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Justice Dept. Approves XM/Sirius Merger 232

Posted by Zonk
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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Justice Dept. Approves XM/Sirius Merger

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  • by Culture20 (968837) on Tuesday March 25, 2008 @10:09AM (#22856678)
    "We just simply found that the evidence didn't indicate that it would harm consumers."
    ...since Satellite radio has so few consumers...
    • Since competition only really benefits customers when the competing companies can force each other to become more efficient, and the 'satellite' radio infrastructure is fixed (satellites+ground based repeaters) - then prices can only go *so* low.

      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
    • by Enry (630)
      They're close to about 20M listeners between them.

      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
  • That's great. I wonder how long it will be before the XM receiver in my car becomes worthless? I love the reasoning given by the government here. You'd swear that there was no investigation done at all, but of course that can't be true.
    • Re:Stupid (Score:5, Insightful)

      by Iphtashu Fitz (263795) on Tuesday March 25, 2008 @10:17AM (#22856800)
      It won't become worthless. It'll likely become more valuable. If the merger completes then in the short term you'll likely see content being shared between the two services. Right now the various sports franchises have pitted the two satellite providers against each other for lucrative exclusive deals. You can hear NFL on Sirius only, MLB on XM only, etc. When the merger completes you'll likely be able to hear baseball on Sirius and football on XM. Other exclusive content, like Oprah on XM, Howard Stern on Sirius, etc. will also likely be made on the other service. So the bottom line is that you'll probably have more content available to you.

      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.
    • How could it be worthless?

      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
  • by Iphtashu Fitz (263795) on Tuesday March 25, 2008 @10:13AM (#22856740)
    XM & Sirius asked the justice department for approval over a year ago. Why on earth did it take them so long to approve this? Here are a few other mergers that the DoJ approved in under a year: Exxon/Mobil, AT&T/Bellsouth, Chevron/Texaco, Sprint/Nextel, Whirlpool/Maytag, etc.

    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?
    • by Thagg (9904) <thadbeier@gmail.com> on Tuesday March 25, 2008 @10:21AM (#22856846) Journal
      The reason that this took so long to approve is that it is illegal on its face. The agreement that opened up the satellite spectrum for XM and Sirius specified unambiguously that no merger would be tolerated.

      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.
      • by will_die (586523)
        It was not an agreement it was a condition of the license and to waive that has not been decided upon. That is up to the FCC to decide if the condition of the license will be waived. The wording of the condition is that single company cannot hold both licenses for satelitte broadcasting. Since there is no one really wanting the extra license there is probably not going to be much problem on this. They will probably be forced to merge thier service, over time, and free up the other license.
        But anyways w
      • The agreement that opened up the satellite spectrum for XM and Sirius specified unambiguously that no merger would be tolerated.

        That is not accurate.

        http://en.wikipedia.org/wiki/XM/Sirius_merger [wikipedia.org]

        The proposed merger faces scrutiny by the Federal Communications Commission, Securities and Exchange Commission, Department of Justice and possibly other federal organizations. The FCC also poses a major hurdle: when the satellite radio service was first created by the FCC, one of the licensing conditions was that o

    • by bugnuts (94678) on Tuesday March 25, 2008 @11:18AM (#22857706) Journal

      XM & Sirius asked the justice department for approval over a year ago. Why on earth did it take them so long to approve this?
      The FCC had to make sure the offer was Sirius.
  • HDDVD & Blu-Ray = XM and Sirius. DVDs = Terrestrial radio.

    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)

    by bobetov (448774) on Tuesday March 25, 2008 @10:25AM (#22856898) Homepage
    I'm a Sirius subscriber, and in almost all cases, I find these kind of mergers to be bad for people like myself. But in this case, I think that the cost of market confusion, particularly with buying new cars, is more a burden than any perceived loss of choice. I find it intensely annoying to have one car Sirius capable, and the other XM capable, and now way of having both without $600 in after-market installation.

    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.
    • Re: (Score:2, Insightful)

      by TheHorse13 (908512)
      I'm not sure what you listen to on Sirius but their main draw, the Howard Stern Show, started advertising 2 days into their broadcast. You can bet that since it is tolerated now, they will slowly creep in more across their line-up. I just purchased a new car that came with XM free for a month. I turned on the comedy channel and what did I find? Yep. Ads. You can be sure that all of us will be screwed (again) just like when cable TV promised commercial free viewing and movies right from the silver screen (ho
      • by bobetov (448774)
        No one I know listens to Howard Stern, on Sirius or otherwise.

