XM And SIRIUS Radio Merging

lenny6998 writes to tell us Yahoo! News is reporting that XM and Sirius Radio, the only two major players in the relatively new market of subscription satellite radio have announced a merger. "The two companies said in a statement that Mel Karmazin, the CEO of Sirius, would become chief executive of the new company while Gary Parsons, the chairman of XM, would remain in that role."

Egos

A more interesting merger than XM and SIRIUS, is really now Howard Stern and Opie & Anthony being on the same network.

Can one satellite network handle two (well three) giant egos.

Let's find out.

Re:Egos

Well, it didn't work so well when one terrestrial company tried to contain the three of them. WNEW had them all at once, and O&A were treated as the little stepbrothers who were slapped with gag orders and so on regarding talking about Howard. I foresee tension in the Force.

On another note, how will this work hardware-wise? Can they in fact offer one united channel selection over any current hardware? Will they continue to offer two separate "branded" offerings that each go to the proprietary radios until new hardware can be rolled out?

Didn't the FCC already say no?

We already covered the FCC saying no. http://science.slashdot.org/article.pl?sid=07/01/2 2/2237249 [slashdot.org]

What does "no" really mean?

We already covered the FCC saying no. http://science.slashdot.org/article.pl?sid=07/01/2 [slashdot.org] 2/2237249

I was wondering about that too. They either are so desperate for a merger that they'll take their chances with the FCC, or they've already talked with Martin and convinced him that it won't be anticompetitive.

Who knows, they may succeed in framing the competition issue as one applying to the streamed audio market, which encompasses radio, Internet radio, and sat radio. When discussing broadband, the FCC frequently defines the market rather broadly, incorporating dish access into the discussion, as if it is a serious market participant. Given their generally broad interpretation of communications markets, they (or at least Martin, Tate, and McDowell) may buy the argument.

Re:Didn't the FCC already say no?

I guess the check finally cleared.

Look up... waaaaay up

Methinks it's time to buy a telescope to watch them merge the satellite!

More Bandwidth?

As a huge O&A/Ron & Fez fan, I hope that the new company gets rid of some of the redundant stations (do we need 4 Top 20 stations?) and allocate more bandwidth to new stations. Maybe the Hideout boys and Ron & Fez get their own station while The Virus goes 24/7 O&A. Every time Ron and Fez mention "big things" for their show, ELo (Eric Logan) mentions the bandwidth issue.
Also, as a Big XII Alumni (Baylor,) hopefully they'll give us an option to start listening to Sirius content on XM. Oh, and there is that little league called the NFL.
I'm also curious to see how Opie and Anthony live working umnder the same umbrella as Howard Stern. Time will tell.

business model?

The thing everyone forgets is that monopoly isn't the problem: it's the abuse of monopoly to unfairly control a market.

XM and Sirius have so far both struggled for customers for several reasons, not the least of which being problems of customer awareness. Many people simply don't know - and won't learn without extensive research - which network would be better for them (in terms of content, quality and price). People are used to having one radio "network", expecting competitors to just be different channels. The idea of two separate networks with non-interoperable hardware just isn't what people want.

The question is how this new hybrid company (I love the AT&T joke...) will shape its new business model: if no other satellite companies emerge, will they offer channels 'for rent' to other content providers? Will they continue to own all channels? Etc.

A bit worried

As a Sirius subscriber, I'm a bit worried what a merger, if approved, might bring. They mention a more a la carte selection of channels. I read this as "tiered" pricing. If I had to guess, it sounds like it will be more modeled after the pay-for-tv pricing...i.e. you get a basic package for x dollars, a premium packages for y dollars, oh and you want the sports package? thats an extra z dollars. If it goes that route, I'm really going to have to reconsider if it is really worth it to me. Overall I've been happy with the Sirius service and choice of programming they've had. All for one price keeps it simple and affordable. Any changes to that, which are bound to happen in a merger like this, chances are the consumer loses.

Re:Guess it was just a matter of time...

Wonder when they will announce price increases?

Re:Guess it was just a matter of time...

