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Justice Dept. Approves XM/Sirius Merger
Posted by
Zonk
on Tue Mar 25, 2008 09:05 AM
from the two-great-tastes dept.
from the two-great-tastes dept.
Ripit writes "Just yesterday the Justice Department approved the merger of Sirius Satellite Radio and XM Radio, a Sirius takeover to the tune of $5 billion. The transaction was approved without conditions, despite opposition from consumer groups and an intense lobbying campaign by the land-based radio industry. 'In explaining the decision, Justice officials said the options beyond satellite radio -- digital recordings, high-definition radio, Web radio -- mean that XM and Sirius could merge without diminishing competition. "There are other alternatives out there," Assistant Attorney General Thomas O. Barnett said in a conference call. "We just simply found that the evidence didn't indicate that it would harm consumers."'"
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Sirius, XM Merger Gets FCC Approval 187 comments
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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since Satellite radio has so few consumers (Score:4, Funny)
Re: (Score:2)
And so the only real way to decrease price is to increase the customer base, I'm surprised it took so long to approve this merger. In so many ways, it is similar to the government sanctioned cable monopolies - building two competing 'satellite' networks would driv
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For those of you complaining about why pay for a service you get for free, I'd ask the same thing about free air TV vs. cable. In general, I don't like broadcast TV, and I don't like free-air radio. Cable has a large number of options, and so does satellite. I like being able to jump from a channel of strictly 80s music to a channel with traffic and weather for the area I'm in to music my 5 year old will want to listen to and then switch over to some elec
Stupid (Score:2)
Re:Stupid (Score:5, Insightful)
Eventually you'll probably see receivers that can receive both services, but that will depend a lot on how the companies decide to merge their two technologies. That likely won't happen for years though, and during all that time they have to keep supporting their existing customers.
Parent
Worthless? (Score:2)
It's not like XM or Sirius would destroy their infrastructure (satellites) simply to sell more receivers. Besides which, if they made every radio receiver obsolete, how would they sell you their service?
What they'll have to do, at least for the medium term, is support a unified service that is transmitted in both infrastructures. In the longer term, since the frequencies are governed by the FCC, you'll probably see dual-receiver tuners, sort of like the AM/FM tuner in your car.
Do
Took them long enough... (Score:4, Insightful)
Of course a number of these other huge mergers didn't require FCC approval as well. The XM/Sirius merger now as to wait for FCC approval, so it's going to end up being a lot longer before this is all said and done. It absolutely disgusts me that XM/Sirius is taking so much longer than the consolidation of the oil industry, telephone industry, etc. This will end up being the longest approval process in history. What justifies taking so long when mergers involving bigger economic concerns like oil took hardly any time in comparison?
Re:Took them long enough... (Score:5, Informative)
I agree that a year is a long time for the Bush so-called administration to make a ruling that contradicts a law. Usually that's done before morning tea.
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I don't beleive that's accurate (Score:3, Interesting)
That is not accurate.
http://en.wikipedia.org/wiki/XM/Sirius_merger [wikipedia.org]
Re:Took them long enough... (Score:4, Funny)
Parent
Identical to HDDVD vs Blu-Ray (Score:2)
The adoption rate of XM and Sirius have been slowed because of the close competition. Many consumers simply could not justify the purchase of one over the other. I'm in this group, I would love to have a subscription to a satellite radio service but I liked certain aspects of each. This is very close to the high definition wars slowing adoption rate.
The difference is the same companies have stake in both current DVDs and their high defi
I support this (Score:4, Interesting)
That said, if xSiriusM decides to raise prices or add back advertising or what have you, people will desert them in droves. Terrestrial radio is only worse because they have made a very strong effort to make satellite radio better. If they move towards a ClearChannel-esque service model, they'll be out of business in a year. Particularly ads. God help them if they put in ads.
IMO (Score:2)
people don't know what a monopoly is (Score:2, Interesting)
That shows you that most people don't know what a monopoly is. As long as you don't depend on satellite radio, your opinion doesn't matter. Listen to your free radio. That given, it shows that the 2 companies merging will not effect anyone who needs to have their radio.