        I listen to Coffee House (acoustic stuff), Chill (ambient/techno), Hits 1 and the Pulse.

        I listen to these *all* the *time*. Because there's no ads. It's great.

        I know the talk stuff has ads. I couldn't care less. But touch my ears with a Toyota sale-abration on the music stations, and I instantly unsubscribe.
        • by jhylkema (545853)

          No one I know listens to Howard Stern, on Sirius or otherwise.

          I listen to Coffee House (acoustic stuff), Chill (ambient/techno), Hits 1 and the Pulse.

          I listen to these *all* the *time*. Because there's no ads. It's great.

          I know the talk stuff has ads. I couldn't care less. But touch my ears with a Toyota sale-abration on the music stations, and I instantly unsubscribe.

          Exactly. Don't forget, one of Sirius/XM's big selling points is commercial-free music. That doesn't mean commercial-free dick jokes on Howa

  • by scubamage (727538)
    This really doesn't hurt consumers. If anything it will help grow satellite radio. Right now consumers have to choose between whether they want to listen to Opie and Anthony, or Howard Stern. Choose between the one that has decent electronica, or the one that has a channel for each decade. With the merger, consumers win... so long as Xirius (I think thats a cool new name) doesn't decide to jack up their prices.
    • by plague3106 (71849)
      O&A fans aren't likely to listen to Stern, and visa versa. Also, Stern is a huge drain in the finances of Sirrus; he's way overpaid, and no one cares anymore what he does. As far as electroncia goes, I like what XM has, and I know XM has decade channels.. I assume Sirrus has decade channels as well, although I know they have other crap. My gym has Sirrius, and i never liked the channels they play.. and their DJs talk too much.
  • I can't believe people look at this as a monopoly. I always ask people who state their opinion against the merge, "So which satellite radio service to you use?" "Oh, I'm not gonna pay for radio."

    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)

    by DaveInAustin (549058) on Tuesday March 25, 2008 @10:28AM (#22856936) Homepage
    I say this as an early XM subscriber from 2001, but these companies will have a hard time breaking even, even as a single company. There is too much competition from free radio and mp3 players now. hd-radio is the digital version of free radio and that will push satellite radio further into the niche category. HD-radio will effectively triple the number of public stations available in most urban areas. Even clear channel will have a hard time making all the new commercial radio channels bland. I realized the XM's real problem as I was driving in my car, listening to xm radio, not through an xm radio, but through its internet feed through my broadband card. Today, I can almost get my pick of thousands of stations today (many with better sound quality than XM) while I'm mobile. Think about what's going to happen when Verizon and AT&T get the new frequencies they just purchased in the recent auction [slashdot.org]. I know that most folks despise free commercial radio (outside of the public stations), and for people in remote areas, XM/Sirius might be your only option, but rest assured, things will get better. And this merger will help. For one, they might be able to reduce the overlapping stations and use the bandwidth for more alternatives (like bringing back edgier stations like ngoma and xm-unsigned and music lab).
  • I haven't paid any attention to the business side of satellite radio. Was either one of the companies in financial trouble? If they were both profitable, why allow a merger?
    • by plague3106 (71849)
      They're both struggling, Sirrus more, because it has WAY more debt. I think that's why it wants to "buy" XM... for the assets, so the debt doesn't look as bad. 500M for Stern, plus they have to pay to broadcast NFL (who listens to football on the radio anyway?) & NBA.
      • by rearden (304396)
        Ok, I have to call you on this one a bit. To point they paid Stern in stock, so that is not debt carried on their books. While it is true they have more debt, but a big part of that has to do with the way XM was financed. Check their history they have gone bankrupt or been part of bankrupt groups on a number of occasions- that let them get rid of some of their debt. Also, XM has/had Honda and GM backing them so they were able to get/ acquire listeners easier. When my dad purchased his Yukon it came with XM
  • by PortHaven (242123) on Tuesday March 25, 2008 @10:36AM (#22857034) Homepage
    We had Sirius service for a year. My wife tends toward country, and she hated every station they had. Now, I am not into country but even I could tell that all of the country stations on Sirius were for older crowds and did not compare to what I hear on the various radio stations.

    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.
    • Maybe this merger will improve the quality of their programming.

      I'm praying that they don't improve it. Right now I get ClearChannel-free programming in the formats I like. If they fix that by replacing that content with whatever Clear Channel deems popular in a category, I'll cancel that same day.

