Here are links to some of the past weekend’s stories on the XM - Sirius satellite radio merger. For the record, I’m shifting from mildly positive towards the merger to decidely sceptical. I don’t see why two failed management teams should be allowed to take the path of least resistance and blatantly monopolize a market. The comment section below is for you to tell me what retarded ass-clown I am for not understanding how the future of all things good is riding on the speedy completion of this merger. Hey, I can still be convinced about the errors of my way.

Aviation Week examines the technical challenges of merging XM’s and Sirius’s signal.

Erika D. Smith at The Indianpolis Star has a somewhat odd take on the merger:

NAB’s executive vice president, Dennis Wharton, says a reversal would reward the satellite radio companies with “a monopoly platform.”

I say hogwash.

I agree with Sirius and XM. They operate in a market that’s much bigger than just satellite radio. Sure, they compete with each other, but also with broadcast radio stations, Internet radio stations, iPods and online music services, such as iTunes. Even WiMax, the wireless Internet technology that blankets entire cities, will be a rival when it becomes as easy to stream music in a moving car as it is sitting at home.

If all those wonderful things are going to happen, and they probably are, why not wait for them to become reality before we allow XM and Sirius to monopolize a sliver of the public spectrum?

Carl Howe at Seeking Alpha wites the “merger is like two sinking ships colliding“:

…the fact that executives mustered such a weak case illustrates a more significant issue: satellite radio is a lousy business. Satellite radio has immense fixed costs that never go away and requires huge marketing expenditures to capture subscribers. Regulatory issues are huge, yet the subscriber revenue stream is weak at best. The two companies came to the joint realization that the only business model that could work ever make them profitable in finite time would be to gain monopoly pricing power, just as the cable TV industry did. That’s why these companies want to merge: they need less direct competition and more revenue.

That’s what more or less every business strives for.

The Wall Street Journal’s Sarah McBride has a good summary of the merger and the challenges it’s facing.

Canadian XM-subscriber Maurizio chimes in with thoughts on the satellite radio companies and their proposed 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.

The Wharton School (University of Pennsylvania’s business school and widely regarded as one of the very best in the country) has an online magazine called Knowledge@Wharton. Yesterday the magazine interviewed Gerald Faulhaber - Professor of Business and Public Policy, Management, and Law, and formerly Chief Economist at the Federal Communications Commission - about the proposed merger between XM and Sirius. Below are some snippets from the full interview.

Knowledge@Wharton: Gerry, given that you were once the chief economist for The Federal Communications Commission, what do you think the chances are that the FCC will approve this merger?

Faulhaber: Well, I would not be amiss in saying that the FCC is certainly a political organization. When these radio licenses were granted to these two companies, back during the Michael Powell days, I would have said that the chance of their being able to do this merger was nil. Now, with Kevin Martin in charge, who’s certainly a political animal and I don’t think he would deny that, I think that it’s not nil. It’s something. I don’t think it’s big, but it’s not zero.

Knowledge@Wharton: The FCC, four years ago, rejected the merger of Satellite TV broadcasters EchoStar and Direct TV. How is this different?

Faulhaber: I don’t think that it is different at all. In both cases, EchoStar and Direct TV were both fairly marginal financially and they made the argument, which potentially could have been compelling and wasn’t, that “Gee, as a single satellite company we can more effectively challenge the cable companies.” That was, in my view, a bogus argument.

It was turned down at the FCC and turned down by the Justice Department as well, and I think events have shown that that was a good decision. Like Sirius and XM, they were both in some financial difficulties and they used this as an argument to say, “We’re not financially strong enough to challenge the cable companies.” I don’t think that they were right then, I don’t think that they’re right now. I think that they are very similar. It’s a duopoly looking to merge into a monopoly. That’s where we are on this.

…

I think that I would be against [the merger] for the same reason I was against the DirecTV and EchoStar merger. It’s a merger to monopoly that can’t be good for consumers. It’s on the basis of, “well we’re not really making money.” Well, yes, but you haven’t been in the market that long.

On Nielsen Media Research’s blog Follow The Video, Larry Gerbrandt, the Senior Vice President and General Manager of Nielsen Analytics, looks at how the XM-Sirius takeover/merger compares to a potential merger between satellite television providers DirecTV and Dish Network. While the satradio companies are now looking for FCC approval, the two sattv companies have already had merger overtures slapped down by the federal bureaucracy.

