Justice Dept. Approves XM/Sirius Merger

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."'"

I support this

[bobetov]

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.

people don't know what a monopoly is

[nawcom]

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 on gasoline in order to live (transportation) and I've only seen price go up. There are obviously other factors that play a role in gas costs; but when you look at that from a simple thinker's viewpoint, it shows that companies are merging all the time.

My opinion is also, that the NAB got so involved in stopping the merger because they don't want to deal with competition with satellite radio as a whole; they were happy that the 2 companies were fighting over subscribers in order to survive financially. Now they might actually have to compete with an alternative service.

I was a wee little shitling when cable television came into play, but I thought I heard something similar to this may had come up. Someone correct me if I got my facts wrong.

I know one of the major reasons they want to merge is to help take care of the billions they have loaned i n order to get this service up and running, and at the same time lower the cost-per-month for subscribers.

Long overdue

[DaveInAustin]

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).

Maybe Sirius' audio offerings wont suck now...

[PortHaven]

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.

Re:Umm... what other Satellite Radio is there?

[Scaba]

...and has no coverage in the US and Canada, which is where Sirius and XM operate.

This is a good thing for consumers

[Gizzmonic]

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.

compatibility?

[greenrom]

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.

Re:Umm... what other Satellite Radio is there?

[martin_b1sh0p]

I have XM and while it's not for everyone, I love it. I have a daily 50 mile (round) trip to work M-F. It's about an hour a day on the road. If you hate commercials as much as I do then it's totally worth it. I could listen to CDs but I get tired quickly of the same songs over and over. On top of that, I stream XM through my 360 to the main stereo at home...great for parties, like when we had the fam over this Easter weekend.

I don't beleive that's accurate

[hassanchop]

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 one company could never own both satellite radio licenses.

They are restricted from having both licenses. The agreement does not, as you claim, say that "no merger would be tolerated."

Re:Umm... what other Satellite Radio is there?

[JesseMcDonald]

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 reduce choice as the percentage market share is too tiny.

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 part competing against CDs, iTMS, Google News, etc.? On the other hand, why shouldn't their combined grasp of the satellite radio market be relevant? The whole concept of antitrust is far too subjective; it all depends on how narrowly one defines the market. By some definitions everyone has a monopoly; by others no one does.

Even if one could come up with some ethical justification for interfering in this merger -- which I have yet to see -- the law can hardly be considered objective, or even consistently applied.

Neither company has

[Paralizer]

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.

We do have alternatives

[agwis]

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.

Re:Maybe Sirius' audio offerings wont suck now...

[scottgfx]

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 people I see in traffic with a bumper sticker of a logo I've designed and ask them why they felt so compelled to attach it to their vehicle. I've not had that compulsion, but it somehow cool to know that someone liked it enough to ruin the paint on their car to display it.