More thoughts on the proposed XM-Sirius merger
Time for another round-up of commentary and thoughts on the proposed XM-Sirius merger.
There’s much excitement over at OrbitCast over SEC filings by CBS and other owners of terrestrial radio stations that claim that they do in fact compete directly against XM and Sirius, thus supposedly stripping them of the ability to claim that an XM-Sirius merger would create a monopoly. I don’t think there’s much to that argument: Broadcasters can make whatever competitve-market claims they want, but other actors, for example the FCC, might find different definitions more relevant. Besides, all those broadcast radio owners have their own oligopoly-related reasons to argue, when it suits them, that they compete in a world of infinite competition. Those filings should matter little to the FCC in this case.
We continue to follow the reactions to the proposed merger by Sirius and XM subscribers. XM subscriber Brad Drell ponders what a merger could mean for him and his family, and he also looks at the strengths and weaknesses of XM and Sirius as consumer products. He’s taken aback buy the pricey equipment the latter hawks:
No one should have to pay that much for hardware for a subscription service as I’ve seen on the Sirius website. I might have bought my first satellite receiver if I had to pay Sirius’ prices. But I’ve bought three more since then - one for my wife, one for my daughter Sarah, and one for my mother in law, and I pay the additional radio subcriptions on those. Had I had to pay $120-$200 for just the radio, I wouldn’t have bought it. I bought mine for $150 (actually, my mother in law bought it as a Christmas present) that included car, home, and portable gear, a car radio for Carrie for $30, a portable/home radio for Sarah for $90, and a home/car (not portable) radio for Ella for $90. While Sirius has a couple of cheap car radios, the only one cheaper than Carrie’s has a tiny green light on black background screen. The closest one as far as the screen is $50 but has only 10 presets. For a radio similar to mine or Sarah’s, you are talking $349. WOW! It suffices to say Sarah would have gotten just a plain old MP3 player, and no one would have gotten the sattelite radio subscription fee. Sarah wouldn’t have the Radio Disney she wanted, but there would be no way for me to give that to her in a portable fashion at a price I could afford.
Washington Post business columnist Steven Pearlstein joins the seemingly growing ranks of those opposed to the merger. He lists many reasons for why the merger is a bad idea, one of which is this:
In fact, XM and Sirius really offer two services. One is music programming. The other is the delivery of that programming via satellites and ground stations. Most of their customers buy the package, but not all. I get limited XM service as part of my DirecTV subscription, and in the future one can imagine cellphone operators and cable companies and maybe even old-fashioned radio stations contracting with XM or Sirius for programming. A merger would reduce their choice of suppliers.
But his primary fear is that the merger, if allowed, will set off another wave of consolidation in the radio industry.
“Let’em merge” says Dale Oesterle at Business Law Prof Blog.
AMTC, which sells the SiriusBusiness service for retail stores and restaurants, has declined to comment on the proposed merger.
I called the National Association of Broadcasters hypocritical a couple of days ago for making hay of shock-jock Howard Stern being the “poster child” of satellite radio. The Miami Herald’s Glenn Garvin expands on that theme today. The gist of it is this:
If you’re wondering how many times the NAB labeled Stern’s show offensive when it aired on broadcast radio, here’s a clue: The answer lies somewhere between zero and zip, nothing and nada.
The only time NAB ever mentions broadcast shock jocks is when it complains about FCC fines for their behavior. Back in 1991, when classical-music broadcaster Woody Tanger — who owned radio stations in Miami, Philadelphia and Detroit — urged his colleagues to denounce Stern, NAB president Eddie Fritts stonily replied that the group was not an “industry programming critic.”
Industry programming critic? No. Self-serving promoter? Yes! NAB is free to say what it wants, and we’re free to ignore it as we choose.
Finally, Digital Media Wire provides “6 Audio Entertainment Sources Better Than XM-Sirius.” I shall be as bold as mentioning them right here: MySpace, KCRW.com, iTunes, Indie1031.com, YouTube, and StreamingRadioGuide. KCRW in particular must be something else as it gets two “Best of all” mentions by Scott Goldberg. I would put Rhapsody and similar services ahead of at least some of those six, but the major issue at hand is that satellite radio, like terrestrial radio, is mostly aimed at people sitting in automobiles. Internet delivered audio programming is not yet competitve in that market space.
Perhaps XM and Sirius could have reached a wider audience than they have had they worked harder at making satellite radio something for the entire family, they way it is for the Drells mentioned above, similar to how cell phone carriers have created calling plans for families, instead of merely gunning for whoever happens to be sitting in the car or SUV at the moment. Had they done so satellite radio could have won a lot more fans among now iPod addicted teens. On the other hand, Walkman devices became far more popular than handheld radio devices because they allowed for more choice and listener-controlled programming.
February 23rd, 2007 at 12:15 pm
The FCC does not review monopolies and/or competition aspects. That is the job of the DOJ. The FCC’s task is to asses impact on consumers and will therefore hear the opinions of consumers and consumer groups in reaching a decision. It’s important to understand this difference before attempting to assess the outcome of the fed reviews for this merger.