Among the similarities are, according to Gerbrandt:

* Both operate in the direct-to-consumer space using satellite spectrum

* Both were launched to provide competitive alternatives to consumers and to challenge perceived monopolies in their respective sectors (radio broadcasting and cable television)

* Both are now facing a lot more competition than when they launched (satellite radio must now compete with portable media players and HD radio; direct satellite faces quad-playing cable operators and telcos)

* Both are in maturing markets

* Both face high programming costs, the result, in part of intramural competition for scarce hits

If you remember the dotcom era you may recall the buzz phrase “first mover advantage,” the idea that the company that was first to enter a market had an outsized chance to dominate it. Whether the theory is correct, and plenty of people think it isn’t, it certainly influenced what and how venture capitalists invested in the late 1990’s. Gerbrandt sees a smiliar mechanism at play in the satradio and sattv market space:

If there is a strategic lesson to be gleaned from this merger is that in a digital age, entertainment delivery technology is moving at an accelerated pace, with narrowing windows of opportunity to become widely adopted before a newer and shinier platform shows up.

I’m not convinced that satradio is hurt as much by a newer and shinier technology (like iPods) as by reckless spending and, perhaps, an outright over estimation of the market demand to begin with. Perhaps a stronger lesson is this:

A new technology must offer affordable equipment and usage (subscription fee in the case of satradio) to win economies of scale, from which profits can be attained through premium-priced upsale offerings. Both XM and Sirius have gone the other way: Expensive equipment, somewhat high-ish subscription fees and no upsale opportunities.

Are XM Satellite Radio and Sirius Satellite Radio merging, as they claim, or is Sirius acquiring XM, as many newsreports claim? Reuters “mergers and acquisitions reporter” Michael Flaherty tries to explain what’s causing the confusion. It’s complicated enough to have made different analysts reach different conclusions and Sirius and XM have contributed to the confusion by not disclosing the proposed share count resulting from the deal (ie. how many share XM stockholders end up with vis-a-vis how many share Sirius stock holders end up with).

Flaherty is of the opinion that Sirius is buying XM and will hold 52% of the shares of the combined entity.

Charles Warner, “Media Curmudgeon,” sees the merger as a desperation play and he doesn’t think satellite radio has much of a future, regardless of whether the FCC aproves of the deal or not. Like many of the bloggers we linked to yesterday, Warner believes that both broadcast and satellite radio are being hammered by iPods and other forms of individualized audio programming.

Casey Lartigue, “a monthly guest and an occasional host on XM 169″ is “happy about the deal,” as it will bring high-value programming, such as the NFL, under one umbrella. He thinks his station (XM 169) will survive, as “it is the only national black talk station.” Lartigue also addresses the idea that satellite radio is or should be commercial free:

A big misunderstanding that many people have about satellite radio is about it being commercial free. Yes, the music is commercial free. The talk and news channels are not commercial free. So people who want commercial free music can still get it. But with the news and talk stations? Think about it. You still need commercials because the hosts don’t wear NASA diapers. They still need to take breaks–and during those breaks, if you don’t hear commercials, then you get to hear the same promos for different shows on the station.

Howard Bloom takes an in-depth looks at the role of sports programming and its financial impact on XM and Sirius. It’s an eminently readable post and I use the following paragraph merely to whet your appetite:

Its great to offer an NFL, MLB, NBA, NASCAR and NHL channels, but if you turn on your car radio, access ESPN, FSR or Sporting News Radio on your computer you’ll be able to listen to all the NFL, MLB, NBA, NASCAR and NHL talk you’ll ever care to listen to and it won’t cost you a dime. It remains to be seen when XM and Sirius merge in the coming months if they’ll keep the league centric channels as part of their programming. The costs associated with talk radio programming are much higher than most can imagine.

Read the whole thing here.

Being a subscriber to both XM and Sirius, Bryan Caplan at EconLog welcomes the deal:

I severely doubt that prices will go up by much (thought perhaps they should - satellite radio has yet to turn a profit), and I’m confident that there will be more selection. And perhaps more importantly, it also boosts my confidence that satellite radio will continue to exist despite the indifference of the iPod generation. (I pre-paid XM for five years, and I get nervous every time I poll my undergrads and find that none of them subscribe).

In my opinion, Caplan’s undergradute students shouldn’t spend $13 a month on satellite radio. They should do whtever they can to avoid credit card debt, and not subscribing to satellite radio is a good way to do that. Once they gradute and get measly-paid jobs they should get it.

