Satellite-Radio Merger Faces Some Sirius Hurdles

Feb 20th, 2007 // 5 Comments

volumepump.jpgThe proposed XM-Sirius merger was only announced yesterday, and it’s already drawing criticism from regulators and legislators, many of whom worry that the union would effectively create a satellite-radio monopoly (which may be why the FCC banned such a deal in 1997). And while it’s likely going to take more than a year to iron the deal out–the companies have set next March as a do-or-die deadline–there’s already speculation as to how the potential pairing could affect customers, according to the Wall Street Journal:

Consumers and their advocates are likely to worry that a combined company would mean higher prices for satellite-radio service. Both companies now charge $12.95 a month. But company executives say market forces would limit the possibility of higher prices. “We are competing with companies that give away their product for free,” said Mr. Karmazin, alluding to conventional over-the-air radio.

Satellite-radio customers will still be able to use their existing satellite radios for the foreseeable future, but to take advantage of a combined service, they probably would need to upgrade to a newer radio. Currently, Sirius and XM run on separate, incompatible systems, although a team of engineers from both companies has been working on a radio that could pull in both signals…

The companies could also eliminate duplicative services. For example, XM features a Christian-music-themed channel called “The Message,” while Sirius has its own Christian pop channel dubbed “Spirit.” By Mr. Karmazin’s reckoning, the two companies could eliminate such overlap and concentrate on unique shows and new technology to deliver it. “There’s going to be more consumer choice,” Mr. Karmazin said.

Indeed, a cursory glance at both XM and Sirius’ line-ups reveals plenty of overlap; if the deal were to go through, sketchy estimates indicate that the combined classic-rock channels would yield more than 2,312 airings of “Blinded By The Light” per hour. That said, we do look forward to seeing what happens when the companies on-air talents are forced to share quarters, just to see what happens when Ludacris makes a play for Deepak Chopra’s coffee mug.

Sirius and XM Agree to Merge, Despite Hurdles [WSJ]

  1. PengIn

    Wait, Pump Up The Volume got two thumbs up?

  2. binaryan

    Anyone who works for either company care to comment on whether the NYC-based Sirius or DC-based XM would win out in terms of being the home base? A guy at XM told me DC would win as XM owns their satellites, while Sirius simply leases. I’d like to see the other side of the coin.

  3. DavidWatts

    Well, Sirius does have impressively Death Star-ish multilevel studios in Manhattan: endless and spotless white corridors with doors every 3 feet (how big can the rooms be?). First time I came in, I thought “Do they really make enough money for this insane place?” Apparently not.

  4. Hamm Beerger

    Less choice is more. Black is white, up is down, the Captain is Tennille.

  5. Mick Kraut

    How many channels playing “classic alternative rock” does the world need…XM has at least 3 of them that I have found thus far…

    THe only upside to this deal is the possibilty of a steel cage death match between O&A and Stern…could be a hoot…

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