Satellite Radio: The Songs Might Not Repeat, But The Merger Rumors Do

from the play-it-again-mel dept

Mon, Nov 27th 2006 3:47pm — Carlo Longino

Sirius CEO Mel Karmazin has again mentioned the possibility of a merger between his company and rival XM, adding that he doesn't think regulatory issues would be a problem given the popularity of devices like iPods -- showing a new understanding that the two satellite radio companies face more competitors than each other. The idea that the two companies could be better off as one has been floated before, but it's hard to see just how it would help. It seems likely that the companies' biggest obstacle at this point isn't fending off competition from one another, but growing the overall satellite radio market and making it more viable. Certainly a merger would allow XM and Sirius to cut operating costs by eliminating redundancies, but the cost of operating and maintaining satellites is quite an albatross for the companies to bear. Like other satellite ventures, they may find eventually declaring bankruptcy and letting somebody start over without the huge initial capital costs.

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Anonymous Coward, 27 Nov 2006 @ 4:29pm

"Like other satellite ventures, they may find eventually declaring bankruptcy and letting somebody start over without the huge initial capital costs."

May find that this does what?
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SPR, 27 Nov 2006 @ 4:41pm

Satellite Radio
It makes perfect sense for them to merge. With the satellites having a life expectancy of 20 years or more they have already absorbed that cost, and being prepared for the next generation is just a part of doing business.
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Davis Freeberg, 27 Nov 2006 @ 4:50pm

It'll Take A Cold Day On Mars
There's no way a merger between Sirius and XM will ever happen. They have exclusive licenses to those satellites. The FTC would never allow it no matter what. This is just Mel being smart and trying to bump up his share price. A year from now he'll still be talking about this.
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misanthropic humanist, 27 Nov 2006 @ 5:14pm

a rose by any name at all
The very concept of satellite radio is artificial. Try to think in general technological terms. What is "satellite radio"?

There are 4 entities that enjoy the same function as in every other configuration, present and historical.

1) A source or broadcaster
2) A destination or listener
3) A medium of transmission
4) A receiveng device

There is nothing besides a particular comms protocol and licencing terms agreed by monopolistic actors thrashed out in smoke filled back-rooms that makes DAB or digital satellite radio anything other than a term of reference. For example, what really distinguishes it from "internet radio" received over a satelite? Nothing, that's all it is.

To understand this is to understand "convergence". To fail to get it is to make the mistake that the satellite radio marketeers have made, that ordinary people don't undersatnd or care about this nuance of protocol and licencing. They just want their music. On their phone, or on their laptop or other mobile device. They couldn't give a shit for a specific new product called "digital radio" in an age where they are besieged by dozens of competeing "Wi-Fi", "3G", "satelite broadband" vectors. It means nothing to ordinary folk.

I think DAB radio has missed its window of opportunity. No doubt the satellites can be retasked to recover the investment through other services, but if I was in "satellite radio" right now I would be thinking about throwing in the towel and moving on to something with a convergent future.
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Stu, 27 Nov 2006 @ 6:01pm

Who's going to pay for the compatability fixes for the people who bought XM receivers, and can't receive broadcasts from Sirius - and vice versa? They may not be upgradeable at all.

Satisfied users have no reason to pay.

Unsatisfied users won't pay.

New customers would get sets compatible with both systems, but won't be plentiful enough to support the merged business by themselves.

If XM and Sirius thought their business model was just like cable TV, they were sadly mistaken. Any TV set can receive cable with the addition of a very cheap box, that didn't even have to be bought. The monthly rental is practically invisible.

The options for mobile listening are many and growing fast.

The question is how long will it take before these companies fold - or change dramatically.
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fuddco, 28 Nov 2006 @ 9:36am

Re:
As a truck driver sat. radio is great! I can not ever go back to regular radio. I am part of a niche market however and with HD radio on the horizon "regular" people will go for that and sat. radio will go bankrupt/merge and offer their service to the transportation industry along with renting out bandwith to other compaines.
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Dan, 7 Dec 2006 @ 4:09pm

Repeats
I don't know about XM, however I can assure you that Sirius repeats their music, over and over and over and over and over and over.
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Lawrence, 26 Feb 2008 @ 12:08pm

Merger between Sirius and XM Radio
Interesting article about the merger between Sirius and XM radio because it would enhance the programming of satellite radio.
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Lawrence, 26 Feb 2008 @ 12:31pm

Merging Sirius & XM radio
Interesting comments about XM radio and Sirius merging because it will offer more satellite radio programming.
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