I think Caplan is right that subscription fees won’t go up all that much because so few people have satellite radio and very few, I imagine, view it as anywhere near as must have as cable TV, market where consumers are positively gouged by providers. I don’t satellite radio will ever be in that position unless they’re able to develop some killer content or, even better, services.

Tony at Rolling Doughnut is a Sirius shareholder, a Sirius subscriber, and a Howard Stern fan. He thinks the merger/takeover “is ultimately the right deal.” He sees short-term downside on the revenue side:

As for potential subscribers, what incentive will they have to sign up now? The rational decision is obviously to wait this out until the executives offer answers. That will hurt both companies financially…

I guess that depends on the share of subscribers XM and Sirius acquire through car sales. I don’t think the anticipated merger will hurt those sales, unless, as Business Week speculates, the auto makers decide to hold off “until it’s clear which company’s model of radio receiver prevails—or until a hybrid is developed.”

XM subscriber Lilsurfergirl had one immediate thought when she learned about the merger:

My initial thought in hearing about this merger today is cost. It is hard for me to think the potential merger of XM and Sirius was created to lower subscription fees. Increase shareholder value, for sure, but Jane on the street should look for a price increase….I can already envision the promo copy…”Now, with 500 channels and your favorite shows in one location”…all for $15.95…Most satellite radio subscribers don’t consider $12.95 per month to be that painful, but the closer you get to the $20 bill benchmark the more people reevaluate the expense.

XM subscriber youbdraug is giving the merged venture a short leash:

If the price goes up, or I have to buy a new receiver (I think I will), I’ll probably cancel my subscription.

XM’s FAQ page on the merger says flatly that current XM subscribers will not have to buy a new receiver. Not that I would take that statement to the grave.

Scott Long, who listens to both XM and Sirius, provides a breakdown of the two companies’ programming. He likes both but gives the edge to Sirius, unless you need the baseball package on XM.

Consumer Reports is weighing with a blog post on the merger and its potential consequences for subscribers. Among the recommendations are:

Ask the seller — equipment is sold by the providers themselves as well as by automakers and electronics retailers — what protection you have in the event that the merger renders your equipment obsolete. Ask for any assurances in writing before you buy.

That is sound advice, although I doubt Sirius - XM will open itself up to massive class-action lawsuits by dumping much of the cost for new or upgraded receivers on the laps of current customers.

Eric at Pardon My French thinks the FCC should

realize is that when you buy a new car it comes equipped with AM (free), FM (free), CD player (free), Tape player (free but who cares), and Satellite Radio (costs good money per month).

Looks to me like there is plenty of competition right?

Eric mentions that a lot of car buyers let the satellite radio subscription that comes with the new car expire once the promotional period is over. Unless the merged XM-Sirius comes up with a super-easy fix the already installed but now inactive receivers will become entirely worthless, at least the portion of receivers that aren’t compatible with the winning signal (XM’s or Sirius’s), so to speak.

Duffy at Pencader Days is a Sirius subscriber who also gets XM through his DirecTV service.

Sirius has much much better sound quality. XM stretches their bandwidth so tight the music is tinny and hollow. Sirius is much richer…

Content is really the big difference here. Clearly the music channels will be consolidated. There’s no need for two of the same channels with slightly different programming modulation. The talk channels and sports programming will be the big fight.

Duffy recommends whacking Martha Stewart and wonders how major Sirius shareholder Howard Stern will take to competitors Opie and Anthony who hold court at XM. He rounds off with six good questions about the effects of the merger.

XM-subscriber Frank Ahrens at WashingtonPost.com fears that the merger will mean less of the programming he wants and more of the stuff he doesn’t want (eg. Howard Stern, NFL, Martha Stewart). The post’s comment section reveals another hurdle for the combined entity to overcome: The strong distaste many of the subscribers have for the company they don’t subscribe to. It’s rather common, it seems to me, for Sirius subscribers to regard their satellite’s programming as superior to XM’s, while many XM subscribers think of Sirius as trash.

The commenters also point out that some receivers have the recording capability that Ahrens want.

One wonders why Sirius wants to buy XM, which has nothing if one is to believe Sirius.

Here’s a link to a PDF-document with the presentation delivered at the Tuesday morning press conference. One of the selling points for the merger is “Merged company is more attractive to large national advertisers that have a significant number of media alternatives.” Yeah, don’t expect much commercial-free content, not even on the music stations, after the merger.

