XM And Sirius Have The Urge To Merge
There's been speculation about this for months, and now it's just one legal hurdle away: XM and Sirius announced today their intention to merge into one colossal entity, billed as a "merger of equals." Via Reuters:
Under the terms of the deal, XM stockholders will get 4.6 shares in Sirius for each XM share held. The merger would create a company with an enterprise value of $13 billion, including $1.6 billion in net debt.The FCC still needs to give the deal its blessing; at present, satellite licenses prohibit one entity from having a monopoly by owning 'em all, but FCC Chairman Martin has gone on record, saying that rule is "open to change." Now all of you lucky satelliters can get your fix of Oprah, Howard, MLB, and NFL all in the same place for the very same price. (You're so excited.) Financially speaking, there were no alternatives; both companies had spent each other into untenable positions, acquiring celebrity talent and launching campaigns competing for the very same subscriber base they may now share. Would have been smarter to figure this shit out a while back, eh guys?...
Veteran media executive Mel Karmazin, currently Sirius CEO, will be CEO of the combined company, and Gary Parsons, now chairman of XM, will hold the same position in the new company. It said Hugh Panero, XM CEO, will continue in his current role until the merger closes.
But whatever, this is where they are, bound by their budget books to come together, hoping it'll save 'em from insolvency. But most importantly for you, the subscriber: There's no more competition! Instead of two companies desperate to lure your subscribing dollars via superior content, the monolithic beast will be able to frame their product simply, in a can't lose scenario: "It's us or terrestrial." Where XM and Sirius could have pushed each other to develop interesting new programs and a keep a commitment to good, quality playlists, they'll now be able to rest easily on the medium's inherent trump card: commercial-free music. We don't subscribe (though we used to have Sirius); we're good with our iPods and Peel. But the loss of another potential filter for new music is a bummer. Granted, the merger may be financially necessary; but does anyone actually think it'll create a better product?
Posted at 6:06 PM
your headline is balls...what are you twelve?
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Besides the name brands (Oprah, MLB), XM doesn't bring much to the merger...their original programming is somewhat lacking. I hope it doesn't water down Sirius.
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Well said...Sirius has become a great source for new music and I think it's mostly due to XM's competition.
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no way. XM is programmed way better. They have a lot more variety. The playlist on Sirius' indie/college radio stations sounds like it was created by a robot in 2003.
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One of the big questions will be whether they will consolidate their music content or if they will continue to provide multiple options. Having the option of listening to Left of the Dail or XMU or The Verge (for example) would be ideal.
Also, since Sirius and XM are not compatible, what about the millions of cars with with one of the services installed. Just push the new service across both platforms?
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Admittedly, I haven't listened to XM for probably about a year, but the programming I heard was like the "all music" channels you get on cable...song after song, no real feel for continutity or groove between songs, no DJs. Which you would think would be cool, but like the all music channels on cable, isn't. The lack of DJ really bothers me for some reason; without one, it's just mindless. Chuck: I'm guessing they'll just re-broadcast the redundant programming across two platforms until the "new" receivers come out. But that had better not render my old receiver useless.
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First, if they merge, there will be no more competition in the satellite radio market. With one firm, there is little reason why a company would want to provide a better product. Financially necessary? What the hell is that? They want to merge into a monopoly, make more profit, and say "to hell" with the consumer.
Here is an illustration: Do you live in a city with one cable company? How are prices? Do you like them? Do you think the service could be better? Of course, you do. However, the municipality has given your cable company the sole franchise for cable service. With the goverment backing them, why would they want to change or provide a better service?
Basically, competition tends to drive prices down and increase quality.
I'll await the FCC's ruling on this horizontal merger.
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Of course XM/Sirius will have competition. It's called Internet Radio and it is (usually) free. Unless you specifically want to listen to Howard there are probably 1,000's of IR streams that are programmed as well (or better) than satellite. Satellite is more mobile for now, but that is changing too. I regularly listen to IR on my Treo on the train & walking around town.
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I have Sirius but have heard that XM is better. But how do I get XM over my Sirius radios? And will it be years before they offer merged playlists?
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i agree with jim: don't constrain "xirius" competition to satellite radio providers. satellite radio competes with "free" radio, the internet, poratble music players, etc. much the way that cable competes with other cable providers as well as "free" tv, the phone companies, satellite tv, the internet, portable video players, etc. and if there's money to be made in satellite radio (the jury's still out), i think you'll see new providers.
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Like I said, I'm going to await the FCC's ruling.
The company heads will have to define what their market is. Market definition is key in this merger cases. XM/Sirius will want to define their market as broad as possible. Probably a market that includes street musicians...
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My concern is that each company has a limit on the number of stations it can transmit (that's why anytime a new station comes on, a new one die or is merged into another). Unless the new company gets to have double bandwith, this is going to mean much less variety.
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I just hope we retain Left of Center, or at least its programming philosophy. Every time I've listened to XMU, every song is at least six months to a year old.
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This merger will be good for the consumer. Mel Karmazin has stated that the merged company would accept price restrictions when approved. I enjoy satellite radio because it gives the freedom to listen to the same program regardless of where I am. I use XM for the sports content, so I enjoy the freedom to listen to S.F. Giants games nightly even though I am on the east coast. My only alternative would be to pay MLB.com $14.95 monthly to be tied down to my computer to listen to games. Now with the merged company, I can listen to NFL, NBA, and MLB all on the same radio.
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