Both services have commercial-free stations. With XM (my preferred service) the stations actually run by XM are commercial-free. There are plenty of other stations run by outside sources (News, Talk, some music) which have advertising in order to sync properly with their original broadcast source.

Re:Guess it was just a matter of time...

I love listening to Bill O'Reilly and hearing Viagra commercials every other break.

Re:Guess it was just a matter of time...

Since almost everyone who listens to music has a iPod, it meant that the benefits of satellite radio where lost when you could just plug in your iPod.

Really? My life does not revolve around finding new music and programming it into my iPod. I listen to Sat Radio so I don't have to do that. Plus, I get comedy, talk, and a lot of other programming that have no or less ads.

Not all of us are tied to our iPods by our nose.

Re:Oligopoly

Not really, as they will still face competition from traditional radio.

Re:

Not all monopolies [wikipedia.org] are bad. Some result in the best product, even considering price, for the consumer.

Re:Oligopoly

Exactly. Monopolies in and of themselves are not illegal. Antitrust laws make it unlawful to maintain or attempt to create a monopoly through tactics that either unreasonably exclude firms from the market, or significantly impair their ability to compete.

Radio is a coercive monopoly

Not all monopolies are bad. Some result in the best product, even considering price, for the consumer.

You linked the word "monopolies" to the Wikipedia article "Natural monopoly". I dispute that broadcasting has to be a natural monopoly. In fact, the structure of broadcast licensing in the United States ensures that music radio broadcasting is a coercive monopoly. This is due to the FCC's foot-dragging on low-power FM station licensing, bought and paid for in part by XM investor Clear Channel Communications and by National Public Radio.

Re:Radio is a coercive monopoly

Let's be fair. The reasons for those two organizations being against LPFM are very different. Clear Channel doesn't want competition. NPR realizes that the only place where first adjacents are likely to work reliably is in the lower power non-comm band, which means it will disproportionately hurt NPR and its member stations by causing harmful interference. You can't really fault them for that.

The real problem is that the FM band is way too narrow and FM stations use way too wide a band because pure frequency modulation of an analog signal is horribly inefficient. Digital radio hasn't taken off, despite having been proposed over ten years ago, largely due to the fact that there is no incentive for the big radio stations to encourage competition. Similarly, satellite radio hasn't taken off because the bit rate available results in suboptimal sound quality. It uses an omnidirectional antenna, which means that both Siruis and XM share a 50 MHz band, into which they've crammed three hundred digital radio stations.

Humorously, if that same chunk of spectrum were used for traditional FM, assuming you didn't allow second adjacents (and you really shouldn't allow them), you would only have fifty stations in that same chunk of spectrum. However, if you used an uncompressed 16-bit, 48kHz audio signal and modulated it with SSB, even if you couldn't do better than 1 bit per cycle, my quick back-of-a-napkin estimate is that you ought to be able to do it in a less than 120 kHz band (instead of 1 MHz for FM), or about 400 uncompressed channels in that same space---more channels than XM/Sirius, crammed into the same space, and without using lossy compression. So why the heck do we put up with the crap that Sirius/XM are giving us?

I think it boils down to this: people won't stop buying cars if their radio doesn't get any good stations. People will stop buying cell phones if they can't make calls. Therefore, the technology to cram lots of data into narrow bands makes into into cell phones, but not into your crappy car radio. If only the public would vote about radio quality with their dollars when purchasing cars.... Maybe then, we'd have some decent use of our broadcast spectrum. :-)

Re:Oligopoly

Not all monopolies [wikipedia.org] are bad. Some result in the best product, even considering price, for the consumer.

Bill Gates? Is that you?

Re:Satellite Radio is sooooo 2002.

Sorry, I use it ALL THE FREAKING TIME. Ask any trucker if they will part with their Satellite radio.

I drive close to 300 miles a week in the DFW area and local radio stations just don't have enough content to keep me intrested. Except for a few talk shows that I listen to, I need a sat radio to keep sane.

Yes, I do have an ipod loaded to the gills with music, but to be frank, without Satellite, I wouldn't have any NEW content to keep me awake.