Mike at The Malice Engine tried XM but found $13 a month more than it was worth:

When I bitched, people would say “But you get over a hundred channels!” Yeah? Big deal. I listened to maybe four regularly, and flipped through maybe half a dozen or so more. Tack on country for my wife and we’re still looking at less than 20 channels I give half a crap about.

Instead, Mike went the iPod route. He wishes satellite radio had gone for tiered service plans and less exclusive content. If the FCC approves the merger, I imagine it could strip the combined entity of one of its licenses and give it to a competitor that would have good reasons to go a cheaper route. On the other hand, original content, whether it is exclusive or not, is expensive, and if you all you’re doing is playing music, how are you any better than iPod?

If you did bet on a Sirius/XM merger, you could be a winner!

Yesterday’s announcement that Sirius Satellite Radio and XM Satellite Radio are looking to merge hardly came as a shock after months of speculation that the two struggling companies would do exactly that. Together, the two companies will have almost 14 million subscribers, and they could save bundles of money by not competing against each other for programming deals and subscribers.

Among the headaches facing the merger are technology-migration (the receivers currently aren’t compatible), programming decisions, and, most importantly, FCC approval. My guess is that the merger will be approved, although with a number of conditions set to protect subscribers against fees for equipment changes and subscription-fee hikes.

Hypocrisy alert:

Meanwhile, the National Association of Broadcasters trade association says it’ll use its muscle to fight the proposed merger.

“In the coming weeks, policymakers will have to weigh whether an industry that makes (shock jock) Howard Stern its poster child should be rewarded with a monopoly platform for offensive programming,” NAB Executive Vice President Dennis Wharton said in a statement.

Broadcasters much preferred Howard Stern and his ilk when they were all on terrestrial radio.

As for Stern and, say, Oprah, being on the same “platform” or what have you, well, my cable system carries Christian stations as well as Pay-Per-View porn. I don’t see why one would prohibit the other.

By the way, has Joan Lappin commented on the merger?

Let’s spin the blogs for reactions.

XM subscriber Joe Wikert isn’t overly enthusiastic:

Why do I get the feeling the new company will charge a higher monthly rate, just because I’ll now have the opportunity to listen to Howard Stern? Geez, that’s exactly why I didn’t buy a Sirius device to begin with!!!

Adam Thierer, a self-described satellite radio fanatic and XM subscriber, at The Progress & Freedom Foundation Blog is, however, quite happy about the merger:

…it was always questionable whether the satellite radio sector could sustain two healthy competitors. For two satellite radio operators to thrive in such a fiercely competitive environment they needed to just be focused on one primary target: Terrestrial radio. Even then, it would be tough for two small firms to bust into the market and compete against these old broadcast giants.

Thierer goes on to explain how iPod’s and similar devices helped undercut and stall satellite radio subscriber rolls.

“An uncivil union” is how Junichi at Poplicks describes the merger:

I’m gravely disappointed to hear the news that XM and Sirius are planning to merge.

…

I happen to spend a lot of time listening to both XM and Sirius, since I have Sirius in my car and Dima’s car has XM. I’ve listened to so many hours of multiple channels on both companies that I can easily articulate the differences between the two.

Junichi lists the differences in programming and tone between Sirius and XM and continues:

…the competition between XM and Sirius has forced both to constantly offer more diverse programming, deepen their catalog, cater to specific groups (e.g., there’s a Korean language channel on Sirius!), and, to some extent, play fewer commercials.

Junichi fears that the merger will inevitably turn stellite radio into something almost as bland as commercial broadcast radio.

Owen Thomas at Business 2.0 calls XM’s CEO Hugh Panero the odd man out, “left out in the cold” by the merger:

Panero’s strategy was to run XM lean and mean, not overbidding on expensive talent and relying on cheaper auto-industry deals, rather than retail distribution and direct marketing, to boost subscribers.

But Karmazin at Sirius decided not to play Panero’s game, splashing out hundreds of millions of dollars on deals to lock up Howard Stern and sports leagues…

Karmazin’s spend-what-it-takes strategy may prove the smartest. By forcing his rival into a merger, Karmazin could render his spending spree a footnote in the history of the combined company.

Last Thursday, February 16, Sonja Ryst at BusinessWeek.com quoted Robert Peck, analyst with Bear Sterns, as claiming that the merger talks were held up by control issues rather than “regulatory hurdles.”