Now what about Chevron-Texaco? People depend
Long overdue (Score:4, Interesting)
Profitability (Score:2)
Maybe Sirius' audio offerings wont suck now... (Score:4, Interesting)
Meanwhile, I used to listen mainly to their christian rock station. They then drop it and about a dozen other stations. They encouraged me to listen to Spirit. That'd be like dropping the headbanger's station and telling a metalhead to listen to the Elvis All Day station. Okay, so both may technically fall under rock. But they're worlds apart. Siriusly, you might as well just try towing a 20ft trailer with a Prius.
Stupid, they totally don't get their own markets.
***
Maybe this merger will improve the quality of their programming.
Re: (Score:3, Interesting)
My work in radio has mostly involved logos and branding for radio stations. I sometimes want to stop the pe
Thank you, Justice Department! (Score:3, Funny)
This is a good thing for consumers (Score:3, Interesting)
XM and Sirius are premium services and thus will probably could not have survived on their own.
XM radio helped keep people in New Orleans informed long after all the terrestrial radio stations were shut down. Yet Clear Channel tried to get legislation passed [house.gov] to prevent satellite radio from providing local weather and news information.
Merger is not complete. (Score:5, Informative)
Why I think this is a good idea (Score:5, Informative)
Radio needs Satellite radio! For the last decade, I have been striving to find quality programming on radio that wasn't lacking the polished professionalism of most college radio stations and at the same time wasn't the over-researched, payola driven, target market homogenization of your typical Clear Channel station. That was found in Satellite radio for me.
The key differences with satellite radio and AM/FM these days is this. AM/FM is losing listeners every day. Advertising is down 15% in the last few years and listeners are turning off the AM/FM radio for other mediums. Instead of taking a chance with formats like in years past, stations owned by large corporations and disappointed shareholders instead become more conservative and try to be less distinguishable than before to attract the largest number of listeners. What happens is a large number of stations in a given market end up with eerily familiar formats, with little to no variance in station programming.
Satellite radio has taken a different approach. With such a comparatively smaller audience nationwide when compared to there traditional counterparts, Satellite radio will do anything to attract listeners, and that has been through offering dozens of niche stations with specific programming. It's fantastic sitting in my car and listening to Deep House music in one station, NCAA March Madness another, and obscure underground classic from another. It's what FM used to be 13-40 years ago in my opinion.
In short, FM is playing conservative to keep what listeners they have and are losing daily, while Satellite is taking chances to draw whatever listeners they can get.
Why is this merger good? Both stations are fiscally hurting, and a quality medium like Satellite radio needs to be strengthened against not only AM/FM/HD radio, but iPods/Podcasting, and streaming radio online.
compatibility? (Score:4, Interesting)
Neither company has (Score:5, Interesting)
Also I don't know this for sure, but since Sirius would be the buyer here wouldn't they make sure their combined network is compatible with both existing Sirius and XM hardware? Changing that would only piss their customers off, so those of you who already have Sirius or XM shouldn't need to buy new stuff.
We do have alternatives (Score:3, Interesting)
In the meantime, AM and FM radio has gone downhill so fast it's unlistenable now. What with all the generic programming, massive amounts of commercials, and the fact that you constantly have to tune to different stations if you are driving any distance. I've always wondered why they hadn't come up with a way to expand the radius for their signals, whether via repeaters, satellite stations, or some other method.
To be fair, satellite programming has gone downhill as well. Both companies are losing money, have huge expenses, and duplicate much of their content. My hope, as many others are, is that the unified company will be able to focus on better programming and become profitable. I'm getting close to the point that I will not renew my subscription unless things improve at Sirius, and I will not consider going back to XM.
The argument that they now have a monopoly on the market is not the same as other industries. I'm already making up cd's or using my ipod with tons of podcasts, music, and ebooks for traveling and if the programming for satellite radio doesn't improve, or the cost increases, they aren't getting a renewal from me and we as consumers have many alternatives.
