this take so long to pass? Oil companies have merged in a fraction of the time with minimal resistance compared to this one!
Internet Radio (Score:3, Informative)
satellite radio seems almost quaint. How long will it be before "internet radio" puts satellite radio totally out of business?
BTW, for iPhone and iPod touch users, here's a good place to start:
http://www.seeqpod.com/ [seeqpod.com]
If you just want a radio gadget, there seem to be a few good ones available now:
http://www.google.com/search?client=googlet&q=portable%20internet%20radio [google.com]
Of course with these you can't play "kill your battery" using them over a 3G network... but then there's always the next thing..
Stern: I Will Never Vote For a Democrat Again (Score:4, Informative)
I don't necessarily agree with Stern, just adding some relevant info.
give them a cookie! (Score:3, Insightful)
Tate had insisted that the companies settle charges that they violated FCC rules before she would approve the deal. The companies agreed this week to pay $19.7 million to the U.S. Treasury for violations related to radio receivers and ground-based signal repeaters.
Oh well that's different! They agreed to pay their fines! We should give them a reward for being such good little boys.
And when I go downtown to pay my speeding ticket I expect nothing less than a thank-you card and a candybar.
What's WRONG with these people?
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Weren't their numbers in the toilet anyway?
I never really had a desire to pick it up and I wasn't impressed with any of my friends purchases.
I'm sure some people like the 24/7 larry the cable guy channel.
Now, I did consider XM when they had the PC interface, but that died with the product.
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What do you mean it died? You can stream XM over the Internet and it even works on Linux with firefox assuming you have the wmp plugin of course.
I'm definitely a fan of XM, I like driving half way across the country without having to fiddle with the radio stations, it just works everywhere I go and no static.
XM has a lot of channels though with something for pretty much everyone. I hate sounding like a commercial for them but they really do blow terrestrial radio out of the water. For me these days it's X
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I think the reference was to the USB dongle that would pick up XM signals directly and play them on your computer.
Re:WTF??? (Score:5, Insightful)
How could a single, monopolistic provider of a service, nationwide, be "a good thing for consumers and be in the public interest" ????
Has Orwellian doublespeak progressed so far??
Because Satellite Radio is not a monopoly; it is competing against FREE terrestrial radio, mp3 players, ipods, FREE internet radio, etc.
Parent
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I'd care about sat radio if they carried one of the most awesome stations in the country, 89.5 FM WSOU [wsou.net]. Seton Hall Pirate Radio, winner of numerous awards, and some of the best DJs around for rock music.
It's the only station where you can hear Metallica played back to back with something newer like A Perfect Circle or Machine Head.
And on Sundays, Polka music!
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For months, I believed that satellite radio could not be considered a monopoly, for the reason cited above: namely, that it competes with terrestial radio and the like.
However, were this true, what would keep DirecTV from merging with Dish Network? It's an identical situation. I can tell you, after having to badger DirecTV for months to receive a promised refund (including filing through a chapter of the BBB which has been overwhelmed with DirecTV complaints), that competition is oftentimes preferable
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I certainly can't listen to terrestrial radio, mp3 players, ipods, nor internet radio under the same conditions that I can listen to satellite radio.
Sorry, I can't parse that. Do you mind explaining what you mean?
Re:WTF??? (Score:4, Insightful)
For crap's sake, their competition has hardly changed since they came out with their product - radio and TV aren't getting any "more free" after all and my internet bill has yet to go down.
Aside from the arrival of HD Radio, the explosion of ipods and MP3 players, and Internet Radio, you're right.
Last, from TFA: "The companies said they would introduce radios that receive both XM and Sirius channels." If memory serves, they said the same 10+ years ago. Can someone tell me why companies are allowed (seemingly encouraged) so often to act like petulant 5 year olds?
Given neither Sirus nor XM were broadcasting until 7-8 years ago, I'm not sure how you could have heard that, or thought they would make compatible radios.
Correct me if I'm wrong, but translated that means in at most another 10 years, SeriousExcem is already going to have to start replacing these satellites. Of course, none of the existing satellites will have a problem in the mean time.
That's why at least XM and I think Sirius have launched new satellites recently, and yea, the life expectancy is about 20 years. So what?
Parent
Re:WTF??? (Score:5, Insightful)
Parent
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Its probably still better than the Terrestrial radio I recall from the last time I went through the area.
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Good idea. Take two companies that can't pay the bills, and put them together. After a merger, all the suits stay, and they can half of the rest of the employees because they're redundant. So you get one company with twice the fat... and they'll be able to pay the bills *better* than the old companies?
While in some ways there will be fat; now they won't be competing (or killing) each other paying for talent and licensing fees... $500m for Stern, $300m for Oprah, something similar for baseball, etc.
These people and services were playing the two companies against each other.... now they can't do that.
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A single satellite radio company is not really a "single, monopolistic provider of a service, nationwide" though. It's a direct competitor of traditional radio. It also competes with mp3 players and podcasts, CD's, audio books, etc. If they started any sort of monopolistic practices, people can just cancel their subscriptions and choose a multitude of other audio distribution methods. The justice department spent over a year investigating the issue and ruled that it would not in fact be a monopoly.
The t
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There's always HD radio (Score:2)