Mark Ramsey at Hear2.0 lists 14 knee-jerk predcitions, including these two:

4. Post-consolidation, monthly subscription rates will increase by at least $3/month.

5. Price increases will be justified on the basis of consolidated content, and this argument will ring true. Higher price, but greater value. The end result will be less churn than would otherwise be expected since consumers will be quick to acknowledge that the best of both XM and Sirius is better than either alone.

He also predicts that the battle between “local” and “national” radio will heat up considerably:

10. Now that XM/Sirius needs to sell the category exclusively instead of their particular brand within the category, the marketing challenge will shift from XM vs. Sirius to satellite vs. local - or, as I think it will take shape, “national” vs. local. “National” will be the place for the big talent and the music channels “too good for commercials.” “Local” will be positioned as the place for all of radio’s negative baggage. Terrestrial radio will be the enemy, now more than ever.

That wouldn’t be a bad thing at all, in my opinion, if it prompts local stations to beef up their local staffing and programming in response.

Who needs canals when there are railroads? Who needs railroads when there are highways? Who needs satellite radio when there’s wi-fi? Those are the eternal questions that make Steve Poland at TechCrunch doubt that the merger and satellite radio in general matter much:

As wifi starts to heat up (and eventually lace the country), that will open up access to Internet radio stations to broadcast to a much larger audience. The satellite monopoly won’t matter at that point. Right now with Sprint and Verizon Broadband mobile services, if a hardware device existed, you could plug your wireless broadband card into your car stereo and connect to your favorite Internet radio stations and podcasts. Aside from the Howard Stern fans — who will need XM / Sirius at that point?

Jordan Willms at Sumo Labs disagrees:

Why?

The new XM/Sirius needs to look at itself long and hard in the mirror and realize what they do best. Is it providing radio over satellite? I don’t think so: that is only their delivery method.

I think XM/Sirius’s hedgehog concept is this: Quality programming of audio media, and licensing. Through a continued investment in a service similar to XM Radio Online, XM/Sirius can continue to sell quality music and programming regardless of distribution channel. XM Radio Online allows XM radio subscribers to listen ro satellite programming via the Internet. As mobile connection speeds increase, paying subscribers could soon be listening to their XM/Sirius radios via their cellphones, crackberries and PDAs.

Our near-Arctic friends are also impacted by the merger through XM’s and Sirius’s Canadian off-shots. InsidetheCBC reports that XM Canada “loves the idea” while Sirius Canada is more muted in its reaction.

Stephen Oakes at Jutia Group summarizes what the merged Sirius and XM might look like. Among other things, Oakes thinks marketing costs could be cut by $75 million. It’s worth a read if you have any interest in XM and Sirius stock.

XM subscriber Kirk Walsh is surprised - shocked, actually - by the deal and wonders how it can win regulatory approval when the FCC slapped down EchoStar and DirecTV’s merger musings. He does see upside for subscribers, however, if the deal does go through:

I’m excited about the prospect of having both the NFL and MLB on the same radio. I’m not a huge fan of football, but it’s a nice way to pass a Sunday drive back home from one of our families when baseball is out of season. I couldn’t care less about getting Stern and I’d imagine some of the music channels would get whacked (please not Lucy or Fungus) but overall I think it’s good for the customers of the services.

Unless prices get pushed up because of the lack of competition. I wouldn’t be at all surprised to find a rate freeze being negotiated to get the deal done.

It’s hard to imagine that FCC won’t finagle rate concessions as part of an approval agreement.

For some people, the stakes are a bit higher than programing and subscription fees. Such is the case for epiac1216 who lives in Panama:

I work for a call center in Panama that provides customer service to XM Satellite Radio’s customers, so this news will certainly affect our call center in Panama. If Sirius purchased XM, then it means that there will be many changes in the future. I hope I will not lose my job because of this. They say that when elephants fight, the only one that gets hurt is the grass underneath.

I have a friend who works for XM here in America and I imagine he’s also wondering about his job security. Then again, considering how both satellite radio companies were doing, he was probably wondering about it before the merger, too.

Orochi Serge massively likes the merger:

You can’t really call it a monopoly considering if they are still competing with FM/AM. I can’t wait though, I get to have Nascar back, the NFL, and Howard Stern. Not to mention I get new metal channels and keep BPM and the System.

If there is a chance there will be a rate hike? Hell I’d deal with it, I’m so sick of FM/AM I don’t care how much I’d pay for satillite radio.

Most mergers fail because the so-called synergy that executives often chase but rarely find just isn’t there. George Gutowski as Seeking Alpha sees one good thing about the proposed merger:

It eliminates management excuses about competition and scale. Combined you have approximately 14 million paying customers.