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...and has no coverage in the US and Canada, which is where Sirius and XM operate.
Re:Umm... what other Satellite Radio is there? (Score:5, Insightful)
The issue has little to do with what competition remains within satellite radio, but whether there remains competition. Satellite radio competes with broadcast radio and a number of other formats, so the merger does not remove competition, but makes the combined company more efficient and less likely to lose money.
Both XM and Sirius are bleeding money right now and that can't last forever. If the the industry allowed them both to go under that would counterproductive to helping competition.
Parent
Re:Umm... what other Satellite Radio is there? (Score:5, Insightful)
Parent
Re: (Score:2)
Which we will hear in the car how exactly?
Re: (Score:3, Insightful)
The government's role in approving mergers is not designed to ensure that you personally will have multiple choices of product to meet your individual needs; it's to promote competition in the market as a whole. Internet streaming radio is a valid facto
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Let's try something different; based on your assumption that sat. radio is competing with iPods, terristrial radio and CDs, should we now allow all FM stations to merge into one? After all, they are competing with sat. radio, iPods, etc.
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It's all got to do with percentage market share. If you look at broadcast and satellite market as a whole, if both XM and Sirius had say 40% or ever 20% of that market each, then no they wouldn't be permitted to merge. Letting XM and Sirius merge at this point does not red
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Why stop at just broadcast and satellite radio? Why not talk about the "background entertainment and current events" market as a whole, of which XM and Sirius are an even smaller pa
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Apparently, you don't have satellite radio if you think the sound quality is higher.
Access to the same channels from anywhere is only useful if you travel a great deal, which most of the po
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I have satellite radio. I lose signal, not static but complete signal loss, in heavy tree coverage, in parking garages, in areas with tall buildings, going up and down curving mountain roads, etc. And, the sound quality
Re:Umm... what other Satellite Radio is there? (Score:4, Insightful)
Parent
Re:Umm... what other Satellite Radio is there? (Score:5, Insightful)
XM is not the biggest competitor for Sirius (nor vice versa). CD/MP3 players and AM/FM broadcasts are - and HD radio is marketing aggressively to try to maintain that market segment. The driver for lowering satellite radio prices and improving content is persuading people that it's worthwhile to adopt satellite radio and pay the subscription fees. A market war between two satellite providers would only drive prices up and deteriorate service quality.
Parent
Re:Umm... what other Satellite Radio is there? (Score:5, Informative)
But, increasingly, the traditional radio stations are all owned by Clear Channel and the satellite stations are the only ones offering content like that. If you're looking for continuous, commercial free, specialized radio channels with national coverage
If the choice is down to the Clear-Channel payola and commercial dominated crap, or the now merged Sirius/XM broadcast on satellite, that hardly represents consumer choice. This is like a choice between the "old radio model" and the "new subscription model", with the option of playing your own CDs and MP3s thrown in.
Then again, I've long stopped expecting US regulators to actually do anything which preserves choice for consumers -- they just do what the corporations want.
And how will creating a new monopoly in the market not eventually drive up prices and deteriorate service quality -- I simply don't believe it's evey played out differntly. They're not in competition with the traditional radio stations, so among people looking for an alternative, there would now be exactly one game in town. Once there is one game in town (*cough* Comcast *cough*) they can abuse you all they like.
Satellite was the only alternative to the traditional model. I must say, I just don't get how this is ultimately better for consumers.
Cheers
Parent
Re: (Score:3, Insightful)
Quite simply - I don't subscribe to your socialist leanings. You would have the government regulate something at the drop of a hat ("but I have to change channels, or I can't list
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So, go start one and make money off it.... if you can. How big is the market for bluegrass or metal in your area? Small market means small earnings through advertising.