Re:Satellite Radio is sooooo 2002.

Yeah I have to agree with your other replier. Thats great that you don't find a need for satellite radio (I mean it saves you money right?) but others of us have a good need for it. First off the truckers and professional drivers who are looking for consistent radio coverage no matter where they are driving. But ontop of that those of us looking for specific niche channels. Howard Stern fans, Opie and Anthony fans... general sports fans (for instance you can probably get all of your local sports team's games on your local radio, but what if you like a out-of-state team, or you like listening to any game possible). There are comedy channels (24/7 stand-up routines), news channels (CNN, CNN Headline, FoxNews, BBC WorldNews). Satellite really does offer up a lot of options for those not only interested in music.

In terms of music-only listening I think you make a great point, but satellite offers much more than just music.

Re:Satellite Radio is sooooo 2002.

There will continue to be a market for Sat radio as there continues to be a market for local broadcast radio. Your Tb of home-stored mp3's and movies won't tell you why people are meeting in town to discuss tonight's city council meeting, who died today, the status of rain, or what those fire engines were at 2 in the morning. They won't show you things you don't already know. Sure, you can get those things from the 'net in other ways, but many people like it this way, and the media is flexible to find new folks who like it in a slightly different way that it can accomodate.

Things don't die out as much as they thin out because of increased choices.

Re:Huh?

If you look at the combined content of the separate companies, there is a lot of duplication of effort. Each provider has some exclusive content, but the majority of content is duplicated. There is also 2x the infrastructure, 2x the personnel, 2x the billing systems, etc. Well, it may not be exactly 2x but you get the idea. By combining the two, you combine the customer base yet cut the overall operational budget. Thus the bottom line is improved. There could also conceivably be some added advantages of freeing up bandwidth. Or they could sell of the radio spectrum too.

Nothing will be decided probably until at least years end. Even if they get approval, it will take some time to also figure out the technical details as to who's equipment to go with, who gets laid off, etc. Actual savings probably won't be seen for several years, but if indeed they do merge, the cost of competition gets a lot cheaper in a hurry.

Re:Huh?

The majority of content is NOT duplicated. Sirius and XM sound NOTHING alike. Sirius channels sound like normal radio stations, but without commercials. XM channels sound like somebody took a random pile of CDs, shoved them in a changer, and hit the "shuffle" button.

They're about as equivalent as Tylenol, Ibuprofen, and Naproxen sodium. Yeah, they're technically all painkillers and reduce fever, but anyone who's ever had a headache or fever knows that they're definitely NOT all the same. Tylenol utterly sucks compared to the other two, but some people are forced to use it because they can't tolerate them. Ibuprofen rocks for headaches, but sucks for fevers (unless you enjoy having your fever come back every 4-6 hours). Naproxen sodium is a godsend for fevers (breaks once, stays that way), but a complete waste of time for headaches. The same is true of Sirius and XM. Both have slightly different audiences with different expectations -- all of whom are going to be FURIOUS if their network mutates into the other. Even slightly.

Talk to anyone who subscribes to either service. I guarantee that 99% of them will react to the news of a merger with absolute horror at the thought that ${their_network} will get turned into ${other_network}. I *guarantee* that if a merger happens and the music channels from one or the other get dropped to "streamline" and "eliminate redundancy", AT LEAST half of the losing service's carriers will leave in disgust. At the same time, the "winner" network will probably lose at least a quarter of its customers if it changes even slightly to be more like the loser's format was. Ultimately, we'll be stuck with one mediocre provider whose financial position is only slightly better than before, and now has hundreds of thousands of angry and pissed off former customers saying bad things about it and discouraging their friends from subscribing.

This is horrible news for the customers of BOTH services. I expect to see an outpouring of anger from customers of BOTH Sirius AND XM demanding that the FCC NOT allow a merged company to own both frequency bands in a desperate effort to derail the whole merger.

Re:Finally

Art Bell and Howard Stern together.

Art will introduce us to the shadow people, then Stern will ask them to show us their boobs.