Political Gamesmanship In XM-Sirius Merger Rolls On

from the the-fun-never-ends dept

Wed, Jul 25th 2007 7:44pm — Carlo Longino

While comments filed with the FCC in support of the merger of satellite radio companies XM and Sirius outnumber those opposing it by nearly a four to one margin, they're not seen by many people to carry the same influence as those arguing against the merger. For instance, more than 70 Congressmen have told the heads of the FCC, DOJ and FTC that they should block the merger, and as stock pundit Jim Cramer points out, this has little to do with anything other than legislators' self-interest, since they don't want to upset local broadcasters in their constituencies. He adds that since XM and Sirius are up against such powerful opposition, they've had to go for broke, by announcing pricing plans that, if the merger's approved, could slice their average per-subscriber revenue. The plans offer consumers the ability to choose channels on an a la carte basis -- a move that looks like it's designed to appeal to FCC Chairman Kevin Martin, for whom indecent programming is always an issue. At the outset of the merger announcement, Martin said that XM and Sirius would have to show that "consumers would clearly be better off with both more choice and affordable prices" before the FCC would approve the deal. These new plans would appear to deliver consumers more choices and control over the content they receive, and do so at lower prices. But it's still hard to see that being enough to overcome politicians' objections, fueled by the National Association of Broadcasters' clout.

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Filed Under: congress, doj, fcc, ftc, mergers, politics, satellite radio
Companies: nab, sirius, xm

10 Comments

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James Hartman, 25 Jul 2007 @ 8:35pm

XM/Sirius
The kicker on all of this is, just how much are folks expected to pay for what we're used to getting for "free" (free being in quotes, since you're really paying for airtime via the never ending commercials). Surprise, commercial-free isn't always a compelling reason to pay a monthly or yearly subscription fee, when there are so many alternatives. The target audience, people in cars, have too many other choices now (like mp3 players that last 8-10 hours or more) that are too customizable for broadcasters to keep up - and that includes terrestrial ones too.
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- Deano, 4 Oct 2007 @ 12:39am
  
  Re: XM/Sirius
  "Commercial-free" is not the point of satellite radio. XM and Sirius are for people who want to discover music (news & information) that they Don't Already Know. If all you want to do is program 8 hours of music you already know into your MP3 player --- then XM and Sirius were never meant for you anyway.
  And there is absolutely No Comparison between the music you get for free from terrestrial radio and what you get from XM and Sirius. It's a completely different world.The programming quality on most internet radio just doesn't measure up. And it's going to cost $16.99 a month to get everything on Both XM and Sirius. If you're a big music fan (meaning, still curious to discover more music), then $16.99 is a steal.
  Try it and Compare it to $40-$80 for a cable or satellite TV package of 200 or so channels.
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Anonymous Coward, 25 Jul 2007 @ 8:50pm

Clout
The correct spelling of clout is: bought politicians!

Otherwise what clout would they have?
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Alltair Hennesey, 25 Jul 2007 @ 11:50pm

Is that my Espresso machine ?
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j sie, 26 Jul 2007 @ 3:24am

come on
If I could actually select via an "a la carte" plan which channels I would pay for, I would be more than happy. My wife loves '80s rock/pop and I like '90s grunge and talk radio. If I could narrow down what I paid for I would be a happy camper!
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troub, 26 Jul 2007 @ 6:39am

*New* music is the benefit
I pay for XM, and the reason I do instead of listening to my own mp3s all the time is because satellite radio allows me to hear things I may not be exposed to elsewhere. From relatively obscure black metal to the newest independent 3-song EP to jazz and classical; I hit the "memory" button on the player for a list of things to buy later. My collection has diversified immensely, and new things go on the list almost every day (I have a 45-album backlog in my Emusic "Save for later" list).

Of course, I guess it seems like most people are still comfortable hearing the same songs over and over and over again all the time, the ONLY reason why "free" radio is still acceptable to people.
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Graham Crackers, 26 Jul 2007 @ 8:37am

A la Sham
I strongly suggest that you look at the details of the a la carte plan before you praise it. Once you do, you will see two things that emerge. For one, the technical incompatibility of the two systems becomes clear (even with a new radio, the most channels a Sirius subscriber can get from XM -- at a hefty premium -- is 11, of which there is almost no chance any will be sports or premium music). Two, the a la carte "deal" if taken to its logical extreme would substantially raise the cost for the average consumer. The "50" or "100" channel a la carte plans do not include premium programming like Howard Stern or play-by-play sports like the NFL. If you want those "super premium" channels you have to pay an extra $5 (for sports) and $6 (for Howard). So if you chose the 50 channels (you're losing a lot for the right to pick) and add say sports, you are already paying more than what you would pay for the whole of one service (for about 40 fewer music channels, no news, no traffic and weather, and no premium talk like Howard Stern or Oprah). Plus, you would have to buy a new radio. Where's the deal? No reasonable consumer would choose this package (which is not guaranteed should the merger be approved) over what each service offers independently already. And the real kick in the pants is for sports fans, which are almost certainly not going to get both baseball and football from one radio. This is nothing more than a political ploy and does nothing for the average customer (unless you like to get more for less).
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- Deanl, 4 Oct 2007 @ 12:55am
  
  Re: A la Sham
  I think you missed something. USA Today reported July 24th: "...for $16.99 per month.....subscribers will be able to access lineups from both companies through their existing radios."......"all of Sirius and XM's existing non-premium offerings.....about 300 channels total."
  
  So forget the a la carte stuff. You can't know which channels you're going to like unless you actually listen to them first. You don't judge a book by looking at the cover. If you pick only 25 or 50 channels based on their names, brief descriptions, or assumptions based on what your'e used to from terrestrial radio, then you are less likely to find enough programming that you like to justify the subscription cost. The packages just limit you. Anybody who wants to check out XM or Sirius should not be limiting themselves. Satellite radio is all about Widening Boundaries. If you want to stick with what you know, don't get XM or Sirius.
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Matrick, 26 Jul 2007 @ 2:19pm

interoperability
I agree with A la Sham. The interoperability is a huge issue. XM and Sirius agreed to make the a receiver workable for both subscriptions but have yet to do so. How much will it cost consumers? I'm working with the NAB and this a la carte business is only meant to swoon the FCC commissioners.

BTW, I listen to XM as well and I still hear the same songs over and over again.
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John Singer, 27 Jul 2007 @ 2:34am

Cramer Buys XMSR high and then sells low
Cramer waffled his way through XM Satellite Radio recommendations/sell calls and Sirius Satellite Radio recommendations almost a full year. at this site www.stockTagger.com
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