Here in Tampa, we have WMNF 88.5, which plays all kinds of crap. But, they don't make any money and follow the public radio model. Begging drives to get money to pay for the programs. Oh, and did I mention they alienate half their potential audience by being somewhere
Re:Umm... what other Satellite Radio is there? (Score:5, Informative)
Comparing this with TV is the short-bus way of looking at it. TV you can only get from Cable (usually only one player in town), Satellite, or OTA (which isn't eveywhere either). I don't know of many places that you can't get at least 10 radio statios + internet.
It's a "new" format and it has to compete with other audio broadcast formats out there. Look at the bigger picture.
Parent
Re:Umm... what other Satellite Radio is there? (Score:5, Informative)
Having said that, even though I make trips like this at least twice a year, I still don't have satellite radio, because I don't see the need. Even with my cheap factory installed car stereo with no auxiliary jacks, I can burn a few CDs from my MP3 collection to fill the hours when there are no decent radio stations. Maybe if I did that sort of traveling on a monthly basis or something. Regardless, I have a hard time seeing the appeal of paying a monthly fee for radio unless I'm a traveling salesman or something. Radio is not like TV, it's not something that people will generally listen to in their spare time. It's usually something people listen to when there are no other entertainment options, such as when they're driving.
Parent
Re: (Score:3, Insightful)
Try almost anyplace between the Mississippi river and California.
Re:Umm... what other Satellite Radio is there? (Score:5, Informative)
Your choices are:
1. Pay service like XM / Sirius
2. "Free" radio (and all the commercials that come with it)
3. iPods / MP3s / podCasts
They are all in direct competition for people's ears as they commute.
Parent
Re: (Score:3)
The "airwaves" are supposed to be public/free, and are licensed by the FCC. Satellite is not under FCC's jurisdiction as it goes beyond the public spectrum. It was purely a lobbyist's game that held this up for so long.
Interesting how Murdoch can take over the WSJ with all the holdings in news media (pr
Re:Umm... what other Satellite Radio is there? (Score:5, Insightful)
XM/Sirius is a pay service. They offer music, news, talk shows, etc.
AM/FM radio is free. They offer music, news, talk shows, etc.
iPods can be used to listen to music, news (podcasts, etc), talk shows, etc. (also for free)
New emerging technologies like wimax may offer alternative ways of streaming music, news, talk shows, etc.
This is basically what the DoJ ultimately decided. There are enough alternatives for content delivery that a merger of these two wouldn't create a monopoly in the economic sense. True they may be the only company offering services by satellite but they certainly couldn't jack up the prices without customers leaving for perfectly viable alternatives like terrestrial radio, iPods, etc.
Parent
Re:Umm... what other Satellite Radio is there? (Score:5, Insightful)
Satellite radio's real competition is terrestrial radio (analog and HD) along with MP3 players. That's who they have to compete with, if people don't want to pay for their service they don't have to, there are other places to go.
Parent
Re: (Score:3, Insightful)
Re:Umm... what other Satellite Radio is there? (Score:5, Insightful)
I (and millions of others just like me) listen to satellite radio all the time (I listen to it all day in my office -- listening to it right now via an XM Radio gadget in Vista). I take a 4.5 hour trip to Omaha, NE at *least* once a month, and other shorter (but still hour plus trips) between those. Hell, I even listen to the Sirius stations while I'm at home through my DishNetwork service (MAN I wish they had XM instead of DirecTV -- the Sirius programming *sucks* compared to XM in my opinion) hooked up to my HT setup.
I *hate* commercial radio. I *loath* listening to commercials for seemingly half of an hour. I hate it so much that I barely watch TV live (I record virtually everything). XM has been *awesome* for me. I am not alone.
Just because *YOU* don't subscribe to it, and thusly think it's unneeded, does not make it so. It *is* a needed service. I absolutely *refuse* to listen to normal radio after having had my XM service for several years now.
As it is right now, if the merged company decides to adopt the Sirius broadcast hardware, I'll be very upset. It does not sound as nice as XM's does (Sirius just doesn't provide as much bandwidth to their music channels as XM does and this is *especially* noticeable on their internet stream).
Parent