      Fortunately Sirius seems fairly responsive to customers. I wrote them a complaint letter when I heard them censor an F-bomb out of a song. It's not that I necessarily want a stream of profanity out of my radio, but that I'm an adult and paying extra to hear the whole s

      • I actually heard something like that this morning on the way to work; they censored out the word bullshit in a song. At first, I was equally offended, but then I realized the reasoning behind it. There are plenty of stations on the service that are uncensored, Alt-Nation for example let's their users record 'Fuck You' messages to people and then plays them on the air, but the service needs to have some radio stations that are safe to play in commercial environments such as office buildings or restaurants.
        • I was listening to "Alt Nation" when I heard the censored song.

          I don't mind having "clean" channels for all the reasons you mentioned (and others, such as having something the kids can listen to in the car that's more tolerable than Cheetah Girls). I just want Sirius to label and/or market those channels as such.

    • Stupid, they totally don't get their own markets.
      I'm curious, why do you believe that you are their core market? Out of all the music styles pervade through this country, why would you assume that the majority of the people in America only listen to Country and Christian Rock?

      I think it's time you got out a little more.
    • Re: (Score:3, Interesting)

      by scottgfx (68236)
      I own Sirius stock, so I'm hoping the deal goes through; but I also work for a company that owns or operates several radio stations. I still don't understand the mindset that goes into programming stations. In the entire market where I live, there is not one station that I enjoy listening to. While some people make an argument for putting FM tuners in DAPs, I haven't missed them in the ones I've owned.

      My work in radio has mostly involved logos and branding for radio stations. I sometimes want to stop the pe
  • by jpellino (202698) on Tuesday March 25, 2008 @10:47AM (#22857170)
    You're dreamy. Now there's 50% less competition for those of us who always aspired to starting up a satellite radio service.

  • by Gizzmonic (412910) on Tuesday March 25, 2008 @10:48AM (#22857212) Homepage Journal
    Anything that staves off radio domination by Clear Channel is a good thing.

    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.
  • by mknewman (557587) * on Tuesday March 25, 2008 @10:58AM (#22857384)
    From XM's web site: "The pending merger is still subject to approval of the Federal Communications Commission."
  • Perhaps someone with expertise in antitrust could enlighten me as to a silly question:

    About five years ago, satellite radio was unheard of, or nearly so. For a time, there was only one company offering service. No one at that time would complain of this being anti-competitive or a monopoly, that there was only one choice in the market.

    But now, after two companies decide to merge, suddenly threatens to become anticompetitive and needs government approval. Why is the first case ok, but the second ca
  • by denverradiosucks (653647) on Tuesday March 25, 2008 @11:00AM (#22857408) Homepage
    I know not everyone will agree with me on this, and they are entitled to stick it to me after they read this post. That being said, I have been an XM subscriber for a year now and am excited about this.

    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.
  • Even if XM and Sirius combine, there is little incentive for the resulting company to raise prices. Neither company has ever made one thin dime in profit, and the companies, either combined or individually, are still quite some distance from doing so. Even with a merger, the company will still be in no position to risk pissing off a sizable portion of its customer base.
  • compatibility? (Score:4, Interesting)

    by greenrom (576281) on Tuesday March 25, 2008 @11:17AM (#22857690)
    Anybody know if the two systems can be made compatible without swapping receivers? I have XM built in to my car. I'd hate to have it stop working after the merger.
  • Neither company has (Score:5, Interesting)

    by Paralizer (792155) on Tuesday March 25, 2008 @12:04PM (#22858488) Homepage
    ever reported a quarterly profit. The two companies have always lost money. If they don't merge it is likely at least one of them is going to go bankrupt and the other would probably just take over some of their previous customers anyway. I don't see why everyone is bitching, them merging is a good for both them and their customers.

    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.
  • As long time Sirius subscriber I can't wait for the merger (FCC will try to stop it I suspect). I have XM on DirecTV and Sirius in the car I'm looking forward to a new radio that'll pick up both.
  • by agwis (690872) on Tuesday March 25, 2008 @03:44PM (#22861736)
    I have spent the last 15 years off and on travelling heavily throughout Canada and the USA by road, and at first satellite was a god send. I originally was an XM subscriber but eventually switched to Sirius. At first I really enjoyed XM, but the competition between the 2 companies for exclusive sports broadcast rights caused turmoil for us die hard sports fans, and you either ended up buying a unit for both companies and subscriptions to both, or you switched back and forth.

    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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