Watch for big write downs of impaired assets in the very immediate future. Then we need profits and positive cash flow almost immediately if not sooner, because the market is done waiting for this one.

He’s not bullish on the satellite radio stocks.

David Fischer has links and thoughts on the anti-trust regulatory aspects on the merger.

OrbitCast live blogged the XM/Sirius conference call this morning. Read it, but keep in mind it’s a live blog, not a transcript.

Felix Salmon sees the merger as a case of a monopoly benefitting the consumer:

The deal reminds me of the Sky-BSB merger in the UK in 1990. (I’m showing my age here.) And like that merger, it makes sense both financially and at a common-sense level. Competition between the two companies does not keep the price of a subscription down – rather, both charge $12.95 per month, which is pretty much the maximum that Americans will pay for radio. A merged company would (presumably) have much more programming for the same price, which is a good thing for consumers.

I’d argue that the reason this would-be monopoly will benefit the consumer is that it is not a monopoly at all, but rather a complementary to broadcast radio, iPods, web radio and so on. Had it been a true monopoly - for example, had it been the only distribution channel for all or most local radio stations - it would have been a disaster.

Marc Fisher at WashintonPost.com describes some of the issues the new company will face, such as what it should call itself (”XM is one of the best new brand names to come along in many years”), where it should be headquartered (”Sirius will likely argue that the talent is based in New York and the deejays and musical artists ought to be there”), and what will happen to the deejays who likely will become superfluous. You’ll find some interesting reader comments as well.

Rob Beschizza lists 10 things you might not know about the merger, of which maybe five or six are things you might actually care about, for example this tidbit:

It’s being touted as a “merger of equals,” but in fact, Sirius is buying XM for nearly $4.6 billion in stock. (Source:Bloomberg)

Matthew Yglesias sides with those who don’t see a major anti-trust issue:

After all, at the moment I — like most Americans — don’t have a satellite radio subscription even though I’m pretty gadget inclined. The logic of the business is that the merged entity needs to grow, which is to say continue trying to offer a deal that people find appealing compared to our many other entertainment options, not our satellite radio options.

Jon Friedman of MarketWatch.com has the oddest reaction of the day. He appears to have missed out entirely on the year usually known as 2006:

Once again, we all made the mistake of believing the hype. Remember when satellite radio was all the rage? You know: a long time ago. Yep. Last year.
It looks like the satellite-radio business isn’t all it was cracked up to be.

That’s right, Todd, and that’s why the merger rumors were flying last year, although they actually started in at least 2005.

Life in Seattle draws parallels to the “merger” between Sprint and Nextel (”look at what a disaster that turned out to be”). He predicts a disaster. I wouldn’t rule it out, though more likely than a disatser would be that the new service either becomes XM with some Sirius add-ons or Sirius with some XM add-ons, prompting many of the losing company’s subscribers to allow their subscriptions to expire.

We’ll add more links as the day progresses. Feel free to fire away in the comment section.

Everybody knows about Sirius Satellite Radio, but less known is SiriusBusines, which provides retailers and other businesses in the United States (excluding Hawaii and Alaska) with commercial-free music programming. Using SiriusBusiness as in-store music provider offers a number of benefits, including the 65+ channels to choose from and a monthly subscription fee that includes royalty payments to ASCAP, BMI and SESAC, industry organizations that represent composers, songwriters, and publishers that hold the rights to the songs played. Currently the monthly fee is $24.95.

SiriusBusiness isn’t limited to playing music in stores and restaurants, business can also use it for “on hold” messaging.

Among the businesses using SiriusBusiness are Wendy’s, Yum Brands (which includes Pizza Hut, Taco Bell, KFC and other restaurant chains), and Big Boy Restaurants. The company added Noble Roman’s just last Friday.

Just as a follow up to this post, Sirius’s stock is now trading at $3.55 a share.

New York Post is reporting that shock-jock and Sirius Satellite Radio mega-star Howard Stern may return to free broadcast radio. The theory is that Stern has failed to bring much of his audience to Sirius and his fame and celebrity are quickly fading away. The Post claims that his “celebrity-guest bookings have all but dried up.”

Eric Savitz at Barron’s Online notes that Bryan Kraft of Credit Suisse has rated XM Satellite Radio as better than neutral. According to Savitz, Kraft believes a long-rumored merger of Sirius and XM would create a net-present-value of $12bn.

Another recent, upbeat look at Sirius and XM.